You may have seen the signs “FSBO” in the front yards of homes, or viewed the FSBO website, if you have been looking for a house to buy. You may be wondering if these properties ( for sale by owner) FSBO would be the right investment for you. From a buyer’s standpoint, purchasing a FSBO house can be advantageous. You might be able to get a FSBO home for a lower price than buying one through a realtor. However, if you are seriously considering buying a FSBO property, you should proceed with caution, and keep the following advice in mind.
Our experience in buying our home from a FSBO listing has not been the best, even though we had a great real estate agent working for us. He did not think much of the FSBO market, did not have any good past experience with it and did not offer to show us any FSBO listings. The one we decided to investigate is one we found ourselves. I would not exactly recommend trying to purchase a house listed as a FSBO property unless you just happen to really love the house, or the market in the area you want is tight.
1. Choose a buyer’s agent that you can trust. An agent should act in your best interest. The agent will help negotiate the best purchase price for the FSBO property. You will probably be required to sign an agreement with the agent to work exclusively with you. An agent has the experience and skills needed to assess the value of the FSBO property. The agent acts as a buffer between you and the owner selling the FSBO home and should be able to obtain the vital disclosure information from the FSBO owner. An agent will arrange the necessary paperwork and inspections.
2. Tour the FSBO home several times and do your own research on property values in the area and the neighborhood. Several visits will allow you to notice the good, bad and ugly about the FSBO property.
3. Get an inspection, or two. Using your agent, you have the right and should insist on hiring your own professional to inspect the FSBO property. This inspection of the FSBO property will, most likely, be paid for by you, but will be worth every penny. An inspection will most likely be necessary anyway for financing and insurance purposes. A thorough inspection, not just a pest control inspection, should provide all the details of the FSBO property and a list of repairs and improvements that should be made before closing.
4. Almost all states require a home seller, even FSBO owners, to fill out a disclosure statement. A disclosure statement will tell you if there have been any serious problems with the property, any issues that need to be fixed, and any potential problems. This only works as good as the honesty of the FSBO owner. Some people go through the FSBO method to get around disclosure issues. They are fully aware that even if a problem is discovered, the chance that the buyer will pursue any legal action to hold the FSBO owner responsible is slim.
5. As such, make any sale agreement with a FSBO owner in writing with a contingency on an agreeable report from the inspector you have hired. If there are required repairs, have the required fagreed upon in writing before finalizing the paperwork on the house.
6. Request the FSBO owner to purchase a home warranty. A warranty only costs a few hundred dollars and will protect you within the first year of purchase should any major problems, such as electrical, plumbing, heating and cooling, foundation or structural occur with the home.
7. Before the final closing, get all the documents and go over them yourself to make sure nothing has changed, any needed repairs have been made, and any conditions have been met. Do not go forward with the final closing until your written requirements have been met. Make sure you inspect the details for yourself and see that everything is satisfactory.I believe, as with most situations, FSBO home owners choose this method of selling their home to increase their profit. However, unlike that funny television commercial for a particular cell phone, they are not going to have a network of people behind them. This means that you will not have the knowledge, guidance, experience, and support of a network of a licensed real estate company behind you. However, if you know enough about real estate, and you find a trustworthy buyer’s agent, you can possibly spend less money buying a FSBO home.
