by Phoenix attorney Christopher A. Combs, partner with Combs Law Group, P.C.
In a Glendale neighborhood, we found a home perfect for us. The home was “for sale by owner,” and we are having a difficult time negotiating with the seller. We still do not have a purchase contract. Although my wife wants to buy because she likes the home, and we can save on commissions, I am discouraged. I am thinking about hiring a buyer’s agent to look for another home for us. Does the advantage of saving real estate commissions outweigh the disadvantages in dealing with a “for sale by owner” property?
Ideally, in the sale of a “for sale by owner” or FSBO property, the seller and buyer will save money by not paying real estate commissions, and the transaction will close smoothly. Really, the typical seller of a FSBO is inexperienced in real property transactions and uninformed about the value of the property, so negotiations by a buyer with a FSBO owner are normally difficult. A major advantage of a real estate agent is that the agent can serve as an intermediary and ease the negotiating process. If you sign a purchase contract for this FSBO home, at a minimum you must require that the purchase be contingent on a new loan, and on an inspection by a professional inspection service.
The above is for informational purposes only and is not intended as definitive legal or tax advice. You should not act upon this information without seeking independent legal counsel. If you desire legal, tax or other professional advice, please contact your attorney, tax advisor or other professional consultant. Reprinted with permission. Copyright 2007, all rights reserved.