What to know when buying FSBO

REThink Real Estate

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jun. 30, 2011

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And finally, if you are buying a FSBO property with cash, as the nonpublished portion of your email leads me to believe you might want to do, it can be especially easy to forgo many of the protections that a real estate broker or mortgage lender would have required in a standard transaction, like obtaining the inspections you need, running a title search to ensure title is clear and obtaining a title insurance policy, or having the home appraised.

None of these concerns I've mentioned are reasons to absolutely avoid a FSBO sale. But they are very good reasons to avoid buying a FSBO property without your own broker or attorney representation.

I'd strongly encourage any buyer considering purchasing a home that is being sold by owner to get their own broker and/or attorney. Try to negotiate for the seller to pay for it -- but if they won't, it's worth the cash to pay for it yourself and make sure the transaction is executed in such a manner that your interests are protected.

And just for your information, there are also buyer's brokers who shy away from representing even the buyer in these FSBO transactions.

They feel -- rightly so, in many cases -- that to represent their client properly, they essentially have to do double work advising the seller of their obligations and duties to the buyer the same way a listing agent would ordinarily do. Given that many of these sellers are somewhat unrealistic or otherwise difficult, doing twice the work for half the pay is an unattractive option.

But many other brokers and attorneys will represent your interests in a transaction where the home is being sold FSBO, despite the extra trouble. If you go that route, find one!

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Contact Tara-Nicholle Nelson:
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