With limited inventory, buyers and their agents are scrambling to find homes for sale.
Homes listed "by owner" are a tempting option, but are they really a great choice for home buyers?
BY OWNER - THE WHO AND WHY
To begin, the purpose of this post isn't to be negative about those who sell by owner. It is their right to do so and we respect that. I will, however, be honest about what it means to my buyer clients should they entertain buying a home listed by the owner.
Let's start with the basics:
Someone who tries to sell their home without using an agent is termed a "FSBO ( pronounced Fizbo ) - For Sale By Owner". Instead of hiring an agent, the owners are representing themselves.
There are a few reasons why someone would want to sell by owner. The main reason is to save money. Another reason is that some folks are a little controlling and prefer to things themselves.
With the popularity of the internet, homes sold "by owner" get decent exposure on popular sites like Zillow. Therefore, it is not unusual for a buyer to see these homes while doing an on line search. Therefore, we make a point to discuss these homes with our clients up front so they know what they are getting into.
A GOOD OPTION FOR BUYERS?
The problem is that most "by owners" are not overly motivated. Many are just testing the market and will only sell if they get their desired price, which is often higher than market value. The buyers have very little leverage working with an unmotivated seller.
This situation leads to one where a buyer will likely have to overpay for a home. Basically, if they fall in love with a home listed"by owner", they will have to pay "retail" instead of "wholesale".
Another aspect of buying "by owner" is the process itself. Since most sellers lack experience selling a home, a complex transaction can get even more difficult. Buyers need to consider if it's worth overpaying and jumping through hoops for the right home.
THE FINAL WORD
Whether buying a home listed "by owner" is a good or bad option is up to the consumer to decide. Almost all of our clients who have purchased directly through the owner have admitted to overpaying. However, they justified doing so because they fell in love with the home.
In the end, I would tread cautiously with "by owners." There is certainly nothing wrong with looking at all your options, just make sure you have realistic expectations of the possible end result.
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