Buying Preparation

Making the Decision to Buy For Sale By Owner 

The motivation to buy a private list home directly from a real estate owner can save you thousands of dollars.  To effectively compete, a seller will price a home at, or slightly below the market value of the home.  The private seller is aware that he/she has anywhere from three to seven percent "negotiating room" because a real estate commission will not be paid on the transaction.  Therefore, it’s in the sellers best interest to sell FSBO because he/she can sell faster (because the home should be more competitively priced than those listed or sold by full priced real estate agencies) and ultimately net more from the sale.  Sound confusing?  It's really not.  Take the example of a $200,000 home.  Assume a full service agency commission for the sale is seven percent, or $14,000.  In this scenario, the seller will only net $186,000 from the sale.  If the seller sells as a private sale, then the price can be significantly lowered by several thousands of dollars, say to $195,000 and the seller benefits by $9,000 (the difference between the $195,000 sales price and the $186,000 net proceeds if listed with a real estate agent).  The buyer benefits by $5,000 because the purchase price was $5,000 less.  It’s a win-win situation for both buyer and seller.  Both benefited financially and more than likely, the home was on the market for a shorter period of time.

Why Buy FSBO? / Pre-approval for Loan / Find a Neighborhood / Negotiations/Offers / Contracts and Closings / Moving