Do I Really Need a REALTOR® if I'm Buying FSBO

On your house hunting journey, you may run across a home that is listed “FSBO.” In real estate, this stands for “for sale by owner,” which means the homeowner is selling the home on their own — without the help of a REALTOR®.

This may have you thinking, “If they can do it on their own, so can I.” And if you have loads of experience, you might just pull it off. However, in this industry no two transactions are the same, and the FSBO process adds another layer of complexity.

So, if you find yourself interested in a FSBO property, here are some important things to consider.

Why would a seller choose FSBO?
Before we get into things from a buyer’s perspective, let’s talk about why a homeowner may choose the FSBO route. Most often, it’s because they believe they’ll save money, particularly when it comes to REALTOR® fees. However, in its 2018 Profile of Home Buyers and Sellers, the National Association of REALTORS® (NAR) found that 87 percent of buyers purchased their home through an agent or broker. So, while a FSBO seller won’t pay seller’s agent fees, they’ll likely still pay fees for the buyer’s agent.

In addition to commission, there is also a misconception that a FSBO seller can get more for their home. But, looking back at NAR’s 2018 survey, FSBO homes actually sold at a median of $200,000, significantly lower than the median of agent-assisted homes at $264,900.

This isn’t to say that a seller can’t have a good FSBO experience. In fact, NAR reports that 72 percent of successful FSBO sellers who knew the buyer were very satisfied with the process. The problem is that real estate is a tricky business, and when dealing with an investment this large, it’s risky for sellers — and buyers — to go it alone.

Why do I need a REALTOR® when buying FSBO?
In a FSBO situation, the seller obviously doesn’t want to hire a listing agent, but that doesn’t mean you can’t hire a buyer’s agent. In fact, you can — and should — have professional representation, someone who “has your back” and is looking out for your best interests.

REALTOR® Amy Sweet with RE/MAX Real Estate Professionals says the biggest advantage of having an agent working on your behalf is having access to their industry experience.

“There is a lot of information online, and anyone can get tips and advice on how to navigate a real estate transaction, but in an ever-changing industry in which each transaction is unique, that professional experience is invaluable,” she said.

Among his/her many professional responsibilities, an agent will confirm whether a home’s price is reasonable, help you put together a strong and convincing offer, navigate the home inspection and negotiate potential repairs or credits, and walk you through the dozens of forms, reports, disclosures, and other technical and legal documents. That last part is critical because in the world of real estate there are loopholes and fancy lingo that can be confusing for someone who is not well-versed in the industry.

And remember, rules and regulations are constantly changing and they vary from city to city and county to county. Sweet has been in the business for 15 years and says even she is continually learning.

“We do this every day and still run into unique and challenging situations,” she said. “The benefit is that in addition to our own experience, we have a network of professionals to lean on...fellow agents, brokers, lenders, inspectors, appraisers, contractors, etc. Whatever problem comes up, we have the knowledge, relationships, and skills to help keep a deal together.”

Perhaps one of the most important things to consider is that when you choose a REALTOR®, you are working with someone who operates according to a strict code of ethics. The NAR Code of Ethics has been in place for more than 100 years and ensures that consumers are treated professionally and ethically during all stages of the transaction.

“This process is more complex than most people realize, and buyers and sellers sometimes get caught up in the small savings and don’t look at the bigger picture,” said Sweet. “Buying or selling a home is a major financial — and emotional — undertaking, and with an investment this large it really pays to have a professional on your side.”

For a list of experienced, local REALTORS® visit the Greater Lansing Association of REALTORS® website at www.lansing-realestate.com.