Straight Talk about FSBOs!

Straight Talk about FSBOs

FSBOs aren't as common in our market as they are elsewhere. So in all likelihood, you'll probably end up buying an MLS-listed home, and all of the following will just be "nice-to-know" information. Still, as "The Home Buyer's Advocate", it's my duty to fill you in on the issues that may arise should you decide to pursue an FSBO listing.

The bottom line is this: FSBO transactions can sometimes be "problematic," so it pays to be aware in advance of entering into dealings with a Home Seller that has elected to go this route.

By that I mean that there are so many legal issues pertaining to the transfer of real property, that not having at least one Realtor involved, even if two aren't, is risky. The rate of lawsuits by one or the other party stemming from FSBOs is a higher percentage than with professionally-managed transactions.

At issue in some cases is:

the legality of the Purchase and Sale contract
the legality of any exhibits, addendum, amendments
the binding nature of any existing property easements
whether or not one party or the other has fully performed contractually in all instances
whether there has been "full disclosure" of the condition of the home and property by the Seller or not
resistance to a home inspection
if an inspection is allowed, who is responsible for which repairs of hidden defects now disclosed, and how does it affect the binding nature of the original contract
what fixtures, window treatments, etc. stay and which go
what to do if upon occupancy, the agreed upon items are gone or the property has been damaged
who, when, where and how will the Closing be handled legally
which expenses pertaining to a Closing are paid by the Seller and which should be paid by the Buyer
how will already paid property taxes, HOA fees, etc. be apportioned
the undisclosed presence of a registered sex offender
etc.

These are just a few of the issues that arise over the course of a real estate purchase. I hope this has been helpful.

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Question: Can I still be represented by a Buyer's Agent even with an FSBO purchase?

Answer: Yes.

An FSBO Home Seller may not want to hire a listing agent to market a property if they feel - rightfully or wrongly - that they can handle it on their own (advertising, home staging, Open Houses, appointments, showings, contracts, etc.). But they will still cooperate with a Buyer's Agent, especially if the Home Buyer makes it clear to the Seller that this is a condition of sale.

This way, the FSBO saves the listing half of the commission, but still pays the buyer agent's commission so that the transaction can be handled professionally.

Ultimately, every Home Seller has the right to choose whether to be represented by a real estate agent or not, but my position remains that it's always better to have two real estate agents, one to represent each client.