The fact there are so many things to watch out for with an FSBO house does not mean buying one is a bad idea. It simply calls for caution to make sure that the buyer knows what they are getting into. Knowing why the seller has decided on this option can provide insight into their intentions and even their trustworthiness.
In a traditional sale, both the buyer’s and seller’s agents charge approximately 3% of the home’s sale price. During closing, payment of both commissions is the responsibility of the seller. The most obvious incentive for deciding to choose a DIY sale is to save money on real estate agent commissions.
Some sellers feel they know enough to take care of a sale by themselves and simply do not need a real estate agent. This may be true for some people, but many underestimate just how much work and expertise the process takes. Realtors and real estate agents must study and pass exams in order to become licensed. They commit to following a code of ethics and continued professional education. A seller knows their house better than anyone else, but without specialized training, they might make mistakes in writing up contracts or making disclosures.
Advertising a house as “For Sale By Owner” can also be a way for a homeowner to test the market. Particularly during a hot housing market, homes are selling quickly and with little effort. A seller can see if the house generates an offer that makes moving worth it—and worry about finding a new home if and when they decide to accept.
Finally, there is the unfortunate reality that some sellers might be dishonest. They could be trying to unload a house with serious problems. Or reputable real estate agents have refused to represent them for some reason. This is why it is important to learn as much as possible before committing to a house that is “For Sale By Owner.”