When you’re shopping for a home, you might encounter certain homes listed as FSBO. Short for “for sale by owner,” these are properties that homeowners are selling on their own, typically to save money that traditionally goes toward a real estate agent’s commission.
But what happens if you, the buyer, are working with a real estate agent—does that mean FSBO homes are off limits? Not necessarily.
Here’s what you need to know about buying an FSBO with a real estate agent.
Can you buy a FSBO home with a real estate agent?
First, you have to consider where you are in the homebuying process. If you’ve just begun to talk to agents, then you aren’t legally or ethically bound to use a specific buyer’s agent, or any buyer’s agent for that matter.
If, however, you’ve already signed a buyer’s agent agreement, that’s a different story. This agreement commits you to work exclusively with that agent for a set period of time. It’s usually six months, but you’ll want to check to see how long yours is, as you’re legally bound to working with that agent on any home purchase made within that time frame.
If you’re not happy with the agent, you can ask to cancel the contract, but that should be done only if the agent has acted unprofessionally or you’re otherwise unsatisfied with the agent’s work—not because you want to buy a FSBO on your own.
How a buyer’s agent can help you with a FSBO
As we mentioned, sellers typically list their properties as FSBO to save the money they would pay toward commission. While the commission varies, this fee typically gets split between the buyer’s and seller’s agents.
Homebuyers, however, don’t pay any commission at all. As such, you have nothing to lose (and often much to gain) by using a real estate agent, often called a buyer’s agent, when purchasing a home.
“A buyer’s agent is there to protect only your best interest, and if you found a home that is for sale by owner, all the more need for you to have protection,” says Renee Porsia, a real estate agent with Re/Max Action Realty in Maple Glenn, PA.
“That owner will want and expect you to pay top dollar for their home. Do not think that the owner will be doing you any favors,” adds Porsia.
The catch, of course, is that using a buyer’s agent means the agent will expect to be paid for his hard work, and a FSBO seller—who’s responsible for paying the agent—may not want to part with this cash.
How to buy a FSBO property with a real estate agent
To move forward with purchasing a FSBO property, you should ask your real estate agent to contact and ask the seller to sign a fee agreement. Be warned, there will be owners who don’t want to pay fees to any real estate agent, but many will be willing to pay at least the buyer’s agent’s fees since the agent is bringing the buyers and helping with the process.
Since a seller typically pays the fees of both the listing agent and the buyer’s agent, paying only one agent is often acceptable to those who list FSBO properties.
Heather Richman, a real estate agent with Century 21 Prestige Realty in Cedar City, UT, says most sellers don’t object to paying a buyer’s agent’s fees.
“Owners selling their own property are likely doing so to save the money they would have to pay a brokerage, which includes both the listing side and the selling side,” Richman says. “However, many realize they may need to pay a buyer’s agent. They are still saving the listing agent fee. Your agent can talk to the seller and ask if they are willing to pay their commission.”
Deb Dawkins, a real estate agent with Coldwell Banker Chesapeake Real Estate in Easton, MD, agrees.
“Many private sellers are willing to cooperate with buyer’s agents,” she says. In fact, sellers may see it as a benefit.
“They know the paperwork will be handled correctly and that the buyers have been properly qualified to make the purchase,” adds Dawkins.
If the seller isn’t willing to pay your agent’s fees, then you may have to pay the agent’s commission if you really want the property.
“But you can do so with the assurance that he or she is working for you and that the deal will be constructed with your best interests as the foundation,” Dawkins says.
Richman says if neither of those scenarios works, ask your agent for some suggestions.
In the end, no matter how a home is listed, an experienced real estate agent can help you through the process. FSBO properties may involve some slightly different steps, but they don’t have to be ruled out because you have an agent.