How to Make an Offer on a House That's for Sale by Owner

Ready to buy a new home? You've determined your budget, got pre-approved and started searching for a house. It's not unusual for home buyers to look on their own for properties that are for sale by owners. But if you choose not to work with a realtor, it's important to know what to do before presenting an offer to a seller. Generally, the first step when you're purchasing a house for sale by owner is to familiarize yourself with a real estate purchase contract. Here are some guidelines to follow in order to avoid potential problems.

Instructions

1. Draw up a real estate purchase contract. Normally, a realtor would do this for you. Keep in mind that a realtor can give you good advice on the entire process, including professional home inspections and contract negotiations, at no cost to you. But if you decide to buy the home alone, be sure to do your homework.

2. Find generic real estate purchase contracts at your local office supply store. The contracts have easy instructions to follow. If you can't find a contract there, browse the Internet. Also, you can search on your county website for related forms or call your local Board of Realtors for help.

3. Read the contract carefully before you fill in the blanks. The contract requires basic information, such as the names and addresses of the seller and purchaser, the sale price and the address of the property to be sold. Other items generally found on the contract of sale are the amount of deposit or "earnest" money being put down by the buyer, the closing date and various contingencies that must be met before the deal closes, such as the buyer obtaining financing within a specified time.

4. Present the completed purchase contract directly to the seller for review. Any time you present an offer, there are three options: The seller can either accept the contract as is, reject the offer or make a counter-offer. Keep in mind that there is always room for negotiation. You may disagree on some points, but the basic transaction is something that both the buyer and the seller want. You may go back and forth numerous times until both parties agree.

5. Consider contacting a local real estate agent or real estate attorney to assure protection of your interests. It is wise to have the purchase contract reviewed before signing. Remember, this contract is a binding legal document, and you can be held liable if you don't abide by its terms.