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Top 4 Reasons to Not Buy a "For Sale by Owner"

It can be tempting to navigate toward For Sale By Owner (FSBO) properties when you start shopping for a new home. A FSBO has that neighborhood feel about it without the complication of realtors and big business. The trouble is, dealing directly with a home owner can be far more expensive for both your pocketbook and your schedule. Here are four good reasons to avoid the FSBO and work with a licensed realtor when considering a new property purchase.

1. Undisclosed Problems

 Realtors are required to disclose any problems with the property they are selling. A homeowner who is not a registered realtor is not held to the same standards. While most homeowners are not trying to intentionally cover up problems, you might find yourself with some unexpected and costly repairs to make a year or so after the purchase. When the house is sold by a realtor, you can feel confident that any potential trouble spots are fully disclosed before you have a chance to make your first offer.

2. Overpriced Properties

 FSBO property owners tend to avoid using a realtor so that they will not have to pay a commission. That savings should be passed on to the buyer, but typically the property is not priced competitively based on similar properties in similar neighborhoods. The realtor would be familiar with local markets and set a price that is more reasonable based on the entire market. You might expect a FSBO to be less expensive, but in the end most FSBO sales are priced much higher than they should be priced.

3. Complicated Negotiations

Purchasing a property involves many opportunities for negotiation. The initial cost of the property can be negotiated, the down payment, any changes that are necessary after an appraisal, and anything else that comes up during the purchasing process that might need to be discussed. A homeowner who is selling a property on their own time might not be available to meet during business hours, or they might be unaware of specific paperwork deadlines. Selling a home is a complicated business that simply goes much more smoothly when the process is done by a professional with more experience who is prepared for things that could typically go wrong.

4. Potential Problems With Moving Dates

 There are many reasons people choose to sell a home on their own rather than use a realtor. One reason may be that they have no need to sell the property quickly. In some cases, purchasers have had difficulty moving into the property on time because the previous owner is not in any hurry to vacate by a specific date. Owners use a realtor when they know they need to sell the home within a certain time frame, usually because they need to move to a new location by a certain time. Without that sense of urgency, you never know what to expect from the seller when the deal is done.