FOR SALE BY OWNER FAQs
WHAT DOES FSBO STAND FOR?
We have all heard the term before, but what does it mean? FSBO stands “for sale by owner.” This is a property sale where a property owner has elected not to engage the services of a realtor to list the property they wish to sell or to negotiate the sale. The buyer may or may not have a realtor involved to assist them with the transaction.
WHY WOULD SOMEONE WANT TO SELL A HOUSE WITHOUT INVOLVING A REALTOR?
There are a variety of reasons that a seller would elect to forego using a realtor in a FSBO transaction. For example the sale may be a related party transaction where the buyer and seller know or are related to each other. We have also handled transactions where tenants are buying from their landlord and are familiar with the property being purchased. In these settings the parties have usually come to terms on the structure of the transaction and just need the details to be properly memorialized.
WHO HANDLES THE PAPERWORK IN AN FSBO?
The law firm handles the paperwork. For example, Heise & Heise, LLP maintains a library of contracts and addendums and can handle any paperwork needed to place a valid and binding contract on a property. The library is updated regularly so that as Maryland law changes annually so are our forms. In some scenarios we have crafted special addendums to cover unique situations that are uncommon in the world of real estate.
WHAT IF I NEED A RECOMMENDATION FOR A SERVICE PROVIDER?
During the FSBO sale, you may have need of a service provider. We have assembled a list of the following service providers that have been carefully selected based on their customer service, cost and reputation in the industry.
- Home Inspectors
- Settlement / Title Companies
WHAT ARE THE DISADVANTAGES & ADVANTAGES OF AN FSBO SALE?
If you search online, the most commonly-stated drawbacks to an FSBO are the limited exposure to the marketplace and the possibility of realizing less than full market value on a sale. We are able to overcome these obstacles by working with you to get your property listed with a multiple listing service (MLS) for maximum exposure. Additionally, we are able to connect you with a Maryland licensed appraiser so that you can ensure that you are pricing your house properly.
The most significant advantage of a FSBO is that a seller and buyer may be able to reduce expenses as a result of the nature of the transaction. Oftentimes, a seller may be willing to pass along a portion of what is saved on commission to a buyer in the form of a credit. This is a true win-win situation for all parties concerned. If you are questioning whether a FSBO is the right structure for you or have further questions about this type of transaction, do not hesitate to give us a call. We are here to help or point you in the right direction.