(800) 713-0463
"Providing Service Nationwide!"

Pros and Cons of Buying a “For Sale By Owner” House

Sellers typically decide to sell their house without the help of a real estate agent because they want to save the commission price (generally 6 percent), and because they feel like they know more about their property than a busy agent might. There are pros and cons to purchasing a house from its owner.

The owners typically have less negotiating experience than an agent, so they’re more likely to accept a low offer that’s below the asking price. The absence of an agent also means you can get a bit more creative with your negotiations, like bargaining over the appliances or lawn equipment.

Another bonus in buying from the owner is that they are more knowledgeable about the neighborhood. They have details about the neighbors and about what daily life in the neighborhood is really like. While an agent might be an “expert” in the neighborhood, they can’t know more than someone who lives there.

Owners selling their home are law-bound to disclose any information about the property that might influence your decision to buy. They’ll tell you about needed repairs and other necessary information.

The main con of buying from the owner is that you have to deal with the owner! There’s no buffer between you and the owner of the property. They might be more sensitive to critiques of the house, and they might take personal offense to a low offer. Since they’re not using a realtor because of cost (usually), they might actually be less willing to negotiate on price.

While owners are required to disclose important information about a property, that doesn’t mean they will. Dishonest owners might purposefully hide information about a home- they might even be avoiding an agent so those issues won’t be disclosed. When you make an offer on a For Sale By Owner Home, always make it contingent upon a home inspection. Otherwise, it can be difficult to settle a problem with a seller who has moved to another country or won’t answer your phone calls.

You also lose out on the expertise of an agent, and their ability to streamline the process. You’ll need to find your own home inspectors and titling companies. You’ll need to be willing to do all the legwork and find out what paperwork you need by yourself. And while you might think that the owner will pass on the savings they get by not using a realtor, in reality, they’ll likely keep it. The asking price usually won’t be lowered just because there’s no agency involved.

Another thing to keep in mind is that without an agent, you might miss certain red flags about the property that someone with experience wouldn’t miss. You might just see a cute fixer-upper, while an agent would notice problems with the foundation or other issues.