FSBO (For Sale By Owner) – What it Means for Home Buyers
Why Are They Not Using an Agent?
Most of the time the reason a home is FSBO is simply because the homeowner wants to save money. When a real estate agent is used, the seller pays the full real estate commission, which is typically 6 percent of the sale price. For a $200,000 home that translates to $12,000 in sales commission. This amount is split between the listing agent and the agent for the home buyer.
How Do You Find FSBO Houses?
The FSBO houses are not as easy to find as homes listed with a real estate agent. Homes listed with an agent are put on the MLS, which stands for Multiple Listing Service. This is an area every real estate agent has access to and can find, so they can easily see homes listed with other agents in order to show them to their potential buyers. Potential buyers can also see the homes listed on the MLS in a stripped down version, such as realtor.com.
In today’s market, most agents also list their clients homes on Zillow and other websites as well. To find a FSBO, you can scan local papers, drive around locations you are hoping to move to, and some homeowners will put their FSBOs on websites as well (although they cannot get their house on the MLS).
In short, you will have to do more legwork to find the FSBO homes.
If You Have an Agent, Can You Use Them to Purchase a FSBO house?
The answer is yes. And this is where a hurdle to purchasing a FSBO comes in.
Normally, as we explained, a home listed with an agent will require the seller to pay the commission of both agents, but if you are purchasing a home that is a FSBO, you will be responsible for paying your agent.
You can always approach the homeowner to see if they will pay the commission to your agent, or even split the cost, but most likely since they chose FSBO to save on commission, the cost will be yours to pay.
What Do I Need to Be Concerned With When Buying a FSBO home?
If you use a real estate agent, it will take a lot of risk out of the situation. Your agent will be able to help make sure you get a fair price and that you understand the buying process. You should also make sure to have a home inspection done by a professional. If you choose not to use an agent yourself, you may want to at least employ a real estate attorney or “transactional agent†to help you with all of the proper paperwork.
The important thing to remember is that while the seller may be looking out for their interests by saving money selling FSBO, you must look out for your interests as well. If the cost of using an agent is too much, you will want to be sure to do your homework and understand the ramifications and consequences. Regardless, if you are interested in buying a FSBO home you need to be properly prepared.