Properties that are For Sale By Owner (or FSBOs, as they’re commonly shortened) can be tricky to navigate. Homeowners that decide against using a real estate agent aren’t all too common. Only around 10% of all home sales end up being FSBOs. How do you know if you’re paying a fair price, or if you’ll actually end up with the house you deemed your dream home? This isn’t to say you should be discouraged from looking into FSBOs, but having the right support system is key to ensuring everything goes smoothly.
Understanding why some homeowners choose to sell their home themselves can provide some insight. Wanting the largest chunk of the pie is arguably at the top of the list. In our area, commission rates run anywhere from 4-6%. Homeowners might also think it will result in a quicker sale, but unless they are certain the buyer they have is trustworthy and ready to buy, the process could drag on for longer than it would have had they listed their home instead.
Using the services a real estate agent can provide you not only saves you time, but potentially money. Ordinarily, when a home is listed for sale by an agent, the agent that brings the buyer is paid their commission from the seller’s proceeds. During a FSBO transaction, it becomes the responsibility of the buyer’s agent to negotiate their own commission, rendering their services virtually free to you.
Another area of expertise your agent will have over a FSBO is the ability to close on time. Whereas the homeowner that decides to jump into the deep end for the first time on their own, a real estate agent does this nearly every day. It is their job, after all. Over the course of their career, your agent has made connections and relationships with home inspectors, lenders, and title companies to make sure all their clients’ transactions close in a timely manner.
One area in particular that is often overlooked by many FSBOs is the writing and negotiating of contracts. With so many hours under their belt, your real estate agent could draft up a contract in their sleep. FSBOs risk losing their deals if they aren’t aware of the nuances in real estate contracts. What are all the contingencies? How long is the inspection period and what does that mean for them as owners? Timelines, clauses, and multiple parties to coordinate with. It can all be too daunting for some, and it’s no wonder very few FSBOs actually stay as FSBOs.
What does this all mean for you as a buyer? Do you need a real estate agent if you’re looking to purchase from an unrepresented seller? We think so. Just as FSBOs could have trouble vetting potential buyers, the same can be said for vetting sellers. Having a real estate agent by your side can give you peace of mind that your agent has scoured all the records available to make sure the person you’re dealing with is the owner themselves. The time and money saved from doing it right the first time around certainly outweigh going in blind.