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KNOW YOUR DEALS
FSBO – For Sale By Owner
R. BALAJI
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This column will explain the jargon and real estate nuances that need to be understood in property transactions.
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FSBO or ‘For Sale by Owner’ most often refers to real estate for sale. FSBO is a real estate offering handled directly by the seller, which does not involve a real estate agent, but allows homeowners to take control of the sale process.
The most important reason to choose FSBO is to save real estate agent fee and to bring in some kind of a control in the process.
Direct sale isn’t a rarity although it too few due to lack of support and knowledge about the entire process. This is a common and popular concept in the U.S., slowly catching on in other parts of the world. Currently, only 20 per cent of transactions in our country are FSBO, but the scope is vast.
In India, although the real estate agent’s role is still prominent in property dealings, people do want to directly interact with clients.
Most of the FSBO transactions pertain to residential properties.
It allows direct contact with the buyer and saves the agent commissions.
The homeowner opts for different ways to advertise his property - signboards, web listings, newspaper classified ads, flyers, word of mouth, and open houses – but the money spent on working with realtors is eliminated.
FSBO sellers can now reach their global clientele through the Internet.
Why is FSBO the best option?
* Owner knows his house better than anyone.
* Owner can highlight the advantages and discuss its faults and surroundings.
* Owner also knows his financial expectations.
How does FSBO help the seller?
Money paid as commission is saved; Seller decides about the advertising; Seller determines the price after selecting the buyer; Property negotiations are by mutual understanding of seller-buyer, hence saves time; Stronger negotiation position; Lessen dependency upon agents.
What FSBO seller should know?
FSBO seller has to pass through the three stages,
* Preparing house for sale; Marketing and showing your property; Negotiating and closing.
To perform these activities, sellers need to understand at least the basics of the real estate market laws and tendencies.
How does FSBO help buyer?
* Direct interaction with seller eliminates cost on mediator, makes discussing and negotiating an easier flow; No dependency on agents and brings transparency.
* FSBO buyer should know that FSBO seller is not a professional; hence he should also be well informed about the processes.
Not going through a professional means he should know some basic real estate nuances…current market rates, status of property, its worth and resale value.
(The author is the CEO, Propmart, a real estate solutions provider)
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