How to buy a FSBO (For Sale by Owner) home

FSBOs are not like rabbits
FSBOs are not like rabbits
Although I never get involved with FSBOs, I encourage my buyers to explore any For Sale by Owner they see and report back to me what they learn.

How FSBOs are not like rabbits

FSBO homes are right out in the open, but hard to see.

I have a dog. When we go for walks around the neighbourhood or through Waterloo Park, she is really really good at spotting rabbits. She doesn’t seem to see squirrels, ground hogs, birds or other small animals, just rabbits. She will stop and then slowly, slowly try to sneak up on them. The rabbits of course see her and sometimes mostly ignore her until she gets too close and then they run into the bushes. 

I’m the same way, but with real estate signs. I spot them when driving through neighbourhoods and I can usually take in the name of the brokerage and the agent. At the same time, like my dog and her views on small rodents, I do not see yard sale signs, contractor signs for a new roof or fence or For Sale by Owner (FSBO) signs. They are just not a regular part of my everyday world and I look right past them.

The world without FSBOs

Some people in the general public think that real estate agents are threatened by FSBO franchises. I don’t think we are. I think we mostly just ignore them. We don’t see them. They are not part of our world. There has always been a small percentage of the population (somewhere between 5% and 15% depending on which statistics you believe) that will try to sell their home without an agent. I think that’s great. I’m all for free enterprise. And when I’m working with buyers, although I never get involved with FSBOs myself, I encourage them to explore any For Sale by Owner they see and report back to me what they learn.

Here are some of the things I’ve learned

What I have learned about buying a FSBO


Private sellers tend to price their homes too high. Either because of their built in emotional bias, overvaluing updates to the home (the IKEA effect) or maybe because they subconsciously give themselves too much room to negotiate, FISBO homes are often priced too high. I would think as an outsider looking in that since they are trying to save a 4% commission, that their listing would be lower, not higher. 

Researching the FSBO

The best place to have many of your questions about the sellers, the neighbourhood and the home itself answered is online — google, LinkedIn, Facebook, municipal site for zoning and planning, school boards… Research all you can. Do not rely on what the home sellers tell you. 

Also, if you do have long conversations with the sellers about things, I suggest putting it all down in an email and asking the seller in writing if your understanding is correct. In court, you never want to get into a “he said, she said” argument without written proof. 

FSBO Disclosures

The old adage “buyer beware” does not apply to real estate transactions. Most private home sellers and buyers do not know this. If you are buying a FSBO home, be sure to have your lawyer draw up a property disclosure form for the sellers to sign. 


Do not rely on the inspection report supplied by the seller. Spend the $400. It could save you a lot more than that. 

Also, since you are dealing directly with the seller, don’t be afraid to offend them by suggesting you will need to do an inspection. Remember yours is a transactional relationship. You might be friendly, but let’s put business first.  


Your lender is most likely to want to appraise the home before granting you your pre-approved mortgage. Let’s face it, banks are conservative and a mortgage is their money not yours. They will certainly want to ensure that you didn’t pay too  much. 


Negotiations between private home sellers and buyers is very different from those of professional realtors. With us we like to negotiate as few things as possible. The big things of course are 

  • Price
  • Closing date
  • Conditions (home inspection and mortgage financing)

I’ve heard private sellers and buyers 

  • Negotiating used furniture, 
  • Having the condition of selling an RV, 
  • Paying other party’s lawyer fees and closing costs,  
  • And vague verbal or poorly worded language to repair and replace floors, roofs or other components of a home. 


So I think you can see that trading in real estate privately is a little bit more work but not impossible. I think it is safe to say that there will be a lot learned by both sides. 

Further reading:

My other posts on FSBOs

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