Consumer publications talk about why it's a smart idea for owners to sell their own homes. These sellers are referred to as For Sale by Owners (FSBO). What's hardly mentioned is what the other side (the buyer, customer, prospective homeowner) experiences so the seller can save a few bucks (usually at the buyer's expense.)

There's a whole laundry list of tasks that need to be addressed by one or the other party in a real estate transaction. Do you know what they are? Are you prepared to play the guessing game with a home purchase, which is likely the biggest purchase most people make in their lives? It sounds pretty risky, doesn't it?

What about personality conflicts?

You never know what you're getting yourself into when you start the process of buying a home from a complete stranger. When you work with a Realtor at least you can choose someone to act as your filter. The Realtor will work on your behalf, regardless of personality traits on the other side. Buying a FSBO means you might just have to deal with individuals who aren't on your same wavelength. That can derail your purchase, even for a home you just love.

Who is doing the negotiations?

Unless you are a pro, negotiating for price and contingencies is a frustrating and unfulfilling task for any buyer. Plus, many buyers are unaware of certain things to ask for, what to expect and how to gauge the seller's mood, capability or motivators. You should also know what form to use when making the initial offer and counter offer. Almost every sale involves a counter offer, so gather the information you're going to need to know now, because counter offers generally have time limits.

Whose contract are you going to use?

Do you have your own attorney who can draw up your offer, or are you going to rely on using the seller's contract? The seller's contract is going to favor the seller. Your attorney is going to charge you to prepare the contract and any consultation time it requires.

Are you getting a deal?

FSBOs typically don't know how to set price. If you're not aware of market trends, the number of competing properties, current listing features and pricing, changes in mortgage rates and a multitude of other pricing influences, you might not be in the best position to judge the value of your intended purchase.

One of my first buyer prospects, prior to working with me, had found a FSBO that would not pay a fee for having a Realtor involved in the sale. At that point I had to back away from the transaction (to the horror of my prospect.) I continued to check in with the buyer during her negotiations. Each time we spoke, she expressed more and more frustration with the process. The negotiations took three times as long as she expected and caused considerable heartaches, at one point the she called me in tears. She got the property and overpaid by $25,000. To this day, I don't think she even knows it. It will become apparent when she goes to sell that investment property and discovers her profit isn't what was expected.

Do you have an established professional network?

To purchase an FSBO, your network should include a good attorney, title company, mortgage lender, pest inspector, home inspection service and a few others that may be called upon depending on the situation. Most buyers have to let their fingers do the walking and rely on instinct to quickly determine who to work with and which out of a pool of individuals represents the best choice. Your Realtor already knows the best of the best in each category. Working with a Realtor means you'll never need to consult an attorney who will bill you, not the seller.

Avoid using the seller's inspection network. The service providers will be working on the seller's behalf, not yours.

How do you manage problems?

There are a multitude of challenges that will crop up during the transaction. It could be there's a problem with termites, a water leak, the appraisal came in under the sale's price, or the seller goes on vacation in the middle of your purchase. What is your course of action? If you aren't prepared for any and all contingencies, you might be inclined to let it go. This is not a good idea, and in the long term, you'll end up paying the cost of these contingencies, not the seller.

Are you still interested in buying an FSBO? Then contact Linda for her 9 point checklist of how to prepare yourself to buy a FSBO.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Owner Financing: The Key to Selling Your Home Fast in Good or Bad Markets (Part 1)
Owner financing is a strategy that is rarely used. Sales agents won't tell you much about it. If they do, they will loose listings because with owner financing, no sales agent is needed. The government says that only 15% of home sellers use owner financing sales strategies. The rest are at the ... more...

Owner Financing Will Sell Your Property In Good Or Bad Markets
Like many For Sale by Owners and Business Owners who think they know all the options available to them when ready to sell their property, there is one method that gets overlooked far too often. Are you one of many stuck in a rut with outdated thinking when it comes to selling your property? Let me ... more...

California Home Equity Sales Contract Act - A Mine Field for the Unprepared!
When I first got started in the real estate investing business in 2006, the avalanche of foreclosures was just beginning. Before attempting my first short sale here in Southern California, I discovered I needed to comply with Civil Code Section 1695 by using a very particular type of purchase and ... more...

You've Got A Contract And Sold Your Home
Beware The Hidden Pitfalls That Could Easily Derail The Sale Of Your Home Before You Reach The Closing Table It is a joy to see a seller's reaction when they first receive an acceptable offer on their home. You can almost hear the gears turning as they mentally plan their next move in a matter of ... more...