Why Buy "For Sale by Owner"?

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1.  You'll save money.

Real estate agents typically charge a commission equal to 5-6% of the sales price of a home, which is usually split between the seller's agent and the buyer's agent. That comes to $30,000-$36,000 for a $600,000 home. Since "For Sale by Owner" (FSBO) sellers avoid paying some or all of that commission, they often price their homes lower--so buyers can share the savings.

2.  You can get as much--or as little--help as you want.

Traditional real estate agents are usually happy to help people buy FSBO homes, since many sellers offer them commissions for finding and assisting buyers. These commissions normally range between $15,000 and $18,000 for a $600,000 home.

But one of the advantages of buying a FSBO home is that you can often capture much of that commission for yourself simply by finding and visiting the home on your own. For tips on how to buy a FSBO home without the help of a traditional agent, see the section to the right on How to Buy a FSBO Home.

 

  

How much help do you want when buying a home?


"Our agent showed us lots of properties, including a gorgeous FSBO home. She then helped us negotiate and do all the paperwork. When the deal closed, she got a commission of $18,000 from the seller for her services."
 
"I searched online and found the perfect home. Since it was a FSBO, I was able to see it without an agent. A discount broker helped me prepare an offer and close escrow. The sellers paid him an $18,000 commission for serving as the buyer's agent, but he gave me a $12,000 rebate since I'd found the home on my own. I used the money as part of my down payment."

"We found a FSBO home that was just right for us. We wrote an offer using some forms we got off the Internet. Since we made an offer without an agent, the sellers gave us a 3% discount, which came to about $18,000."
 

 

 

 
 

How to Buy a FSBO Home

If the seller is "cooperating with" (offering a commission to) buyers' agents:

If you want to work with a full-service real estate agent, ask him or her to show you the home. If you decide to make an offer, your agent will help you prepare the forms.

You can save lots of money, though, if you visit a FSBO home without an agent. This is easy to do--just go to the home during an open house or contact the seller to schedule an appointment.

If you want help with the negotiations and paperwork, you can make an offer through a discount broker (like SixHomes.com) or real estate attorney. Many will assist you for a small share of the buyer's agent's commission and rebate the balance of it back to you.

If you want to prepare your own offer, you can download standard real estate contracts from websites like Nupplegal.com. Since you'll be saving the seller the expense of paying the buyer's agent's commission, you should lower your offer price accordingly.

If the seller isn't cooperating with buyers' agents:

If you want help with the paperwork, hire a discount broker, agent, or lawyer to help you make an offer and close escrow. Since you--not the seller--will be paying for these services, you should adjust your offer price accordingly.

Online Resources

Search for homes at FSBOSonoma.com, FSBOSolano.com, FSBOAlameda.com, FSBOContraCosta.com, FSBONapa.com, FSBOSantaClara.com, FSBOSanMateo.com, FSBOSac.com, or FSBOSanFran.com.

Go to ELoan.com or Amerisave.com to see how much house you can afford and to get pre-qualified or pre-approved for a loan.

Get free online appraisals at Zillow.com and RealEstateABC.com, or pay ElectronicAppraiser.com for a more complete report.

Visit FSBOPrimer.com or 1Listing.com for more advice on buying FSBO properties.

Our sister company SixHomes.com offers buyers full-service representation for just 1% of the sales price.  The rest is credited back to the buyer at close of escrow.

Go to Nupplegal.com for blank real estate contracts.