Is “For Sale By Owner” Good Or Bad?
As a buyer or a seller, there are pros and cons to the “For Sale by Owner” house. For Sale by Owner, or FSBO, homes are exactly what they sound like—homes on the market for sale by the owner, without the help of a real estate agent. A common reason someone sells their home without an agent is the belief they will save money by avoiding a realtor commission. That might sound good on both sides but the realtor’s commission is often a good investment, especially when you find a realtor that works for you. Whether you are a current homeowner thinking of selling or a potential home buyer that wants to know the risks, here are a few of the Do’s and Don’ts of FSBO to give you a better idea of what to expect.
Compare prices. Always check comparable homes available on the market that are similar to the home you’re interested in or the home you are selling. This will help you determine if the FSBO price is accurately reflecting market values. Remember that without a real estate agent, the seller may not necessarily adhere to market prices, and could be overcharging. If they’re undercharging, that could be an attempt to distract from issues that the home has underneath its beautifully painted exterior. As a seller, take your cue from homes similar to yours and stay within that margin.
Use a buyer-broker and/or an attorney to close the deal. As a buyer, the buyer-broker will represent you in the negotiation—oftentimes a tiring and trying process—and will be working for your benefit, not to the seller’s advantage. As either a buyer or a seller, an agent or attorney will be extremely helpful with all the legal paperwork that comes with buying and selling a home; unless you are particularly experienced, there will be a lot in the paperwork that you may not understand. You will also want an attorney to deal with the titles during the closing process.
Assume the seller is disclosing everything. When you work with a real estate agent, they have a specific code of ethics and standards that they must adhere to, which includes disclosing anything that might affect your experience with the home. The pool in the backyard leaks and has flooded the basement? That’s something you’d want to know. A FSBO seller might not tell you, but a real estate agent would be required to mention it. As a FSBO seller, it is important to be as honest as possible and offer potential sellers past information on your home such as proof when you had the roof redone or before and after photos of the new septic system.
Forget to do your research. The homebuying process is long and confusing—don’t forget to research the process before you begin. If you are a seller, be sure to do your homework too! It isn’t just a matter of sticking a sign in front of your home! Be prepared to engage your potential buyers and have information for them at the ready. As a seller, you need to think about where and how you can list your house and things like organizing an open house or thinking of how to interest buyers. All things that a realtor would normally do for you.
Assume you know it all. As a buyer, wherever you are in the process, it’s never too late to take Homebuyer Education. Homebuyer Education will explain the entire process, give you important recommendations such as getting a home inspection and create connections with local lenders, inspectors, and real estate agents you can use. NeighborWorks of Western Vermont also offers one-on-one financial counseling when you attend the class to help you make sure your finances are in order and that you’re ready to secure your dream home!
Take the safer, more reliable road: working with a licensed realtor! Realtors adhere to proper standards and ethics while helping you to understand the home buying and the home selling process. They will be with you the entire way, and you can be sure that you are getting help from an experienced negotiator!
At RealtyWorks, we have two in-house realtors, Gene Felder, and Justin Davis, who are ready and willing to help you either buy or sell your home. Simply call (802) 438-2303 to get in touch with us. And if you’re still on the home hunt, visit www.realtyworksvt.com to check out our listings—we just may have the dream home for you!