Homes listed as for sale by owner (FSBO) usually come with a lot of questions: Is it easier or riskier to buy? How do negotiations work? Should I involve an agent? Here are some pointers from The Wall Street Journal about what to keep in mind when looking at an FSBO:
First, don’t avoid a home because it’s being sold directly by the owners, especially if it meets all of your criteria. The main difference is that you will usually meet the homeowner face to face, rather than conduct negotiations through agents. However, you may also have the option to work with a buyer’s agent.
While many FSBO sellers may be unfamiliar with real estate processes, they must conform to all stipulated laws, such as providing disclosure forms that detail the condition of the home. Learn your state’s requirements and demand the most extensive disclosure.
It’s helpful to understand that many FSBO sellers have a special attachment to their home and may overprice it. Get a competitive market analysis (CMA) to outline comparables in the area. - You should also never let the seller hold the money in escrow. Arrange for a bank or other neutral entity to manage the escrow applied to the down payment.
Lastly, as with any other homebuying process, it’s always best to go in with your eyes open and to trust your gut in FSBO deals. Just like any negotiation, it may or may not work out.
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