How To Buy A For Sale By Owner (FSBO) In Real Estate

Kyle Hiscock

Kyle Hiscock | Greater Rochester NY Real Estate | Pittsford NY Realtor at RE/MAX Realty Group

Have questions about buying or selling a home?

Ask Now!

Tips For Buying A For Sale By Owner (FSBO) In Real Estate

How To Buy A For Sale By Owner (FSBO) In Real Estate

How To Buy A For Sale By Owner (FSBO) In Real Estate

Buying a home can be a fairly complex process.  There are more than a dozen steps to buying a house, when done properly.

The majority of home buyers take part in a “traditional” real estate transaction which includes themselves, the seller, the sellers real estate agent, and their own real estate agent.  It is possible however that a buyer may find a home that on the surface appears to be the perfect property.  The only difference being it’s not listed by a real estate agent, instead, it’s being sold by the owner.

Now what?

If you do any research about for sale by owners in real estate, which are often referred to as FSBOs, you’ll find lots of different opinions.

If you talk about a for sale by owner with a real estate broker, you’ll likely hear why FSBOs fail in real estate.  On the other hand, if you talk with someone who has sold their own home, you’ll likely hear why real estate brokers are unnecessary to sell a home.

This article isn’t being written to discuss why buying a FSBO can be risky, but instead, to help buyers learn how to buy a for sale by owner.

Read on to find out 6 important tips for buying a for sale by owner in real estate.  Following these tips can make buying a for sale by owner a success.

1.) Find Out If The Owner Is Willing To Cooperate With Buyers Agents

The number one reason why homeowners attempt to sell their own property is because they don’t feel there is a need for real estate agents.  By eliminating real estate agents from a transaction, a homeowner can save thousands of dollars in real estate commissions.

While there are certainly some for sale by owners who absolutely will not cooperate with real estate agents, there are many that will.  There are many reasons why having a buyers agent is important when buying a home.  Finding out if the owner is willing to at least cooperate with a buyers agent is the first step to buying a FSBO.

In the majority of traditional real estate transactions, the seller is responsible for paying real estate commissions.  If the owner isn’t willing to cooperate with real estate agents, it’s important to realize that there is still the possibility of having your own representation in the form of a buyers agent.

How is it possible for a buyer to have their own representation if the seller isn’t willing to pay commissions?  

The buyer would be responsible for compensating the buyers agent to represent their best interests, which is typically not a cost of buying a home in a traditional transaction in many states, but is often well worth the added expense.

2.) Secure A Mortgage Pre-Approval

Secure A Mortgage Pre-Approval When Buying A FSBO!

Secure A Mortgage Pre-Approval When Buying A FSBO!

The next step in the process of buying a for sale by owner is to secure your pre-approval.  Whether a buyer is pursuing a for sale by owner or not, securing a mortgage pre-approval is vital.

A mortgage pre-approval is important for a number of reasons, one of the most important being it’s a method of showing a homeowner that the likelihood of being approved for a loan is strong.  Without a mortgage pre-approval, a seller cannot make an educated decision as to whether or not the potential buyer has the ability to purchase their home.

As you’re deciding where to secure a mortgage pre-approval, being aware of the most common tips for choosing a mortgage company can be very helpful.  Each and every mortgage broker or lender will offer different mortgage products, rates, and charge different fees, so be sure to explore a few different options.

3.) Determine The Homes Market Value

If a for sale by owner has decided to not cooperate with a buyers agent and you’ve decided that you don’t want to or can’t afford to compensate a buyers agent, this step to buying a FSBO can seem quite foreign.  Most people don’t understand how to determine the market value of a home, but it’s an extremely important step simply because nobody wants to pay more for a home than it’s actually worth!

There are several methods to determining a homes market value, some methods are good and some are bad.  The most common method to accurately determining the market value of a home is called the comparative market analysis approach.

A comparative market analysis, commonly referred to as a CMA, is the comparison of a property to other similar homes sold in the recent past.  This method to determining a homes value is frequently used by real estate professionals when they’re coming up with a homes list price.

A CMA compares the subject property to at least 3 comparable sales within the past 12 months, ideally within the past 6 months.  If the subject property has additional features that the comparable sales didn’t have, an adjustment should be made in the value.  An adjustment should be made if a comparable sale has an additional feature the subject property doesn’t have.

