Buying Preparation

The motivation to buy a home directly from a homeowner 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 seller has anywhere from three to seven percent "negotiating room" because a commission will not be paid on the transaction.  Therefore, it is in the seller's best interest to sell FSBO for two reasons.  First, the home will sell faster because the home is more competitively priced than those listed or sold by full priced real estate agencies. And secondly, the seller will 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; $200,000 - $14,000 = $186,000.  If the seller decides to sell FSBO, the price of the home can be significantly lowered by several thousands of dollars, say to $195,000. The seller benefits by $9,000, the difference between the $195,000 sales price and the $186,000 net proceeds if listed with a full service agent.  The buyer benefits by $5,000 because the purchase price was $5,000 less.  It is a win-win situation for both buyer and seller!  And more than likely, the home was on the market for a shorter period of time.