The typical way for people to find homes to buy is to hire a real estate agent and look through the Multiple Listing Service or MLS for homes for sale in the area.
However, most real estate agents do not list FSBO homes or for sale by owner homes. This greatly limits your ability to find all the possible homes for sale in an area. If you are interested FSBO homes, though, there are ways you can go about finding them:
- Look around the neighborhoods you are interested in to see if there are any FSBO signs.
- Check your local newspaper in the real estate section to see if there are any advertisements for FSBO homes.
- Check dedicated FSBO web sites on the Internet that list these homes.
- Hire a real estate broker who works for you and is not limited to seller commissions.
There are several advantages to buying FSBO homes:
- Since commissions are not getting paid to a real estate agent, you can often take advantage of this buy obtaining a home at a lower rate than you normally would. The amount of money the seller is saving on commissions is often passed on to the buyer.
- You can often get the entire transaction for the purchase of a home completed a lot quicker without having to go through agents. As long as you know what you are doing, you can work out all the details and negotiations between the buyer and seller directly without having to wait on other parties.
- Sellers who are not real estate savvy may price their homes cheaper than market value. Additionally, sellers without real estate experience may not have exposure to marketing tools that professionals use causing the home to be on the market a lot longer. This can make the seller become highly motivated to sell and may bring the price down further.
There are some risks to buying FSBO homes, though. You should be aware of what those risks are:
- Sometimes the price for a FSBO home can actually be higher than market value. This is because the seller is invested in the property, both financially and emotionally, and may overstate its worth.
- The seller may not fully disclose everything that is required to in a home and you may be stuck without recourse once the sale is final.
- You will have to perform due diligence yourself regarding all the proper paperwork on the home. This will include ensuring there is a clear title.
- If neither the buyer nor the seller has real estate experience the process of dealing with all the paperwork and legal requirements may be time consuming and stressful.
Buying a FSBO home can be very advantageous but you do need to know what to expect before getting into the process. As with most homes, it is advisable to get pre approved for financing so you know how to negotiate and how far you can raise your offer if you need to. It is also recommended to make sure you do research in the area to get an idea of what comparable homes are selling for.
By Kathleen Dougherty, Freelance Writer. http://kathleendougherty.com
