There’s really only one reason why sellers would choose to go the FSBO route – to save money on realtor commissions. Unfortunately, what many of these sellers do not realize is that it’s highly possible to actually wind up wasting money due to costly mistakes made throughout the process that could have otherwise been saved had they hired a professional to help in the first place.
There are tons of reasons why homeowners should not sell their homes on their own, but that’s an entirely different discussion. Here we’ll talk about things that buyers should be wary of when considering a FSBO purchase.
FSBO Sellers Have No Code of Ethics to Follow
Licensed real estate professionals are bound by a specific Code of Ethics as per the National Association of Realtors (NAR), and are trained in certain standards when dealing with the public and their peers. Basically, this Code guides real estate agents in their business and gives their clients peace of mind knowing that these professionals are educated and committed to providing honest, quality service.
A FSBO, on the other hand, has no Code of Ethics to follow. Their commitment is to themselves and to selling their home. Their main objective is to get the most money possible for their property, without always ensuring that anyone else’s best interests are catered to. While not all FSBO’s are necessarily shady, you still don’t have the comfort of knowing that they’re being completely honest and upfront about all aspects of the transaction.
FSBO Sellers Could Withhold Important Disclosures
A professional real estate agent will understand all the necessary documentation and disclosure statements that need to be provided to sellers. By law, homeowners need to disclose the known condition of the home and any repairs and renovations that have been done to the property.
If a new bathroom was installed at some point in the past, for instance, you will want to know if the required permits were pulled before the project started to ensure the work done is adequate and even safe for use. Issues like these will need to be disclosed, and the FSBO seller could give you a hard time obtaining this information either because they are simply unaware that such documentation is required or because they may be trying to hide something.
FSBO Sellers May Be Tough to Negotiate With
When it comes to negotiating the sale of a home, it’s always best to have two unbiased third parties handle the wheeling and dealing on behalf of the buyer and seller. When the seller is directly involved with handling the negotiations by themselves, things can get heated very quickly. After all, they are being tasked with selling their own home, a place where they perhaps raised a family and built memories. Given this fact, they may be a little more challenging to negotiate with, especially when it comes to the purchase price.
Real estate negotiations involve plenty of other complexities aside from just the offer price, and include the closing date, inspections, financial terms, appraisals, and so forth. Ideally, real estate professionals should be the only ones on the front lines handling all this.
FSBO Sellers Could Make the Escrow Process Difficult
Even after an offer is agreed upon, there are still processes that need to be tackled before closing, such as having a home inspection done, obtaining mortgage approval, performing a final walk-through of the property, and so on. While these contingencies should be included in your real estate contract, FSBO’s could still make things difficult for you.
Whether they make it hard for you to book a time slot to have an inspection performed or are hounding you for verification that you’ve been approved for a home loan, dealing with a FSBO rather than a professional real estate agent can be a real nuisance.
FSBO Sellers Might Not Be Serious About Selling
How urgent is the FSBO’s need to sell? It’s quite possible that they may only be testing the waters of the market to see what kind of bites they can get. In the meantime, you could fall in love with a home that the owners aren’t even ready to part with just yet. On the other hand, sellers who hire a real estate professional and sign a Listing Agreement contract with them are likely more serious about selling.
The Bottom Line
Homeowners who go FSBO will most certainly encounter issues along the way, but buyers can also face potentially unpleasant situations when they purchase these owner-listed homes. Your real estate agent will be able to guide you to homes that meet your criteria and are listed with other agents to boost the odds of a much smoother and more professional transaction.