Why Is Liability All On The Seller With For Sale by Owners?

For Sale by Owners (FSBO) real estate listings come with a variety of scams and liabilities for buyers today. What can seem innocent and approachable is in reality, a financial liability waiting to happen. As most people say to themselves when it comes to real estate: how hard can it be? However, it’s important to realize that a house is probably the biggest financial investment you’ll ever make in your life, which is why playing around with real estate without the presence of a realtor is not a wise move.

For sellers, going down the FSBO route can seem logical – you’re avoiding the commission paid to the realtor and in the process saving money, right? However, by going rogue and omitting the professional from the equation, you’re assuming all of the liability on your shoulders. There’s no one to step in on your behalf with professional guidance, legal protection, or support at the end of the day. So in reality: is saving that money really worth it? The answer is a resounding no.

Liability

Everyone makes mistakes, and as a seller, you’re definitely going to make them. You’re not a professional real estate agent, which means you really don’t know what you’re doing. As the seller, you’re going to have to pay for your mistakes that a realtor wasn’t able to catch for you. Without an agent, you don’t have the protection of errors and omissions (E&O) insurance. This won’t end well for you if something goes wrong.

So let’s say you put in your listing that your home comes with hardwood floors. If the buyer discovers that it’s just wood veneer, chances are you’re going to have to pay for that mistake – and it’s going to cost a lot more than hiring a real estate agent. If you had had an agent, the mistake would’ve been covered by E&O insurance. We live in a litigious society today, which means buyers will have no problem coming after you for this mistake. Lawsuits can totally empty out your bank account, all because you didn’t want to consider a real estate agent.

FSBO Shortcomings

Additionally, as the seller, you may not realize it now, but FSBO comes with a variety of hidden fees that would have been waived with an agent. As a novice, you’re not aware of these fees in the beginning. By the end, the fees, not to mention the paperwork and overall process of mediating a home sale without a third party, cause a FSBO transaction to be twice the time of a normal real estate transaction. So in terms of liability, a FSBO comes with legal, financial, and time liability that you probably didn’t envision in the first place.

Professionals exist in every major industry today for a reason: they know how to help you. Attempting to sell or buy a home without a third party real estate agent present is a financial meltdown waiting to happen.