With consumer confidence indexes increasing, mortgage interest rates are back on the rise. As a result, many homeowners are eagerly working to sell real estate must faster than in months past. When selling a home, a trend in the “for sale by owner” market has increased with many homebuyers commonly finding homes in the FSBO market listings. As a home seller or homebuyer, weighing in on the disadvantages of listing and purchasing real estate in the FSBO market will ensure a more educated decision is made with regard to sale of a home listed and, possibly, expedites the sale and purchase of the property before real estate interest rates aggressively climb.
When listing a home as “for sale by owner”, FSBO, it is crucial, as a home seller, to understand the complex nature of the real estate transaction about to take place. From listing the real estate, showing the real estate and negotiating final sale prices, listing a home in the FSBO market can be time consuming.
One major disadvantage in the FSBO market, for a home seller, involves the negotiating of the sale price. With statistics revealing real estate commonly selling for approximately 16 percent more when sold through a realtor, the home seller may not prove more profitable when selling as an FSBO. While using a realtor, traditionally, will require the home seller to pay the six percent realtor fees, this 16 percent average sale price difference far outweighs the disadvantages of paying a realtor fee.
Beyond realtor fees, listing a home as FSBO will open a door for unethical conduct on behalf of both the seller and the homebuyer. Because neither party, in the sale and purchase of real estate, is bound by licensure in the state, nor affiliation with a professional group, a home sold under FSBO may be subject to many unethical marketing, financing and show or appraisal acts which can lead both the home buyer and the home seller into potential legal ramifications months and years later. Thus, any financial savings, when listing on FSBO, will be negated with potential legal fees in future actions.
For home buyers looking to purchase a home listed as FSBO, it may prove beneficial to retain the services of a realtor and pay the buying realtor’s fee which is generally listed as three percent. While this three percent, under normal real estate transactions, is paid by the home seller, in a FSBO, when the buyer is represented by a realtor, this fee can be negotiated but, commonly, is paid by the home buyer. While the realtor fee of three percent may seem costly, it is advantageous to retain the realtor to ensure the home buyer’s interests are protected in the real estate transaction.
For more information regarding FSBO processes, visit www.fsbotips.com.