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FSBO and its Risks When you Buy this Kind of House

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By : Flynna Jones    99 or more times read
You plan on buying a house because this is your much-awaited event in your life. However, as you stroll down the community, you see a house that caught your attention. A house that you think would be perfect to accommodate your family. But when you got inside and inquire about it, you see a sign saying, For Sale By Owner.

The situation above is a common scenario in any home buyer’s life. He can not avoid the fact that he will be seeing several houses sold by the owner itself. Due to economic recession, homeowners who plan to sell their property would prefer to do the selling job alone. This is to free them from paying the commission and just bring home the whole profit by themselves. If you have found your dream house sold by its owner, there might be risks involved if you pursue it. Buying FSBO properties can be a bit different and unsafe than buying a regular house for sale. Read the remaining paragraphs below so you will know these issues.

You notice that the owner is the only one doing the marketing especially when there is an open house. It is the owner who walks you through the whole property. There is a huge difference when an agent would do this since he will be asked to give full disclosure. Compared to an owner, he might not be able to tell you the “exact” condition of his house, for the very reason that he badly wants to sell the property as soon as possible. A good example for this is if the property went through flood for the past 7 years. Instance such as this must still be disclosed to the buyer even if it occurred few years back already.

Legal aspects of a deal are very important. If you are selling the house, you might be missing other legal elements of the deal. Even if you have an attorney to consult to, there are cases where you will not be able to completely comply with all the legalities of the deal. Unlike if an agent would handle the for sale house, he is already knowledgeable about these cases so there is no such way he misses any legal matter. They have been selling houses for several times so they already know how to go about the whole buying process.

Aside from legal matters, if the owner only handles the selling of the house, he might not be able to give the buyer a clean title of the property. If the house is included in the listing and dealt by the realtor, the ownership can easily be verified and the buyer will obtain an initial title report. This will tell the buyer if there are title issues, liens and other problems attached to the house.

Home buying activity is normally financed by lending institutions. Agents can help you apply and get a faster loan approval. So if it is a FSBO house, the owner does not know other names of lending companies and could not help you with your loan application. Thus, the financing aspect will probably take longer before you are granted a loan.

Purchasing a house is indeed a complicated activity. This will be more complex if you work with not so knowledgeable people. Negotiating with the owners who sell their home can be riskier and would take more time than dealing with the agents. So, before you enter into any agreement, think first and consider the factors involved.
Phoenix Real Estate and Maricopa AZ Homes can give you great ideas on real estate properties for sale.

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