Pros and Cons of Buying a “For Sale By Owner” Home

 Posted on September 30, 2022 in Real Estate

The current real estate market is making it harder to find the perfect new home than most people are expecting. Let’s assume, however, that you found the right house, and you are ready to make an offer, but your real estate agent tells you that the home is an FSBO. You might recognize that abbreviation to mean “for sale by owner,” but do you understand the effects that a sale by the owner can have on your homebuying experience? Selling an FSBO property can be tricky, but so can buying one. Here are a few things you should know ahead of time.

Advantages of Buying an FSBO Home

A “for sale by owner” (FSBO) home is sold by the homeowner with no help from a broker or listing agent. This reduces the commission fees for the seller, thereby allowing them to pocket a larger percentage of the sale price. As a buyer, you will still be able to secure a commission for your agent, but there are a few advantages that buying an FSBO property offers you, including:

• Direct communication with the seller – Since the seller is not using a broker or agent, there will be no intermediary in your conversations with the owner. In some cases, this means that negotiations may be easier, and you could end up with a lower price than if the seller had an agent.

• More information about the property – Another benefit of direct communication is that you can get information about the house directly from the person who knows the home the best: the current owner. Agents often have more limited information, especially when it comes to quirky details about the home, personal relationships with neighbors, and neighborhood news.  

Potential Drawbacks

There are some possible disadvantages to pursuing an FSBO home that could make the process harder and more complicated for you as the buyer, including:

• Overestimating the home’s value – The average homeowner is not well-versed in the details of the housing market, which could mean your seller might have an inflated sense of what the home is worth, even if the appraisal does not agree. A seller who decides to stand their ground could lead to you paying more for the home than you wanted to pay.

• Uncertain disclosures – The law requires sellers to disclose any problems with the home that they know about during the sale. Known issues, such as roof damage or mold, for example, must be disclosed and acknowledged prior to closing. Sadly, some owners are not as honest as they should be, and others are not fully aware of the law’s disclosure requirements, which means you might not find out about problems until after you have signed all the paperwork.

Contact a Libertyville Real Estate Attorney

These are just a few of the possible pros and cons of buying an FSBO home, and there are many others that could affect your home buying experience. To learn more or to talk about an FSBO that you have your eye on, contact an experienced Lake County residential real estate lawyer at Newland & Newland, LLP. Call 847-549-0000 to discuss your situation in a free consultation with a member of our team today.

Sources:

https://www.rocketmortgage.com/learn/buying-house-for-sale-by-owner

https://www.bankrate.com/real-estate/buying-house-for-sale-by-owner/