In traditional real estate transactions, one of the things to expect from a real estate agent when buying a home is their advice on how much to offer for a property.  Again, if you do not have representation when buying a for sale by owner, you need to have an idea on how to determine the value of a home.

4.) Hire A Real Estate Attorney

When buying a for sale by owner without representation, it’s highly suggested you enlist the services of a real estate attorney.  If there isn’t a buyers agent watching out for your best interests, a real estate attorney is often the only ally you have in the transaction.

When buying a for sale by owner without representation, a real estate attorney will often help with writing an offer on the property.  The real estate purchase offer can be quite confusing, even for people who’ve purchase homes in the past.  An attorney can help you navigate through the contract to ensure the proper real estate contingencies are in place and that the timing is accurate.

In addition to helping write a purchase contract, an attorney can help safeguard against taking ownership of a home with poor title or a piece of real estate that has encroachments from the surrounding properties.  Even though these things are a common reason for a delayed real estate closing, it’s extremely important they’re corrected before taking ownership of the property.

5.) Complete Various Inspections

Do NOT Skip The Inspection Phase When Buying A FSBO!

Do NOT Skip The Inspection Phase When Buying A FSBO!

There are way more reasons why having inspections when buying a home is recommended.  One huge mistake made by home buyers, whether buying a for sale by owner or not, is skipping the inspection phase.

If you’re thinking about buying a for sale by owner without representation, completing various inspections is even more critical because you don’t have the extra set of eyes that a top buyers agent can provide.  The inspection phase is not only exclusive to a home inspection, but depending on the type of property, many different inspections may apply.

For example, one of the most important tips for buying a rural home is to evaluate the type of sewer system the property is hooked up to.  If the property has a septic system, the purchase contract should be subject to an inspection and cleaning of the septic system.

Other important inspections to consider making the purchase of a for sale by owner contingent upon include;

  • Radon test
  • Pest inspection
  • Chimney inspection
  • Well water test
  • Mold test


The bottom line is that skipping inspections is rarely a good idea and when buying a for sale by owner, it becomes an even worse idea.  There are few circumstances that result in a buyer skipping inspections.

One of the common reasons why a buyer may skip their inspections is because they’re buying a home in a sellers market and are competing against other buyers, but it certainly still doesn’t mean it’s recommended.

6.) Stay Focused Until Closing

One of the top home buying misconceptions is that after the inspections are completed that the transaction is almost completed and the “hard work” is completed.  Once the inspections are completed, there are actually some important things to stay focused on until closing.

After inspections, one of the next steps (and an important step) is to obtain the formal written mortgage commitment.  This means that you’ll be formally applying for the mortgage, paying for a bank appraisal, and submitting important documents to the mortgage broker or lender as requested.  It’s vital that as the broker or lender is requesting documents, you’re submitting them in a timely fashion.

In addition to the formal written mortgage commitment, there are other tasks that you need to remain focused on until closing, such as shopping for homeowners insurance.  Buyers who lose focus after completing inspections often will create a delay in their closing or even worse, can make mistakes that result in a real estate deal falling through.

Final Thoughts

Buying a home, in general, can be pretty complex and tricky at times.  If you’re considering the purchase of a for sale by owner, it’s important that you realize there may be added responsibilities you wouldn’t have in a traditional real estate transaction.

Again, buying a for sale by owner can be done, however, there are many reasons why the majority of FSBOs fail.  Following the above tips for buying a for sale by owner will definitely improve the chances of a successful purchase and also help you set realistic expectations.

Other Home Buying Resources

Are you thinking about buying a FSBO in Rochester NY?  The above tips for buying a FSBO could be the reason why the purchase if successful or not.  If you don’t have a Rochester real estate agent and are thinking about buying a FSBO, contact me and we can discuss the specific property in detail.  In the past, I’ve helped several Rochester home buyers purchase for sale by owner properties and know how to delicately approach the owners.

Subscribe To Our Blog (it’s FREE) & You’ll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner

About the authors: The above article “How To Buy A For Sale By Owner (FSBO) In Real Estate” was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.

We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.

Have questions about real estate? I'm here to help.

Get In Touch

Contact Me!

Thinking About Making A Move In 2024?
Let's Chat!