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Every situation and market is different. However, if your property and local market are strong, you may want to consider FSBO. Our story may be the exception but was positive in purchasing a FSBO and we were intent on selling it the same way.

My first house (1997) was FSBO. It was in a neighborhood that routinely went FSBO because of desirability. Several months before we bought ours, a very comparable one next door sold FSBO. The sale price was public info so we had a pretty decent comp. We "bought" it on a Saturday afternoon during an open house by saying we'd meet their asking price and giving them a check for $500 and asking that they get in contact with our lawyer on Monday morning.

He drafted and reviewed the paperwork and had a cashier's check for earnest money. A woman from the bank I worked for handled the loan and (as we were first time buyers our state had a program) scheduled the inspections and appraisal for underwriting. It cost us about $750 in attorney's fees but we felt in good hands. He went to the closing with us (after having received advance copies of all documents).

Four years later, the house beside us sold FSBO in a week. Then, in early 2006, it went FSBO in a few days. We thought we'd possibly do something in mid-2007 and had been looking at houses through the fall of 2006. We had a realtor of a house we were interested in give us a "market appraisal" of our home. We also had a realtor that had a listing three blocks away do the same. They were within one percent of each other (and about five percent higher than what we'd been thinking).

The neighborhood realtor called and asked if we'd be interested in doing a "one party [one showing?]" listing. We agreed and four hours later had a full price offer (at ten percent more than we'd originally thought). We'd originally planned on doing FSBO with our attorney handling the paperwork.

The realtor was not a nice woman and acted inconvenienced by every question or having to deal with us. Outside of the closing, she had spent about two hours total with us. That was the only downside to having to pay her commission- I'd rather have given it to someone else. It turns out that it would have cost us about 1/8 of what we paid in commission but we didn't have to worry about a thing and (even after commission) came out ahead of what we would have done FSBO).

Here is something regarding the purchase of a used home in Texas. Some parts of the following may only be applicable in Texas but most of it applies to what you are doing:
1) Talk to the neighbors that live around the house you are considering purchasing before you purchase it. Don’t be shy, knock on the door and say hello. Maybe you might start by asking them about schools or local churches, or whatever. Then ask them if they know of any problems with the house. If they have seen any repair trucks at the house for example. Ask them if they know why the sellers are moving.
2) In Texas ALL real real estate inspectors are licensed with the state. Never hire any inspector suggested by any real estate agent involved in the deal! Find your own inspector and get references and CALL those references! See if you can find one with professional liability insurance. MAKE CAREFUL NOTE of the agreement the inspector wants you to sign! I repeat! Make careful note of the inspectors agreement! In Texas the inspectors all have a clause limiting their liability to what you pay them. So, if you pay them $495 and they make a huge mistake that costs you $100’s of thousands you are screwed. Strike through this part of the agreement if you can. I suggest you videotape the inspection. Open up every door in the place, every attic door and anything else you can get in to. And make the inspector look at everything you can. When you get the inspection report read every line! And demand the inspectors written notes they made during the inspection. Usually they just put what they noted in a computer and sometimes they screw up. Get the notes and compare it to the computer generated inspection report. If the inspector finds things to fix and writes up money estimates DO NOT trust that they know what the real costs are. If there is a plumbing issue and the inspector says it’s going to cost $100 get a real plumber in to give you real estimates, etc.
3) No matter what the inspector finds bring in a plumber, HVAC people. Hire an electrician, a roofer and pool company if there is a pool. If you have any question about anything bring in a professional! If they do an estimate make sure you read and understand it.
4) If the house is expensive hire an engineer to inspect the house besides hiring an inspector.
5) READ THE SELLER’S DISCLOSURE. READ ANYTHING THE SELLER PROVIDES THAT LISTS PRIOR WORK, IMPROVEMENTS or ANY KIND OF WORK THE SELLERS HAD DONE ON THE HOUSE!! If they have anything listed on the disclosure they repaired or improved get all the receipts for any work they have done.
6) Again, I’m speaking of “used houses” here. DEMAND they provide and carefully review the disclosure the person selling TO YOU received when THEY PURCHASED the house they are trying to sell you. Also get the inspection from when THEY purchased the house. The earnest money contract may stipulate that they have to give you prior inspections if they have lived in the house less than a certain number of years. No matter how long they have owned the house get the disclosure they received and the inspection they had done.
7) Go to city hall and find the permit department. Give them the address of the house you are considering buying and see if there are past permits that have been pulled for the house.
8) Call your insurance agent. Get them to run the address on the house you are looking at in the ChoicePoint CLUE system and the ISO A+ system. These databases may list past insurance claims. If your agent does not have access to these databases find one that does. You may find out things about the house they are not telling you about.
9) I’ve listed a lot of things above. if you can’t get these things RUN!
10) Ask the listing agent and the selling agent if they have Errors and Omissions insurance. If they don’t do not use them. Ask your agent to pull all the MLS data on the house you are looking at and to let you read it. Find out how long it’s been on the market and what the person selling to you paid for it when they bought it if possible. A lot of houses have been sold several times. This is especially true of houses with problems. If you can find out who the prior listing and selling agents were on prior sales CALL THEM and ask them if they know of any problems with the property.
11) Besides not using an agent that does not have liability insurance BEWARE of real estate agents that work as “independent contractors”. For example, there is one HUGE real estate organization (think balloons) who has agents that rent their offices, etc. from the franchise owner. In the event your “agent” that works for these types makes a mistake you will have a tough time getting to the rich folks that own the balloon.

OK, let’s say you do everything right. You hire the right people, you have a great inspector, etc. You do everything right and you buy by the house only to find that the house has horrible problems that have been covered up. And you are screwed. Big time! If you have to sue be very careful when it comes to lawyers and litigation. Find a board certified real estate lawyer and only sue of they take the case on contingency.