You’re bound to run into at least one in your search for your next home: the house that is “for sale by owner” or FSBO (say: FIZZ-bow). Oftentimes sellers who go this route are trying to save money by not hiring a listing agent to help them sell their home. There’s a whole slew of reasons why that’s not a good idea, but that’s a topic for another day. What does buying a home FSBO mean for you, the buyer, and how is the transaction different than one handled by an agent?
First of all, even finding a house that is FSBO can be tough unless you drive by it or someone you know sees the sign out front and passes the news along. Unlike traditional homes for sale, FSBO houses can’t be listed on the MLS, or Multiple Listing Service. This is because only a licensed real estate agent can upload a listing to the MLS. This means less visibility for a house for sale. If you are seeking this kind of ;listing, in hopes of overturning a hidden gem, you’ll have to look harder. Your local classified ads, bulletin boards of community centers, and fliers are all low-tech ways that people use to advertise their home for sale by owner. There are some websites for these types of listings, but they don’t draw the same traffic that the MLS does.
Just because the owner of a FSBO home in which you are interested doesn’t want to deal with an agent doesn’t mean that you shouldn’t as well… quite the opposite. Homes FSBO may be overpriced (due to sellers’ inexperience with getting accurate comps to establish a fair selling price) and are more likely to have shortcomings or pitfalls that a listing agent would help to ferret out before the house went on the market. It’s very important to enlist the help of a knowledgeable agent when considering a FSBO house, and to have a good inspector.
As for paying your agent, which the seller typically does, know that there are a few ways to deal with the situation if there isn’t a listing agent in the picture. You can simply ask the buyer to pay all or half (or some other portion) of your agent’s commission, since all parties will be helped by the agent’s experience and handling of complicated paperwork, etc. Or, if they refuse, you can work with your agent to incorporate their portion into your offer figure, so that you aren’t paying more than you want.
In short, you shouldn’t be daunted by interest in a FSBO home. As long as you have good help and experience on your side, there’s no reason why you shouldn’t enjoy the benefits of finding an undiscovered treasure!
