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In this down real estate market (and even during normal times), many people in the greater Plymouth, Northville, Novi, Canton, Michigan market have at one time or another looked at or have thought about buying a “FSBO” (“for sale by owner”) home. We certainly understand a seller’s motivation for selling this way and a buyer’s interest in potentially buying this way.

Here are some things you should look out for if you ever find yourself considering the purchase of a FSBO home in the Plymouth, Northville, Novi, Canton, Michigan area real estate market:

• No disclosures – Michigan law REQUIRES that every purchaser review AND SIGN the Seller’s Disclosure Statement, the Lead Based Paint Disclosure Statement and the Disclosure Regarding Real Estate Agency Relationships. Many FSBO sellers are completely unaware of these laws and unknowingly violate them.

• “Spotless” disclosures – When you’re in the business of real estate, you learn quickly that NO HOME is perfect. Every home – from the one built in 1800 to the one that finished construction today – has faults and flaws. When we represent purchasers, we always tell them to avoid the home that has perfectly clean disclosures, because 90% of the time, this means that the seller is simply not being honest. And you do NOT want to deal with a dishonest seller!

• No one at the steering wheel – Most people think that a Realtor’s job is to bring buyer and seller together. And this is true. What people DON’T understand is how much time is spent shepherding the transaction from the point at which a contract is signed all the way through the closing. The first part – connecting buyer and seller – is the EASY part. The second part – finishing the deal successfully – is actually the hard part. With a FSBO seller, you never really know whether the person driving the transaction knows where they are going!

• Limited knowledge of contracts – All real estate contracts are NOT created equally. Most FSBO sellers have a contract they want you to use, and most have little understanding of what it is that they are asking you to sign. Be very careful on this point!

• Limited knowledge of real estate protocol – This is the big one. The main thing that an experienced Realtor brings to a real estate transaction is simply that: experience. There is SO MUCH MORE that goes into a real estate transaction than most people realize. As a result, a lot of different things can go wrong, and these issues – both big and small – happen quite frequently…and a lot more than most people realize. On almost every deal, there’s something strange or unique that happens, and it almost always last minute. Most FSBO sellers have little or no experience in recognizing and resolving such matters.

Also, one final thing many people don’t know about FSBOs is that MOST FSBO sellers are more than happy to pay a real estate commission to the agent that brings a buyer for their home. They usually bake that into their pricing from the start. So, you should consider being represented by a real estate professional, even if you are buying a FSBO home or condo. Including such a professional will probably cost you nothing, and could save you a lot!