Questions about buying For Sale By Owner Homes.?

Question : Questions about buying For Sale By Owner Homes.?
So I’m wanting to buy a home, but in my area (near seattle), the prices are absurd, and I’m a guy who likes to save as much money as possible. I’ve heard of people selling their houses For Sale By Owner, and wondering if it is a good way to go, and what the ups and downs are. I’ve also got a few specific questions.
1. Does this mean you make payments directly to the seller? and if so, Is it common to find sellers that will charge very little, or no interest? (I really want to just make large payments and pay it all off in about 5-8 years)
2. Are FSBO houses generally much cheaper?
3. Do realators search for FSBO houses, or is that out of their realm?
4. Is there alot less public exposure with FSBO houses, meaning less competition and easier to find hidden gems that haven’t been looked at by every real estate agency in town?
5. Does FSBO generally mean the house is paid off, or might they still have a mortgage?
6. Do you ever find FSBO houses sold below their value?
Thanks.
seattle homes for sale

Best answer:

Answer by jpr302001
1) No. That would be a seller financed home. And usually seller-financed deals are for buyers who can’t qualify with a bank, but the seller is willing to take the risk… you usually pay a higher interest rate, not lower.

2) For the buyer, you might save about 3% on a FSBO. By the way, the seller usually pays all costs when using a realtor.

3) Realtors will usually not want to get involved in a FSBO deal because they are not assured commission. FSBO are NOT listed on MLS, which is the listing service realtors use.

4) Right now it’s a buyers market, so there are tons of stuff on the market & there are lots of good deals. In this market, FSBO doesn’t usually offer much of a better deal.

In my opinion, as someone who has bought and sold many properties, you should use always use a realtor — they offer a lot of service and as a buyer it costs you NOTHING.

Buying without using a realtor is like trying to represent yourself in court — not advised. This is probably the biggest purchase you will ever make. Do it right.

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Comments (4)
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#1 written by godged 1 year ago

FSBO means just that, the house is being sold by the owner.

#1 – You get a mortgage just like any other house you buy.

#2 – I have found that 95% of FSBOs are overpriced.

#3 – I have shown some of my clients FSBO houses, but see #2, and I have never sold one.

#4 – There is a lot less public exposure, but they do advertise them somewhere, and folks like you are out there scouring the ads looking for bargains.

#5 – They generally still have a mortgage.

#6 – See #2 and in my area, there are alot of very weathered FSBO signs, which tells me there aren’t many FSBO selling.

There is information out there that 1 in 5 people try FSBO, but the majority end up listing with a Realtor or keeping the property. The upside of FSBO is that there is no Realtor commission, but as the buyer, you don’t pay that anyway. The downside is that you have laypeople conducting the transaction, and from some of the questions posted in here, it can be downright scary what some people are doing.

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#2 written by acermill 1 year ago

Generally, FSBO’s are out there because the seller simply does not want to pay a brokerage fee for selling the property. Rare is the seller who will finance the property directly. If you do find one, expect to pay the going rate of interest.

FSBO’s are generally priced at market value. They are not as widely exposed, in terms of advertising, as are real estate agency listed properties.

Most FSBO’s still have mortgages attached to the properties. Some of them are sold below market value, some AT market value, and a few ABOVE market value.

In other words, if you think a FSBO is going to get you a deal, that’s very dicey. All you are doing is buying a property without professional representation and advice.

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#3 written by lookn.4par 1 year ago

1. Just because a seller is selling his/her own home does not mean that they are willing to finance the home for you. Most FSBO’s close like any other home.
2. A homeowner selling his own home does not necessarily mean that they are pricing it cheaper.
3. FSBO’s are not listed in the MLS so realtors only become aware of them thru advertising or driving by.
4. The exposure of a FSBO is determined by the seller, so it they advertise alot than they will get the exposure. This is generally less than a home on the MLS.
5. The home is not necessarily paid off, they still may have a mortgage.
6. FSBO homes are not statistically tracked so there is no way of knowing the sale price.

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#4 written by hj_thorne 1 year ago

First of all a house that is for sale by owner just means the home owner does not want to pay a realtor’s commission and therefore wants more profit from the sale. You do not pay money directly to the owner you purchase the home the same way with a FSBO as you would with a realtor, you go out and get your own mortgage with a bank and pay them.

No the homes aren’t usually paid off they also have a mortgage and are looking to make a profit.

FSBO’s are not hidden gems most people that sell FSBO don’t research the market and check out what sold recently in their area they just go out and put a price on the house, and most are over priced, people know how much they want to walk away with after the mortgage is paid off and it’s usually not realistic.

With a FSBO they won’t show up on the MLS so they won’t get as much foot traffic as one that is being shown by a realtor as they have more exposure to clients. That doesn’t mean that they haven’t been called by realtors asking if they want to have it sold professionally, it also doesn’t mean that realtors won’t bring people by to look at it but if they find that the seller won’t work with a realtor then they will attempt to steer their client elsewhere.

A FSBO is never sold below their value, trust me it’ll be over priced.

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