Buying a FSBO Home: The Best Choice?
If you're in the market for a new home, you may have wondered if buying an FSBO (For Sale by Owner) home is the right way to go. In this article, we'll take a look at the pros and cons of buying a home FSBO, versus going through a realtor.
The most obvious advantage of buying a home FSBO is the potential to save a significant amount of money. Realtors usually receive a commission somewhere in the range of 6%, which can easily amount to $20,000 to $30,000 on the sale of a nice home. When a home is sold FSBO you can often negotiate a lower price because there are no realtor commissions to be paid from the sale.
Buying a home FSBO will also allow you to negotiate directly with the seller, which can often result in more flexible terms on the purchase of the home. For example, the seller could agree to pay part, or even all, of the closing costs on the home. In tight real estate markets, many sellers will gladly cover at least a percentage of the closing costs in order to get a quick sale.
You may also be able to negotiate a "lease to own" deal with the owner of the property. If your credit score is low, or you can not afford a down payment at this time, a lease to own arrangement can be a good option.
While the above benefits make buying an FSBO home seem very attractive, there are also downsides to be aware of. For example, if you purchase through a real estate agent, they will usually have a greater knowledge of the real estate market in the area, and can warn you of potential problems with the property or the neighborhood that could negatively affect your investment in years to come.
A real estate agent will also have a wide range of contacts in the area, and normally an experienced team behind them to help smooth the details of the sale. Homeowners who sell their properties FSBO rarely have as much experience and knowledge of the process as a qualified realtor, so there can be more "surprises" and issues during the sales process.
Having said all that, buying a home FSBO can't be a great experience, but you will need to be patient and above all else, make sure to have the home inspected by an independent professional before you decide to buy. Although you will have to pay the costs of the inspection, it is absolutely worth the money to be informed of any potential improvements and repairs you will have to make after buying the home.
Finally, when buying a home FSBO, make sure to ask the seller for a copy of the "disclosure statement." By law all FSBO home sellers must fill out a disclosure statement outlining any potential problems with the property. Having a copy of this statement will give you legal recourse in case you buy a home that turns out to have undisclosed damage, such as termite problems, water damage, or serious plumbing problems.
By doing your homework, getting a professional inspection, and insisting upon a copy of the disclosure statement, buying a home FSBO can be just as safe as going through a realtor, and potentially save you a great deal of money.
Read more - FSBO Tips - How to Deal with Low-Ball Offers - How to Get a Higher Appraisal
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