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The 3 Main Reasons Home Buyers Should Avoid For Sale by Owner Properties

Only about 8% of the 5.3 million homes sold in 2019 were listed for sale by owner properties. There is a good reason that number is and has always been quite low relative to the number of real estate deals each year.

The disadvantages of for sale by owner (FSBO) deals are plentiful for both the seller and the buyer. Those for the buyer, though, can be reason enough to avoid FSBO listings in your home search.

Here are 3 good reasons to avoid FSBO deals when you’re buying your new home.

  1. Price

People tend to value the things they own far too highly. In psychology, the phenomenon is known as the endowment effect or ownership bias and has bad implications for real estate.

One of the first tasks a realtor does for any potential seller is to help price the home. Through comparables research and a deep understanding of market factors, an expert realtor, like those at, can nail that perfect price point that is fair and profitable.

When a homeowner tries to price their own house for sale, they lack the experience and knowledge it takes to do it correctly. Buying a for sale by owner home can mean you end up falling victim to the endowment effect and paying too much.

Your mortgage lender will do an appraisal of any home you hope to purchase before signing off on the loan. If the price was set high enough, you might even be denied the loan and lose a chance at buying the home.

  1. Scams Abound

The world is full of scam artists trying to game the system to make an easy buck. It has become big business. Phone scams alone brought in nearly $20 billion in 2020.

It’s no surprise, then, that scammers have found their way into real estate. Often these scams involve false buyers, but there are plenty of false seller scams, as well.

If you have found a home that looks too good to be true and that seller refuses to work with a real estate agent, that should trigger a red flag. While there are plenty of well-intentioned FSBO sellers out there, you never know if yours is one of them.

The easy way to avoid an FSBO scam is to avoid FSBO homes or unlisted houses for sale in the first place.

  1. Point of Contact

Real estate deals are tricky. There is a lot of paperwork, both legal and financial, and all of it comes with fine print. Third-party lenders, inspectors, and title attorneys will be involved along the way, as well. Any one of these people or any stage in a sale can derail the entire process.

When things don’t go exactly according to plan in your deal, you will have to work with the seller to reset the course. If that seller is the homeowner rather than a real estate professional, it can get hairy.

That homeowner likely doesn’t understand the ins and outs of the deal like an agent would. That lack of knowledge and experience means they may not be prepared to solve problems as they arise. When problems persist, deals are drawn out or fall apart altogether.

When agents are involved, many of those issues are avoided or solved without you even knowing about them.

For Sale By Owner Properties Aren’t All Bad

If you have found the perfect home and it happens to be one of the for sale by owner properties in your area, that doesn’t mean you can’t buy. Just make sure you find a real estate agent with experience with FSBO deals to help make the process as smooth as possible.

For more real estate news and advice, browse our blog now.


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About the Author

Kaya Wittenburg

Blog Author and CEO

Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.

He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.

Feel free to call me at: (305) 357-0635
or contact via email: