BROWSE HOW TOs

How to Buy a Home for Sale by the Owner

By eHow Personal Finance Editor

Rate: (8 Ratings)

Sellers who want to save the brokerage fee by selling their home themselves put the house on the market as FSBO - For Sale by Owner. When working with FSBO sellers, keep these steps in mind.

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Instructions

Difficulty: Moderate

Things You’ll Need:

Inspectors
Real Estate Attorneys
Pads Of Paper
Pens
Personal Organizers

Step1

Get comparable prices for other homes in the neighborhood from a local real estate company to ensure the home is not overpriced. (Firms usually do this at no charge.)

Step2

Question the owners about the asking price. How did they arrive at the price? Request to see copies of comparable sales they are using or a copy of the appraisal.

Step3

Ask the owners specific questions about the property: How long has the home been on the market? Are there any defects or conditions that the buyer should be aware of (sellers in many states are required to fill out a transfer disclosure statement that lists the condition of the property - ask to see one)? Why are the sellers selling and are any nuisances or negative conditions in the property?

Step4

Hire your own home inspector, one not recommended by the seller.

Step5

Make an offer that's based on comparable prices in the neighborhood, not on the listing price.

Step6

Have an attorney or Realtor to look over contracts and agreements before signing.

Tips & Warnings

FSBO (For Sale by Owner) properties are more common in a hot seller's market when sellers get their asking price and sometimes even more.
Remember, however, that the owner is saving commission costs, so be prepared to bargain.
If it's not a seller's market and the owner has had difficulty selling the home, you could reasonably make an offer considerably lower than the asking price.
Consider hiring an attorney or a buyer's broker to work with you when buying a FSBO home. (You'll have to pay the broker's buyer yourself.)
Negotiations can become personal without a third party acting as a go-between. Owners may not know all the key details of a real estate transaction. Visit your library and read up on your rights as a buyer in a real estate transaction.
Use an updated deposit receipt. There are new laws that are contained within that must be adhered to. Go to a Realtor supply store or buy one from a real estate agent.

Comments

sitichon said

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on 10/28/2007 Many sellers of FSBO homes are much more savy and personable than most people think. That is because they are required to do all the homework themselves. It can also be much more helpful to be able to talk directly to owners about their property than through the sometimes frustrating third party bottleneck of agents. It's easier to get a feel for their flexibility which can give you a much better idea of an offer they might accept. If they like you they seem much more willing to work with you on a price which is what happened to us. A very pleasant experience.

Anonymous said

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on 11/22/2005 In many, if not most/all states, a title company does the legal work for you, helps you out with what you need to do and does the closing and the transfer for you for less than a lawyer. But, it's probably not quite as secure in a complicated transaction.

Anonymous said

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on 11/22/2005 If you are looking for a home in an area that is full of FSBO
signs - Contact a Realtor and ask them to call the FSBO for you as a Buyer's Broker. In most markets your agent will represent you and they will ask the seller to compensate them at a reduced

Anonymous said

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on 11/22/2005 If you have a broker/attorney and seller does not, you may find yourself in court later. Get him a lawyer or a broker if you have one. If you don't, then you are both fools. A good broker can often save you his commission and then some. Disclosures vary.