FSBO properties represent approximately 13% of home sales. And they offer buyers certain advantages over homes represented by real estate agents. For example:
Find Properties at Better Prices
FSBO sellers can offer you a great opportunity to purchase your dream home. That's because they typically have lower asking prices than properties represented by an agency. Real estate agents include their 6% commission in the asking price, and sometimes pad the price even more; the higher the price, the higher their commission. Considering that a 6% commission on a 250,000 house is $15,000, the difference in price between a FSBO and a comparable house sold through an agency can be significant.
Negotiate Directly With the Seller
When you negotiate on a FSBO property, you negotiate directly with the seller. You don't have to worry about an agent describing your offer as "too low" in order to try to bump up their commission. While real estate agents are legally obligated to tell sellers about every offer, they can -- and do -- make their opinion of offers known, and this complicates negotiations. Additionally, when sellers and buyers are able to negotiate without having to figure a commission into the calculations, the process becomes much more straightforward.
Find Motivated Sellers
Who is more motivated to sell a house than the owner? Sure, some agents are motivated and work very hard to sell the properties they list, but an agent showing dozens of houses can't possibly have all the knowledge about a property that the homeowner selling their own house has. The seller is also motivated because the sale has a direct impact on their life. This often means a better price, less prolonged negotiation, and a faster sale process, particularly if you have been preapproved for a mortgage.
Communicate Without an Intermediary
When working through an agent, you must wait for the agent to pass along your questions and other communications and to get back to you with answers. And face it: real estate agents are human, and they may forget to pass along something that is very important to you. If you buy a FSBO property, you talk directly with the seller, saving time and potentially avoiding misunderstandings. Plus, homeowners are often eager to give you plenty of extra information on the house and the neighborhood so you can make good choices.
Remember to Be Prudent
While there are many advantages to buying a FSBO house, you do have to protect your own interests. That often means:
Ordering a home inspection (even if the seller has commissioned one already)
Ensuring that the homeowner discloses details about the house that could affect the sale … and holding them to it
Taking advantage of your right to a final walk-through of the house before closing to make sure everything is in order and any repairs the seller is responsible for have been completed
The bottom line is this: don’t be afraid to look at FSBO properties if you're buying a house. You could be missing out on some great properties if you don't consider them.
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