What is a FSBO?
It's an acronym for: For Sale By Owner and it's pronounced (fizz-bo)
As a new home buyer, it's important to understand the possible reasons that a seller is selling their property on their own as a FSBO. Here's a few:
- They may have little or no equity in the home and need to save money.
- They may have had a bad experience with a Realtor in the past.
- They may have sold property as a FSBO before and are doing it again.
- They may have plenty of time to sell or aren't motivated to sell.
- They try on their own at first, since their new home will take 6 months to build.
- They have a relative in the business, who's helping them behind the scenes for free.
Now as a buyer, it's important to have your buyer's agent approach the FSBO for information about their home. Your agent will also be able to find out if the FSBO is willing to compensate your buyer's agent (most FSBOs are willing to pay a buyer's agent's fee).
As a Realtor, I understand a seller's position of wanting to sell their property on their own. They have every right to do that. But you need to know that by attempting to deal directly with a FSBO without a buyer's agent, you don't have any representation assisting you in the transaction and helping you negotiate through the entire process.
I believe that having an experienced buyer's agent can save time, money or aggravation. There are so many pieces to the real estate puzzle in today's market that need to be solved before it can hopefully come together. There's also a lot of emotion involved on both sides of the transaction. Most buyers don't want to negotiate directly with a seller, because they don't want to be put in a potential, confrontational situation. The seller may also not have the appropriate state-mandated disclosure forms that are part of a transaction.
When you decide to hire a buyer's agent, it's important to find out how they handle FSBOs. Some agents won't work with FSBOs and so you're missing part of the market. They won't even tell you about them. In some cases, FSBOs can be as much as much as 10% to 15% of an area's inventory, but they aren't always easily identifiable, because they may only have a hand-made sign in the front yard and aren't doing any other advertising.
In closing, I look at FSBOs just like any other seller in the marketplace. They are just representing themselves. If they have a property that you want, then I'll do everything I can to help you get it.
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