Single family homes that are for sale by owner aren't listed in the multiple listing services and don't have a seller's agent involved. Should you come across one of these homes, however, there are multiple reasons to consider making an offer on it.
Limited Competition for the Home
First, single family homes that are for sale by owner see less competition among potential buyers.
Since a for-sale-by-owner house isn't listed in the multiple listing services, which is the standard listing place that real estate agents use, fewer people realize that the home is for sale. In many cases, the only way to learn about a home that's for sale by owner is to hear about it within your personal network or to drive by a sign in the yard.
The reduced competition that for-sale-by-owner houses see puts you, as a potential buyer, in a better position. You won't have to compete against a lot of other people who want to buy the house, and you might even make the only offer on the house. If you have the only or one of the few offers, the seller will be forced to seriously entertain the purchase price that you suggest.
Better Negotiating Knowledge
Second, you can still hire a real estate agent to serve as a buyer's agent even if the seller has decided to forgo hiring their own agent.
Should you hire a real estate agent, you'll benefit from more negotiating knowledge. Unless the owner who's selling the single family home is themselves an agent, they won't have the same industry expertise and negotiating tactics as your agent. You can use your agent's expertise to negotiate a purchasing agreement that's favorable to you.
Lower Purchase Price
Third, you should be able to purchase a single family house that's for sale by owner at a lower price than you would get the same house for if a seller's real estate agent was involved.
Sellers normally pay the real estate agent fees of both the home buyer and the home seller, and each agent typically takes 3 percent. A home seller must factor this into the price that they ultimately accept, for the commissions reduce how much the seller actually keeps.
When a seller decides to sell their single family home without an agent, they don't have to pay a 3-percent seller's agent fee. Thus, you should be able to reduce the purchase price by 3 percent and still have the seller accept your offer.