FSBO's tricky for buyers, too

Much has been said about the dangers of for-sale-by-owner (FSBO) transactions for home sellers – but there are also many dangers inherent in such transactions for the buyers.

So says Berry Everitt, MD of the Chas Everitt International property group, who notes that a "direct" property purchase, where there is no agent's commission involved, may seem like a good idea to the buyer – especially if the seller is a friend or family member.

"But in a FSBO sale, it is unlikely that the property will have been subjected to open marketing, so the "attractive", commission-free price may, in fact, be way out of line with current selling price trends in the neighbourhood.

"And this could make it difficult for the buyer to realise any profit on resale for a very long time."

Writing in the Property Signposts newsletter, Everitt says the only way that a price can be properly tested is by putting the property on the market in competition with similar homes in the same area, on the same terms.

"So even when a direct sale appears to make good sense, for example a sale to a close relative or a sitting tenant, it is good practice for the buyer to seek independent advice about the value from an estate agent with a thorough knowledge of the local market.

"A commission or a fee paid to an agent for this service is a small price to pay for peace of mind – or to avoid a family feud over the price Cousin John paid for Great Aunt Mathilda's cottage."