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For Sale By Owner (FSBO) properties are
properties that owners themselves decide to list without the aid of
a real estate agency.
There are various types of FSBO’s, some where the owner enlists
minimal help from a real estate agency, essentially to place the
house in the MLS for a small fee, and others where the owner manages
all details from the advertising through the closing of the home.
Because FSBO properties are not listed and
handled by professionals, buying a FSBO property can be much more
complex than buying a property listed by a real estate agency.
In particular, many sellers are not knowledgeable about
disclosure laws and contract laws.
Regardless of whether a property is listed with a real estate
agency, most of these laws must still be followed.
FSBO properties also have a much higher
standard deviation of prices than real estate agent listed homes.
As FSBO sellers have neither the historical sales information
available to real estate agents nor the feeling for current market
trends, it is very common for FSBO properties to not reflect current
house values. Sometimes
this can work in your favor when a seller prices a home under market
value, but more often the naturally instinct that your home is ‘the
best’ means many FSBO properties are priced above market value.
In addition, because the owners are listing themselves to
save the real estate commission, they are often unlikely to accept a
price lower than a 5% discount.
 For
these reasons, it is highly advisable to use a real estate agent for
purchasing any FSBO property.
A real estate agent will ensure that the seller follows
Washington State and federal disclosure laws and will use contracts
prepared by knowledgeable attorneys.
A real estate agent will also make sure you do not pay too
much for the property.
If you sign a buyer’s agreement with a real
estate agent, that agent will gladly show you FSBO properties if you
wish to see them. The
buyer’s agreement will guarantee the agent a commission from the
sale, allowing her confidence that she will be paid if you choose to
buy a FSBO property.
However, while real estate agency listed properties clearly state
the buyer’s agent’s commissions, FSBO properties often have no such
statement. Therefore
the commission for the buyer’s agent must be determined when an
offer is made.
One of
the advantages of signing a buyer’s agreement is it allows the real
estate agent the opportunity to show you all houses within your
preferences, regardless of whether they are FSBO or real estate
agency listed properties.
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