FSBO (For Sale By Owner) listings are a method that home sellers use to save money on agent costs. Without a seller’s agent participating in the transaction, the seller will not have to pay the agent’s commission. This method, no doubt, saves thousands of dollars when the seller succeeds, but it can also reduce the potential buyer pool and make the property much harder to sell. If you are a buyer, you should consider FSBO homes, but you should keep a few things in mind before pursuing this class of real estate assets.
You Can Still Use an Agent, Unless…
If you use a buyer’s agent to search for FSBO homes, the seller will most likely need to pay your agent. After all, the agent will have sought out the property and brought it to your attention. Without this action, the house would not have sold, so the seller will most likely have to agree to pay a 3% commission fee.
What if the seller refuses? In that case, you can still use your agent to help you with the nuts and bolts, such as hiring lawyers, contacting appraisers, dealing with title companies, and more.
You Should Still Get Pre-Qualified
Getting pre-qualified for a home loan is typically a fast and painless procedure. Your bank will take a quick look at your credit to ensure that you can reasonably expect to get a mortgage. If it is satisfied, it will pre-approve you, and this designation will show a seller that you are serious about making an offer. If your FSBO seller is beset with multiple offers, pre-qualification can set your offer apart from the rest. Do not hesitate if you are serious about buying a house.
Who Handles Escrow?
Typically, agents will hold the money paid by the buyer to the seller until the sale closes. If there are no agents, hire a lawyer to perform this function. It needs to be done, and neither the buyer nor the seller is fit for the task.
Once you find an FSBO home that you want to buy, you can quickly complete the purchase using Propy’s Transaction Platform. Until then, use the above-mentioned techniques to give yourself the best possible advantage.