For Sale by Owner (FSBO) homes, as the name suggest are nothing different from the common homes that are on sale and are being sold just like any other seller.
It is very natural that the sellers who are selling a home would like to get most from the sale of the home they are selling. In fact they would like to make every penny worth out of it.
FSBO sellers want to save money by not paying a commission to an agent. They don’t even want to pass the money to those who are buying their homes.
This is so because the sellers have very fewer amounts of money and that is the reason they are least interested in paying the commissions. Also they are not able to give concession on the sale price too. The FSBO seller has more incentive to keep in his pocket, in this type of “seller’s market”.
Normally every seller thinks that their home is special and they are asking the price which is worth of the home or property.
Actual sales prices are not kept in mind by the FSBO sellers. Instead they set the price of their home by looking at the listing prices in the area. In this way negotiations take place.
While approaching a FSBO seller you should comfortably quote a price that is considerably less than the asking price, on a condition, if the housing market is dull in your area. Even a FSBO seller is willing to negotiate in this case!
If you are a buyer you have to do the same exercise as if the house was being sold through a real estate agent:
- You will like to inspect the property yourself and ensure that a professional inspection is done.
- You still need to negotiate a contract and make an offer.
- You will surely like to know whether the asking price of the home was fair and justified.
Some differences that should be kept in mind
There may be many reasons that the sellers are not using a real estate agent. They may be doing so to escape from the difficult dealings. But some sellers quote the prices of their properties that much which is unrealistic.
The sellers may say that they have spent a considerable amount on the repairs in order to bring that property up to the market’s standard.
There are some questions which you need to get answers with a FSBO.
- What is the extent of time for which the home was put for sale?
- Before the seller took this property was it listed with an agent or agents, if so, then for how long?
- What was the reason behind that the home was not sold for the said period? If he is blaming real estate agents then you have to double check the property.
You may search a home either by surfing through FSBO site online and if you found one or two of them that look interesting. If you have found a property through a agent then let your agent initiate contacting the seller. He will contact them and get all the necessary details for you.
The FSBO seller will be interested to work through your agent as well. And your agent will be the person who will handle all paper work for you. He will also ensure that the closing process is hassle free.
If the sale gets closed through to the specific buyer named by the agent then the agent will be paid a small concession or a flat fee (ranging from $500 to $1,500) and this is called “One person listing” arrangement. Flat fees is also practiced , where buyer and seller have found each other independently of an agent but also when one or both parties want a real estate professional to handle some or most of the transaction.
In most of the cases the agent negotiates his or her fees with the seller. If you liked the house and the seller refused to pay off the agent, then you can make an agreement that you will pay the agent yourself. The agent gets obliged for being a buyer’s agent for giving you a good price for the property you liked.