Many homeowners today relish in the prospect of selling these homes as For-Sale-By-Owner (or FSBO). This allows them to have complete control over every aspect of the process. Unfortunately, it’s also a breeding ground for a variety of corruption and mistakes that can cost either the homeowner or the buyer a great amount of money and lost time. Buying a home is an important investment and you shouldn’t chance a loophole that can cause financial distress.
When dealing with those who practice FSBO housing, contracts can be developed that are not necessarily legal. While it may not have been developed in this manner on purpose, sometimes things get overlooked or a lack of knowledge of local laws can put the buyer and seller into precarious positions. When you are looking to buy a FSBO property, you are putting faith that this person knows what laws are available for protecting themselves and you from fraudulent activities. While you can always take the contract to a lawyer in order to verify its legitimacy, you shouldn’t have to. Lawyers can cost quite a bit for their services.
2. Background Checks
When FSBO owners are looking for a buyer, many of them will conduct background checks. However, a large portion of these owners pocket the money and make a few “inquiries” around town using their own detective skills. What usually happens is that potential buyers that haven’t been properly screened wind up causing damage to the property and failing to honor the debt. While this can easily put the property back into the hands of the FSBO seller, it can be of a great loss to the owner in property damages and other debts that could be incurred while the “buyers” were living in the home.
3. Victimized Buyers
One of the allures that buyers find in FSBO sellers is the fact that many of them don’t require a credit check and can allow these people to move in immediately. In a world where credit can be a severe issue for some, these kinds of properties are ideal. Unfortunately, not everyone is honest and the buyer could be easily taken advantage of if the home is purchased out of extreme necessity. While we would like to think that the world is a pleasant place with honest home sellers, the truth of the matter is there are too many out there looking for an easy target.
4. Business is Business
There are a lot of homeowners that sell the property as a FSBO for no other reason than to save a few dollars from real estate agent fees. However, is the risk worth saving those couple hundred dollars? I have witnessed a FSBO seller save a couple hundred dollars in agent fees only to spend close to two-thousand dollars on two separate occasions regarding the exact same property because he was trying to “help” someone into a home who had a less than stellar background. Because the seller refused to run a detailed background check on both so-called buyers, he lost nearly four thousand dollars on the property in less than a year.
A real estate agent would have found the perfect person to put into that home which would have saved all of that money. Sometimes the risks are just too great when you’re trying to sell a piece of property whether you’re in a rural area or a big city.
This is a guest post by Liz Nelson from WhiteFence.com. She is a freelance writer and blogger from Houston. Questions and comments can be sent to: firstname.lastname@example.org.
If you have thought about FSBO, chances are it’s to save a few dollars. But just because you want to save a few dollars, doesn’t mean you still can’t use a licenced REALTOR® as most REALTOR®s are willing to help and some are flexible with regards to their commissions. If you’d like to meet REALTOR®s and see what they have to offer, start here and make the right choice.