Avoid – For Sale By Owners

The 5 Reasons To Avoid Buying FSBO Are:

1. Money  2. FIRPTA  3. History  4. Quality  5. Scams

Avoid For Sale By Owners to protect yourself and to save yourself future grief. Buying a For Sale By Owner home is not as good an idea as it used to be. So many things can go wrong nowadays. You may think you’ll save money buying without a Realtor, but always remember “Buyer Beware.” Do you know what you don’t know? In regards to a For Sale By Owner, this is especially important.

Ask Yourself:

  • Do you believe all people are honest when money is involved?
  • Are you willing to be a victim of a dishonest home seller?
  • Why won’t a seller pay for either party to have a Realtor?
  • How do you check the information Mr. FSBO gives you?
  • What’s in it for you to make a large purchase without a FREE Realtor
  • Why would Mr. Seller sell his house for less to you, net the same amount of money and do all the work himself instead of using a Realtor?                                                                          

Be Suspicious         FSBO

A home is the largest purchase most people make. Why would you not use a Realtor? When a seller is not paying a Realtor, saving the commission money is the most common reason. Usually, the seller gets all financial benefits because he’ll want Fair Market Value and show you comps. You’ll pay what the comps paid and have no professional advice, knowledge, and assistance.

Know that money may be the most common motivator for a seller to FSBO,  but there are WAY WORSE reasons. Another reason to avoid For Sale By Owners is FIRPTA.


READ THIS! Do you know about FIRPTA? FIRPTA -The Foreign Investor Real Property Tax Act is a law that holds 15% of the home’s sales price for the IRS to ensure that Mr. Foreign-National Seller files a US tax return next year. That makes sense. What IS SCARY in that law is that the buyer is responsible for the seller paying this withhold. The consequence is that the buyer can be stuck with this debt.

Example: David Smith AKA Mr. FSBO sold you his house for $400,000. Two years later, the IRS asks you for the 15% of the SALES PRICE or $60,000 that David Smith should have had withheld. It was up to you to have it withheld or have an affidavit signed. You’ve probably never even heard of this law or affidavit. Mr. Smith was born in Germany and moved to America when he was a toddler, so he had no accent. David Smith is such a common name that he cannot be located. Guess what? You now owe the IRS $60,000 because you bought an FSBO to save a couple of thousand dollars.

For more information about FIRPTA – the Foreign Investor Real Property Tax Act, see our FIRPTA Blog For Buyers or FIRPTA Blog For Sellers.No FSBO


There could be something about the house that the seller does not want you to know. Most states require a disclosure form where KNOWN things are supposed to be disclosed. These questionnaires don’t cover everything. Recourse if a seller lies is a legal matter.

A Few Examples Are:

  • Water Leaks- roof issues, a flood inside, or broken water line in the yard or under the slab
  • Mold- Professional or self fixed. (I asked a seller about mold once and was told he sprayed it with bleach and painted over it- NOT GOOD!)
  • Lawsuits- Kitec Plumbing- a HUGE problem, and the lawsuit are no longer open. Maybe the seller got money and did not fix the plumbing. There could have been a class-action lawsuit within the development, or the association is being sued
  • Crime Scene- burglary, tear gas usage, murder or drug lab history


When a seller is just cheap in general, you need to be careful. Poor quality repairs or “band-aids” to cover things up are out there.

  • What’s under the throw rug?
  • Is that plastic instead of glass on the oven?
  • A room can be unusable because the air-conditioning doesn’t go into that room.
  • Did Mr. FSBO have the water heater he installed permitted?
  • Are there earthquake straps on the water heater?
  • Does Mr. FSBO always buy generic and the least expensive product available?

I saw a plumbers’ house where the bar sink drained into the rain gutter downspout, which drained to the front street gutter. Be careful of corners that are cut.


Many people are preying on honest, hard-working people, and a home purchase is a high-ticket item. The National Board of Realtors was first created after the depression when people were buying swampland in Florida, claiming it was beachfront. Bob Vila has a blog about 9 Real Estate Scams that I’ll link you to because I’m not going to do scare tactics. Know that scams are out there.

I consider it my job to use my 25+ years as a Top-Producing Realtor experience to protect you and your investment. As a former Nevada building engineer (PE, CE) I look for flaws while you see if a house will work for your family. If you see an FSBO house that you’re interested in, let us represent you. We will contact them and our title company to see what’s up with that property.


Avoid FSBOs to Protect Yourself! However, there are always reasons to consider buying an FSBO. Make sure you know everything. If you go that route, please keep your eyes open, get professional advice and ALWAYS get a home inspection.

This Blog Is Written By Kurt Grosse, Realtor with Realty One Group for 15 years. Before associating with Realty One, Kurt was in the Elite  Top 1% of Century 21 agents in the world for 5 years. If you need a Nevada Realtor who will protect you, contact Kurt today- 702-750-7599.

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