Need To Know About For Sale By Owner Properties
Lack of inventory causing you to look at "For Sale By Owner?"(FSBO)
Here is what you should know before buying a FSBO!!
There are sellers that choose to sell a home themselves. They have this right. Some feel that Realtor's do nothing to sell their home so why spend all that money. Some can't afford to hire a Realtor. Some just have no interest in working with a Realtor. Now there are two types of FSBO. 1. FSBO that post on MLS and pay a Realtor comission 2. FSBO that does not post on MLS and will not pay a Realtor Commission. In the event the home you want falls under FSBO #2, you should plan on paying your buyers agent commission out of your own pocket. In fact, in FSBO #1 this may still be the case as most the times your agent has to do double the work to assist with the sellers.
Here are a couple items to remember when you're looking to work with an FSBO.
1. A lot of FSBO homes are priced above market value. Most sellers feel that their home is worth more than it really is. Without a Realtor to guide them and suggest a price, they have to utilize online references. This can cause sellers to get a false sense of market and value! This isn't always the case, but I see it more than not.
2. FSBO sellers do not owe any fiduciary duties to you, me, or anyone. This means they do not have to fill out property disclosures. They do not have to disclose issues or changes with their home. Again, some do, but there are some that do not! It has been a personal experience of mine where I had a seller inform me of an issue, tell me not to tell anyone about that issue. When I refused, they stated I am not the agent for them. They listed FSBO! Nowhere did I see disclosure of the issue they informed me of!
3. FSBO, most the time, do not have a showing service. The showings are set up through the owner themselves. This can make it hard to see these homes. On top of that, the sellers will most likely be at the house during the showing.
4. Earnest money must be held in a non-interest bearing trust account of the selling broker. If there is no selling broker than you are handing your EM over to a seller. What happens if you want to cancel the deal and retain your earnest money, but the seller doesn't want to give it back? Or the seller spent it? OR seller disappears?
There are several more things to know about for sale by owner homes. Again, they are not all bad and some actually go quite well, but when the bad outweighs the good, I feel there are better options and safer options for buyer!
**Please note that not ALL FSBO's are bad. In fact there are so very good FSBO properties out there. My post is based on the majority in my past FSBO experiences.