Buying FSBO real estate, or houses for sale by owner has its own particular problems and opportunities. Doing business with an unfamiliar seller who believed he understand enough to handle the whole thing by himself can be annoying; however, it can likewise be very lucrative if you are ready. First, you need to know the FSBO seller.

Individuals try to sell a property themselves for one main purpose: To save the sales commission. Unfortunately for them, they usually underestimate the cost and complexity of going it alone. They'll often get frustrated and tired of the process, and be ready to drop the price and be done with it. If you help them solve their problems, your reward can be a good price for a good investment. Just keep the following in mind:

  1. A seller isn't an agent. You have to be more careful in what you say and ask. Avoid negative comments about the house. Like it or not, the truth is that it's difficult to get a good deal if the seller doesn't like you.

2. Sellers think they're being smart. If you encourage that belief, they'll be more open to your offer. If they have a good idea, tell them so. It's not unethical to make people feel good about themselves when negotiating.

3. FSBO real estate has often been on the market a long time. Seller's are usually tired of the process and want it to be done. This means you'll get a better price if you are willing to close quickly and easily.

4. Seller's usually don't have a plan. They don't know where to close, where to buy a title policy, where to keep a good faith deposit, etc. Have simple solutions ready for all these problems. If you walk the seller through the procedure while allowing him to feel in total control, you'll both be better off.

5. Avoid issues and return later. Once a seller has invested more time with you in a discussion, he'll be more motivated to give you what you want.

6. Sellers have sometimes paid more than expected. Classified promotion and other costs have previously eaten into their made-up additional FSBO profit. You may want to be generous in discussing the many closing costs - with the understanding that you get your price and/or terms.

Real estate professionals will tell you that most houses "for sale by owner" net the seller less than those sold by an agent. By the time a seller realizes this, it's often too late to recover his money and time spent. At this point, he usually just wants to get the thing sold as easily and quickly as possible. If you help sellers with that, you can get a good deal on FSBO real estate.