Is buying FSBO real estate a good choice?
When you’re in the market for real estate, finding the best deal is almost always a top priority. Often, finding a home that is FSBO, or For Sale by Owner, often seems like a good way to score a great price. While this is sometimes true, there are a lot of factors that you need to keep in mind when negotiating on a FSBO home.
Searching for FSBOs
If you are focusing your search on properties that are for sale by owner, expect the available options to be limited. Since most people choose to list their homes with real estate agents to avoid the hassle of selling them themselves, there generally are not many FSBOs to choose from. If you are in a hurry, you would probably be better off dealing with a real estate broker.
While it is easy to locate properties that are listed with real estate agents in various places online, you may need to spend some time driving around and pounding the pavement to find new homes that are for sale by their owners. You will also need to check newspapers and local classifieds.
You Found the Perfect FSBO. Now What?
Negotiating for a FSBO can be tricky. While a real estate agent can provide you with accurate information regarding the costs and values of homes in a particular neighborhood, a home that is for sale by owner could be listed for significantly more - or in some cases, less - than similar homes in the area are worth. The only way to determine a fair value is to spend a significant amount of time researching property values in the area. Don’t forget to figure out things like taxes and the costs of utilities as well.
When you’re working with a broker, you have someone who is experienced in detecting possible issues that could detract from a home’s value. When a home is listed with a real estate agent, that agent sees the material facts about the property. If you are seriously considering buying a home that is FSBO, ask to see a disclosure statement that would let you know about any problems you may be buying. Also, hire your own home inspector to come in and do a thorough inspection.
When you are ready to make an offer, go into it fairly. You might want to hire a real estate broker or attorney to help you make a fair offer and assist you with all the paperwork associated with buying real estate, such as a sales agreement when both parties are able to settle on a price. You may want to have your real estate attorney review the title commitment for the property and address any issues pertaining to the survey or title to the property. Any issues that the home inspection reveals should be taken into consideration in your offer. If you choose to negotiate directly with the homeowner yourself, don’t be intimidated. Remain calm, and don’t let your emotions get involved in the negotiation process. If you are uneasy about negotiating or feel like you will not be able to get a good deal, it is best to hire a real estate broker who will help you every step of the way to ensure that you get the best possible price. Without the help of a professional, it is more likely for a deal to fall apart for closing, so professional legal help is also a good way to increase your chance of being able to successfully land the perfect property you’ve found.
If you’re interested in buying a home that is for sale by owner, and you are unsure of what steps to take, don’t hesitate to call my office to schedule an appointment. I will be more than happy to assist you throughout the process!
Eric L. Nesbitt, Esq.
Law Offices of Eric L. Nesbitt, PC
Nesbitt Law Offices Website