During your scouring of the Seattle real estate market, you may periodically come across the phrase “for sale by owner”, or “FSBO”. The words themselves are pretty self-explanatory, but what exactly does an FSBO home entail? And, more importantly, what does it mean for you, the buyer?
In the simplest sense, the only difference between an FSBO home and anything else on the market is that the seller is not using a real estate professional to assist with the sale, usually in order to avoid paying commission. Without a hired professional on the seller’s side, it’s up to the seller and you (or your agent) to determine who takes on the duties that might otherwise be handled by the listing agent. These tasks can include holding escrow, writing up contracts, and negotiation.
While the seller is opting to avoid having a professional on their side, it isn’t to say that the seller is necessarily unqualified. While some sellers are not as well-educated as they could be on pricing or negotiation, it’s possible to find sellers who have extensive experience in the market and believe the FSBO route just makes financial sense. The most common places where the seller may stumble are the pricing of their property and the negotiation process. In the case of list price, sellers can sometimes be too emotionally-attached to their home to set a fair price, resulting in an overpriced home that often goes unsold. In the negotiation stage, some sales can be lost due to the seller not wanting to budge, but research by the National Association of Realtors indicates that most FSBO homes actually sell for less than homes sold with agents.
FSBO also doesn’t mean the seller has something to hide. All sellers, whether they have an agent or not, must still adhere to local real estate laws, including full disclosure of problems in the house. However, it’s important to trust your gut, or your own agent, when it comes to how the seller conducts business. Some sellers may not be aware of proper procedure, or want to do things their own way. In these cases, you have every right to request proper procedure, or move on if the transaction becomes questionable.
When considering a FSBO home purchase in Seattle, the important thing is to not treat the house any differently than you would if the home had an agent attached. Negotiate well, enlist help from your real estate professionals, and take the home inspection very seriously. FSBO listings can be viable homes, despite the negative buzz that can sometimes surround them. Who knows—your next Seattle home may end up having been for sale by owner