When a house is for sale by owner (FSBO), it means the homeowner is selling the house without the help of a real estate agent. The most common reason someone would opt to sell their home on their own is because they want to save money on Realtor fees. By selling the home without an agent, they don’t have to pay an agent’s commission.
Buying a FSBO home has both advantages and disadvantages, but knowing more about the process can help you decide if it’s the right option for you. Whether you are looking specifically for a FSBO home or you simply fell in love with a home that happens to be for sale by owner, follow these guidelines when buying a FSBO property.
Buying a house for sale by owner
Buying a FSBO house requires knowledge of the homebuying process and attention to detail. A home for sale by its owner may allow for more room in price negotiation. In 2020, the typical FSBO sold for $260,000, compared to $318,000 for sales assisted by an agent, according to the National Association of Realtors.
While the seller may be responsible for Realtor fees, the fees are usually factored into the sale price of the home. Real estate agents typically earn a 5 to 6 percent commission based on the home’s final sale price — that amount is split evenly between the seller’s agent and the buyer’s agent. For a $250,000 sale, 6 percent is $15,000. But, with only a buyer’s agent involved, the commission fee would be half of that: 3 percent, or $7,500.
But purchasing a FSBO home also comes with some risks that buyers wouldn’t face when purchasing a traditional listing. When a seller uses an agent, that agent helps get the listing ready for sale. This includes crucial steps like setting a list price based on research and local market knowledge, completing all necessary paperwork and disclosure forms and crafting an accurate listing. An owner who sells without this professional help may miss some steps. With a FSBO home, the buyer must be vigilant to make sure all of these things are completed properly and legally.
Can you buy a FSBO home without a buyer’s agent?
A FSBO home doesn’t have a listing agent involved in the process, but you may be wondering if you need an agent of your own to buy it. Buyers are not required to use a real estate agent, but it is a good idea. With no agents involved on either end of the transaction, it would be very easy for steps to get missed in the process.
A buyer’s agent is there to help protect your best interests. “It’…….