FSBO worked very, very well and saved us a great deal of money. We feel that this method was easy for us. We sold our home in 10 days from the time we listed. We had great exposure and loads of calls and many people thru in the 2 weekends that we showed the house.
There are many reasons why buying a home directly from the owner makes good sense. We've listed them below...
A BETTER DEAL: A house is only worth what it is worth regardless of whether a real estate agent is involved or not. So, a home that is worth $100,000 that is offered by the homeowner is still worth $100,000 if it is offered by an agent. The difference is that a FSBO has that additional 6-7% negotiation room. For example: If a homeowner sells that $100,000 home for $98,000, they have made more money than if they had to pay a real estate agent $6,000 or $7,000 in a commission. AND, the buyer has saved $2,000... instant equity!
NO COMMISSIONS: It has been said that the buyer does not pay the real estate commission. Well... using the previous example, who really paid the commission? Both the buyer and seller did. The buyer in the form of a higher sales price, and the seller in the form of a reduced equity check.
GET WHAT YOU WANT: You know what you want better than anyone else. And, you can see whatever you want when you want. Some agents show homes by whether or not it is listed with their company, not by whether the home suits the buyer's requirements. And, before you know it, you may be looking at homes that are more than what you want.
CUT OUT THE MIDDLEMAN: You're dealing with the source. The seller knows their house better than any real estate agent could. They can answer your questions about schools, shopping, and how much their utility bills are. They can tell you that the neighborhood has get-togethers and cook-outs, who the neighborhood baby sitter is, etc. AND, they don't have to call another agent who calls the seller, then calls the agent back, who then calls you.
IT'S EASY! Follow the "Buyer Tips" below and "go for it"! It's a win-win situation all around!
Buying a home can be a daunting task. The following are a few ideas from professionals in the real estate industry designed to make the process an enjoyable and rewarding one:
Take stock of your situation and make sure that you are ready to buy a house, whether it is your first or not. Look at how long you will be in the area, at your job, family size, tax benefits, etc. Be sure it makes sense to buy now!
Have a realistic idea of how much you can afford before you start looking. Get a FREE pre-qualification letter from a mortgage professional or online company. Not only will this save time, but will also avoid disappointment on everyone's part. These days, most offers to purchase include a pre-qualification letter.
Discuss what your particular needs are with your family or partner before you start to look at properties. List your "must have" features and your other "nice to have, but not absolutely necessary" features. After viewing a few properties, re-evaluate your criteria. Needs will change over time. Be sure to include neighborhood criteria. Those are much harder to change than a few coats of paint.
Be cautious of signing an agreement with an agent! Most will state that you are obligated to pay a commission no matter how you find the home. Instead, tell them that a commission will be paid only if you buy a property shown to you by that agent. This enables you to look with other agents, and at For Sale By Owner properties, at your own convenience.
Don't bring an agent with you to look at FSBO properties, or bring them into the picture when it's time to draw up a contract, unless you are willing to pay their commission through either a higher sales price, or out of your own pocket. Otherwise, you may risk losing the house.
If you find the house you want to buy before you have sold your home, and the seller is reluctant to sign a contract with you with the contingency that you sell your home first, use the Contingent Sale Addendum as a part of your contact. This allows the seller to continue marketing and advertising their property yet gives you the "first right of refusal" should they receive another offer. This way you will be notified immediately if the seller has another offer, giving you an opportunity to re-offer if necessary.
If you sell your house before finding another home you want to buy, be sure your sales contract is contingent upon you, the seller, finding suitable housing! We have heard stories of people frantic to find a home, and even having to rent after the closing, because they sold their home first, before buying another. Remember, the seller is legally bound to sell once the contract is signed.
Most states require that the seller (not the real estate agent) complete and sign a Property Disclosure Form, stating the condition of all aspects of the property, before you make an offer. If the seller does not have one, tell them you must see one before you make an offer. The forms are easily obtained from the state's commission on real estate or the local For Sale By Owner office.
When presenting an offer, be courteous and respectful of the sellers. Make sure that everything you want in the contract is written down in the contract. Also be prepared for a counter offer, don't let it scare you! In most cases, it is seldom that an offer is accepted as it is first submitted.
In all cases, make your offer contingent upon the property appraising for the selling price or higher. This will protect you even if you feel you have agreed to a higher price than you at first wanted to.
Request a final walk-through of the house a few days before closing and after the furniture is removed to make sure that there are no faults that were covered by the sellers' personal belongings. It is much easier to request compensation and/or necessary repairs before the house is closed than afterwards.
Make your offer contingent upon the property passing a professional home inspection. Be realistic when requesting repairs. This is also an excellent way to become more familiar with the upkeep needs of your future home.