My New Blog

BUYERS BEWARE!!
FSBO (For Sale By Owner)

When you're searching for a home, you're making decisions that will have long-lasting emotional and financial impacts on your future.  The gravity of the decisions you make are profound to say the very least.  When you're with a Realtor, you can rest assured that they will work continuously throughout the process to ensure that your transaction will be an enjoyable and positive experience and the end result is a home that will bring you happiness and enjoyment for years to come.  Unfortunately, your buyer's agent or Realtor can only ensure that everything is accurate on your side of the transaction.  They do not always have the ability nor should they take liability for the seller's portion of the transaction. 

This is where a large risk comes in for you, the buyer if you're putting in an offer on a FSBO.  Only 8% of FSBO properties make it through closing.1  You've gone through securing your financing on this property, you've viewed a variety of different properties.  You've discussed it with your business associates or family.  You've sold your home or sublet your apartment.  You've thought about this for countless hours and of all the homes you viewed with your Realtor, you're sure that this home is the one for you.  You arrive at closing . . . and the paperwork is wrong because a line was not properly filled out.  Maybe there's a decimal point missing or a piece of paperwork is missing.  Whatever the case, your closing is now one of the 92% of FSBOs that cannot close.  You're frustrated, your Realtor is frustrated for you as well.  They've invested a lot of time and effort in your goal of owning a home and it's fallen apart.

There are a number of steps you as a buyer have to go through on your path to home ownership.  No part of the process involves easy decisions.  Comprehensively, after this amount of committment, what will you do if the home of your dreams slips through the seller's fingers?  Is it worth it?

Side Notes: 

Many Realtors will not enter into a transaction or search MLS Listing for FSBOs due to the low closure rate and the risk of their clients not getting a home that they want.  Be sure to ask your Realtor if they will show you FSBOs.

FSBO Homes are typically overpriced for their market.  This is most commonly in part due to the emotional attachment the owner(s) has to the home.  Another part of this may be due to the owner's lack of knowledge of current market values and comparative sales in the neighborhood.

1  SOURCE:  Wisconsin Realtor's Association State Statistics on Closings