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For Sale By Owner Homes - For Sale By Owner Homes: What's the Difference? - Pros of FSBO Homes, Cons of FSBO Homes, Conclusion

seller house price dealing

You may have seen homes for sale by owners in your neighborhood, or even heard people talking about the advantages and disadvantages of going “FSBO”. But have you ever stopped to think what exactly that entails? And more importantly, what it would mean to you as a seller or a buyer of a home? This guide will explain to you what the pros and cons are of doing it yourself versus hiring an agent.

Pros of FSBO Homes

For the Seller
Through a home sale by owner, many homeowners take advantage of the chance to “cut out the middleman”, thus avoiding lost profits to an agent’s fees. Agents take a percent cut of the home’s selling price – usually around six percent or so. It may sound small, but this adds up to a lot of money when you’re dealing with hundreds of thousands of dollars!

By avoiding agents, home sellers become the main contact with the public (which could be pro or con, depending on the seller’s personality). The definite pro is that they have complete control over when and how to show their home to prospective buyers. And really, who knows the home better than the person who was living in it for the last X amount of years?

Another big pro for many FSBO’ers is complete control over the home-selling process. They set the price, they call the shots, and they do things on their terms. They don’t mind the slight increase in workload if they can maintain their control over this important transaction.

For the Buyer

Through dealing directly with the homeowner, many potential buyers feel that they can get a much better sense of the ins and outs of a house. There is an added bonus of not having to deal with a pushy agent who is motivated by home sale commissions, but rather with the person who owned and loved the house.

Sometimes sellers can work out unconventional deals with FSBO homeowners that wouldn’t normally take place through agents. Sometimes it’s as simple as a little more flexibility in price. Because there is no agent there to take a 6% commission, some homeowners will take that into consideration when deciding on a final price, giving a break to the buyer instead.

Cons of FSBO Homes

For the Seller

In a house sale by owner, the seller may find him or herself faced with more work than expected. Instead of leaving everything to an agent, now the seller becomes the primary contact for the home, and has to talk to potential buyers on a regular basis to answer questions and set up times to show the home. The seller is faced with the odd situation of becoming a tour guide in their own home. If the seller isn’t a people person, this could be a difficult assignment.

Some people equate for sale by owner homes to “bargain basement” prices, which is definitely not always the case. The FSBO seller should be prepared to receive many “lowball” offers, or less-than-serious inquiries about the house.

The FSBO seller must also market the house by their own means, not by using a real estate agent’s listing services. While the options to do this are plentiful in today’s day and age (craigslist, zillow, forsalebyowner.com, etc), it does amount to a lot of work to keep up these ad campaigns.

For the Buyer
Sometimes dealing with the actual owner of the house can be awkward, especially if they let their emotional connection to the house interfere with the business of selling it. This could cause the seller to set the price unusually high, make unreasonable demands on the continued care of the house, or a host of other potential issues. Of course, this kind of thing is always a potential issue when dealing directly with a seller of any kind of item. But it does take on a more serious tone when it involves such a large, life-changing item as a house.

Conclusion

Whether you go FSBO or not, it’s good to know the pluses and minuses behind each option. Once you do, you can make an intelligent decision based on your own needs and find what works best for you.

FSBO’s can be a great way to cut out the middleman, but it is still a very good idea to have a real estate attorney work with you on the mortgage and closing papers. If you are buying a house, you should also hire a home inspector to perform a full inspection of the home before closing. Do-it-yourself can be a wonderful way to save some money, but it does have its limits! Be sure to get professional assistance wherever it is needed.

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