The real estate market leaves people with many options. Though it can be a complicated experience, some still choose to sell or buy a home without the help of a real estate agent or broker. This can be advantageous because they can engage in the market without paying for professional fees. However, for sale by owner mechanisms can also bring them with some disadvantages. Both sellers and buyers choosing an FSBO should know about these disadvantages in order to make them reassess the need for assistance from an agent. It is necessary to check some of the drawbacks related to for sale by owner properties in order to understand the dangers of engaging in the real estate world without professional assistance.
Disadvantages for the seller
A seller who chooses to promote his property for sale without the help of an agent can have problems with estimating an asking price. Since he does not know the fluctuations in market prices, he would not be able to base his decisions in real prices of homes for sale. In addition, his inexperience would also lead him to inaccurate computations when trying to assess the value of his property. If he comes up with a wrong price, he can either scare off some potential buyers or experience a serious financial loss. Overestimating a price can cause lack of interest from buyers, while underestimating a price can make you lose the true value of your home. In addition, he will have a hard time when asked for an objective explanation regarding the asking price he has set.
Another disadvantage of choosing the FSBO mechanism is the time and money a seller will waste from researching. Since he does not know anything about real estate, he will engage in months of complicated research in order to understand what lies beneath real estate transaction. Aside from losing large amounts of money, his home for sale would be delayed because of his attempt to know more about real estate industry without assistance from experts.
Disadvantages for the buyer
Buying a FSBO also poses some threats for a homeowner. An individual who is not guided by real estate experts can experience holding fake deeds. In a fake deed, he might pay for a 150 sq. ft. of land when he is actually purchasing only 140 sq. ft. This will put him in the losing end, especially if he pays more than he should actually pay. He can also inherit a huge amount of debt if his seller did not pay for closing costs like property taxes and mortgages. He can resort to filing complaints but this is actually more expensive than paying an agent to make sure that his interests are met during a transaction.
Therefore, legal issues can become a great problem for buyers who choose to purchase a house for sale by owner. Problems in the deeds of trust, property claims, and other legal areas can threaten the transfer of ownership into their names. In addition, they would not get the chance to conduct a home inspection that can guarantee the quality of their purchase. Inability to detect leaky pipes, malfunctioning home systems, and other structural disadvantages can become a huge problem for homeowners who do not perform prior inspections.
These are only some of the downsides of dealing with an FSBO. Avoiding such threats can be possible with the help of accredited real estate agents. With their assistance, forgery, legal issues, and other problems can be avoided during the sale or purchase of a home.
