3.5 min read
What are the Pros and Cons of buying an FSBO home?
Are you in the market for a new house and find yourself interested in buying a for sale by owner (FSBO) home? Before you proceed any further, you will want to know the ins and outs of how this will all work; specifically, what are the pros and cons you can expect from making this purchase?
First, to be clear, an FSBO home is a home that owners choose to sell by themselves without using a seller's agent. While some choose to stay away from this type of home purchase, there is no reason why this can't work if you know what you are getting into. First, let's take a look at the possible cons you may experience taking this route.
The Cons of buying a FSBO
Buying a FSBO A Higher Price
As with any For Sale By Owner home, the owner is the one who selects the price they believe their house is worth. Sometimes, this can mean that the house is overpriced, and further to that, they may not be willing to negotiate. This is particularly true if they have an owner's bias and can only see their home through rose-colored glasses.
Another possible negative aspect of wanting to buy an FSBO house is that you may have to use an alternative way to cover the commission fee of your buyer's agent. Usually, the cost is covered when the property is sold, but the traditional way doesn't work here since the owner is not using an agent.
Although some owners will agree to pay your agent's commission, others simply will not because they are looking to save as much money as they can. Although this may require some negotiating, there can be ways to include the cost of your agent in your purchase fee, so suggest this if they are unwilling to budge.
Selling "As Is"
Because the seller is trying to save money by going it alone, they may not put in the work for any needed repairs. Often, when a seller's agent is involved, any required repairs must get done before the closing occurs. An FSBO can still get you the house but likely sold to you as is.
The Pros of buying a FSBO
Although realtors do their best to be knowledgeable about the neighborhoods of their listings, they might be missing that personal insight. If, however, an owner has lived in their home for some time, they often acquire a lot of inside information that they can share with you.
A Better Price
Although we noted the price as a con before, sometimes an FSBO home can sell for a better price than if listed by an agent. If the seller wants to make as much money as possible, it might be because they feel desperate and will agree to your lower bid.
Some clients prefer dealing directly with the owner. They feel as though this allows them to plead their case on a more personal level. Perhaps they always wanted to live in the same neighborhood as their parents or they need to live in a home that allows for wheelchair access for their child. They can share this directly with the seller and may be able to persuade them better than through an agent.
The Pros and Cons of buying a FSBO Home Conclusion
Buying an FSBO home can have some challenges, but there are also some positives if you are prepared and do your research. Having a buyer's agent helps and is the best way to go into this situation as they will assist you in determining if this is the right path for you and the purchase of your next home.