If you’re searching for the perfect home, a real agent will be your representative. The agent will arrange a tour and negotiate the price. They’ll then follow up to see if you are interested. You may hire an agent to assist you with the paperwork and other processes required for purchasing a property.
But there is a growing trend in the property market where the real estate agent is removed from the equation and homeowners take it upon themselves to sell their property on their own – a trend called “for sale by owner” or FSBO.
FSBO: Why do homeowners choose this route? How about purchasing a house directly from its owner? Let’s dig deeper.
What is it that makes home sellers want to FSBO?
There are several reasons why homeowners turn toward the “for sale by owner” approach when it comes to selling their properties. These are just some of the reasons homeowners choose to sell their property “for sale by owner”.
1. Attain a higher return on investment
There are several benefits to enlisting the help of a real estate agent – they are experts on their field and updated on recent market trends and legislation changes, and they have extensive experience in the home sales process.
They can be expensive. A typical commission for real estate agents is between 2% and 3.3% on the final sale price. So, if the home sells for $600,000, slightly above CoreLogic’s national median house price, homeowners will be forking out between $12,000 and $18,000 on commissions for their agent.
FSBO can help you eliminate these costs and increase your net profit.
2. Managing marketing expenses
Agent’s commissions are not the only expenses home sellers are concerned about. Agents require excellent advertising to attract potential buyers. To get your property off the marketplace quickly, a professional agent in real estate will help you to create a solid marketing strategy. These marketing strategies can run from thousands of dollars to hundreds of thousands.
Outsourcing the marketing process can help many home sellers manage these expenses. Many FSBO websites allow sellers to list their properties for a minimal fee.
3. Greater control over the transaction
Homeowners have greater control over their property and can sell it independently. You can keep track of how many people visited your open house and how many inquiries you have received. You can also receive feedback directly from buyers. As they are focused only on selling your home, a homeowner can help you sell your property more quickly.
What are the benefits to buying a home that has been sold by its owner?
You have many advantages when you buy a house directly from the owner. These include:
1. Direct communication with the seller
The best part about buying a FSBO home is the ability to speak directly with its owner. This gives you more freedom to negotiate the selling price. This allows for you to communicate directly with the seller your concerns.
Face-to-face meetings can make the transaction more personal and help to build a relationship between the owners. Both you and the seller can benefit from this type of meeting.
2. Learn more about your home
Because they have lived in the house for many years, the owner is more familiar with the property than anyone. They can give you additional information about the home – like certain features you may have missed during your tour including what the neighbours are like, what lifestyle amenities are accessible, and what they like most about living in the neighbourhood.
What are the negatives of purchasing a home that has been sold by the owner?
There may be issues if the owners become involved in the sale. These are:
1. Market knowledge is not sufficient
Many homeowners don’t have sufficient knowledge about the market or the process of selling their home. If the seller has an unrealistic estimate of the property’s value, this could be problematic. You need to have experience to file paperwork and meet other legal requirements. It can cause delays and expensive legal mistakes if the seller isn’t experienced in this area.
2. Emotions can get intense
It can be difficult to sell a home because it is where many memories are made. Some home sellers may not be able to keep their objectivity intact while selling their home. You, the buyer, might need to deal with this. Some sellers might refuse to accept an offer, or be offended by feedback. These cases may be helped by a real estate agent who can remove the emotion from the process and prevent owners from making costly mistakes.
It is important to do your research and plan your strategy before you consider buying a home through FSBO. Buying a home directly from the owner has its share of benefits and advantages, but one thing to remember is that you and the seller have one thing in common – you both want to get the best value out of the property.