By Owner of by Agent

3 Replies

I figure this is as good of place as any to ask this question.  Is there any benefit or downside to buying through an agent or the owner?

I have been looking at properties on various sites and have noticed that when on craigslist I have seen more multifamily units for sale by owner than I do by agent on other websites like zillow, trulia, or the MLS, in my area.

Assuming the information the owner provides on craigslist is accurate, (and I'm doing my math right), I have seen properties that exceed the 2% rule, and is looking like 12-13%.  

So what I really want to know is what is the downside from purchasing property through the owner?

This will be a good one.

Any one have thoughts on this???


It depends. Usually For Sale By Owner (FSBO) is used by smaller / less expensive (there are exceptions) properties for various reasons; they resent paying the full commission, they don't want to give a X month commitment to an agent, they think they are smarter then everyone else, their expectations are out of line and no agent would touch it, etc.

For larger properties, it is unusual for it to be a FSBO since the seller wants the widest possible marketing distribution and they simply don't have access to the same marketing channels. Even on a simple contact list basis, agents track every contact and blast it out to everyone they can. Agents also have extensive contacts with other agents to leverage the marketing.

The seller, if they are organized, have studied the market compareibles, can organize a 'decent' presentation flyer and are willing to invest in marketing (craigslist only just doesn't cut it), then they can do a decent job (I've sold my personal home this way) and attract enough attention to sell the property.

It also depends on the market; In a sellers market it is much easier to do FSBO then in a buyers market.

From your perspective, there are possible advantages and dis-advantages;

  Information - The seller may not know or even have the information you need. You may have to pull teeth to get what you need. An agent would / should have extracted what was needed (e.g. Rent Roll, Income Statement, etc). While a pain, this may work in your favor as other people may not be willing to put in the 'work'. Also, even if the information is simply not available (i.e. paper accounting, inherited property, lost, etc.), if you know the market (e.g. rents, expected expenses, rehab estimate), you make things simple for the seller which gives you the edge.

  Access - Agents are usually more accessible and will coordinate tours, inspections, etc. Having said that, having the sellers direct contact information is always good.

  Pricing - An agent will / should know the market and help the owner set the pricing accordingly. If it is set very low, either you are dealing with a seller that doesn't know what they have / the market or they know but there are some issues to uncover.

  Negotiations - You may be able to capture a few % points here. An listing agents' duty is to the seller so they will influence against low ball offers or tell them take a good offer before they it is withdrawn. Also by there being no commission, you 'should' be able to capture 'some' of that in your offer. Finally and perhaps most importantly, dealing directly with the owner, you can learn / better assess why they are selling, how urgently they want to sell and perhaps as importantly, what terms are key (e.g. all cash, quick close, no seller financing, etc). You certainly may have an advantage.

If you have been through the purchase / sale process a couple of times, there is no reason you can not do it yourself and you may find a gem in the rough that is unappreciated.

Hope this is helpful.


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