Wednesday, June 05, 2019 / by Kimo Quance
Reasons To Never Buy An FSBO (For Sale By Owner) Home
Home sellers can choose to sell their home on their own over using an agent.
For most people selling a home, finding an agent is one of the obvious first steps to making sure your property is competitive on the market. However, research into consumer housing trends has shown that around 12 per cent of sellers sold their property on their own and never listed with an agent. These listings are called For Sale By Owner (FSBO) homes.
Though this route might be beneficial for sellers looking to save money or avoid working with agents, those looking to buy a home can benefit from avoiding FSBO homes. There are many reasons why you should never consider buying an FSBO home such as a lacking sense of urgency, the potential for scamming and more.
1. No Sense of Urgency
In many cases, those who want to sell their home in a timely manner opt for a real estate agent over attempting to sell their home on their own. Therefore, an FSBO might not feel like selling their home is incredibly urgent. Sometimes, people put their home on the market just to see what their property is worth based on the offers it attracts.
Unfortunately, this puts the bargaining power in the hands of the sellers over yours. If the seller isn’t as motivated to sell their home as you are to buy their home, you can end up paying more than you need to for their property.
2. Lack of Documentation
When looking for a new property, you want to feel assured that its conditions meet standards. Real estate agents have access to documentation that accounts for liens, back taxes, assessments, repairs and other important paperwork that you need as a buyer.
Often, a seller who has listed their home on their own might not completely understand the documentation available. There have also been cases where an FSBO attempts to mislead buyers about the paperwork or try to cover things up. For instance, there might be issues with the fixtures in the property that the seller might try to hide.
3. No Code of Ethics
Furthermore, an FSBO is less trustworthy in comparison to a licensed real estate agent. When a homeowner sells their own home, they are not bound to the same Code of Ethics that a licensed real estate agent would have to abide by. This means their motives might be questionable and they may attempt to deceive you in order to sell their home.
4. Risk of Scamming
Scamming isn’t entirely rare in the real estate industry. With a lack of documentation and no code of ethics, the likelihood of facing a scam is even higher with FSBO homes. Unless you’re well-versed in the different legal forms that are involved in purchasing a home, it could be easy for an FSBO to attempt to scam you or to cover up important details.
For example, there is a range of legal forms such as contracts, property disclosures, occupancy agreements, lead paint records and more that need to be signed. If you don’t know what these are meant to look like, you could be purchasing a property with hidden damage or even be scammed out of your escrow money.
Ultimately, there’s a reason why most people choose qualified real estate agents over listing their homes on their own. You might not want to factor out FSBO homes from your search altogether. However, there are definitely many important factors to consider if you do end up finding an FSBO that seems perfect for you. Have you had an experience with an FSBO home in the past? Let us know your experience in the comments below.