Buying a house for sale by owner?

Question

What types of things do I need to look out for when buying from an owner and how much should they know? Fees involved or anything like that ussually?

Answer 1

There are no additional fees in purchasing FSBO.

In my experience, FSBOs ask too much for the house and are penny wise, pound foolish. They want to save the money they would pay a Realtor, but the first thing a buyer will ask for is a percentage off the top because the seller is not paying a Realtor.

Insist on working with a title company, they are a neutral party in the transaction and will hold funds in escrow until the transaction closes. A title company will also perform a title search to be sure there are no liens or clouds on the title that need to be resolved before title can transfer to you.

Most FSBO use forms they obtained from an office supply store or a limited service agency. If your seller produces a contract prepared by an attorney, hire a RE attorney of your own to review it.

Have a contingency written that you will pay for a professional home inspection and must approve said inspection. If they had an inspection done, it doesn't matter, get your own.

Answer 2

Owners tend to want more money for the houses. Real estate agents frequently persuade the owner to ask for less money. Real estate agents who are usually eager to make the commission on the sale frequently during the buying process persuade the owner to accept less money.

On the other hand when there is no commission to pay the owner may accept less money because all of it goes into his pocket

There should be no extra charges as such when you buy from the owner.

You should, however, make sure that you have a licensed independent inspector. Do not accept the recommendation from the bank, real estate agent if you have one or from the owner. You do not want the inspector to be beholden to anyone.

Watch the cost of the mortgage and I do not just mean the interest rate but also the closing costs. You can and hold get different estimates.

Look at comparables but they must be very recent since prices were higher just a few weeks or months ago.

Find out about the quality of the schools that the children in you area attend even if you do not have children. That will affect the resale price of your home.

Pay in at least 10% or you will be paying extra for your insurance.

See if there is any building planned or possible that may negatively or positively affect the value of you new home.

This is a good time to buy a home since prices have come down They may come down further but you will never be able to hit the bottom of the market.

Good luck and enjoy home ownership.

Answer 3

You will look out for the same things whether buying with an agent and from a listing as you would from a For Sale by Owner. The house should be clean, if there are upgrades that is good, the seller is to disclose if they know of any defects in the house. I can't say this enough, but all buyers should have and pay for a home inspection regardless if it is a new home or not. The upfront fee will be paid by buyer even with an agent and should not be waived at anytime. If you happen to think you don't need a home inspection, please think again. There are so many times when a buyer wants to go after the seller because something happens within a few days of closing. If you waive your inspection there is nothing you can do about it. If you have an inspection and there are things that need repair or replacing you can ask the seller to pay for but they are not required by law to fix. They are required to disclose anything they may know about the property. Seller may ask buyer to pay all closings cost or they could offer to pay half, or they could offer money towards closing costs. The Purchase Contract that is written up is a legal and binding contract on both parties. Nothing major is different than buying from a listing or a For Sale by Owner. You still would use an Escrow company to hold all monies as a third party.

Answer 4

I did this once and it worked out very well. I found it in a classified section of a newspaper. I called and asked about the house, then was given a tour. I compared the asking price with the original purchase price and knew instantly it was an excellent buy. I went to three banks and comparison priced for a loan and also the interest rate. That decision made I went back to the owner and made an offer. The offer was accepted. I agreed to pay for the escrow as I would never make a major purchase without escrow. Some people do and live to regret it in the ownership department. The owner should only need to know how and when he is getting his money if you do your own financing. Also, if you are not experienced at checking out buildings for problems you may want to hire someone who is. The fee is not usually too much and is well worth the amount to know what problems you can expect to encounter. That might also influence the offer you make for the purchase. I kept mine for 17 years and resold it for 1/3 more than I had paid for it.

Answer 5

As above stated you will need a real estate attorney to settle for you and a contract, which you and the seller can write yourselves or a standard one can be purchased at a office store or on line. I have purchased 2 homes by owners and have been very satisfied. In this day and age, however I think now I would have a home inspection done and have it written in the contract that if the home inspection showed repairs of more than ? dollars, then the contract was void unless the buyer would fix such problems.

Answer 6

first of all this can save you money but you must insist on several things home inspection, pest inspection
i bought my home from someone that was a for sale by owner. if you want to get an idea of what the value may be go to this site www.zollow.com enter address and zip

as a mortgage banker i use this all the time but know there is some wiggle room on the estimate it takes the average so i always deduct 20k off the price i see to make sure im in the ball park

when negoationg wtith them ask for selling consessions they will not be paying a agen so they will have more wiggle room. try to get 6% settle for 3 a seller consession can save you thousands in closing costs!
It may be helpful to get a real estate attorney involved to make sure the contract is legal

the title company will make sure everything is legal
as far as fees they are relatively the same as selling without an agent getting a % of selling price.

make and offer w/seller consessions of 6% ask that it is condidtion on inspections doen and paid for by seller.

not having an agent involved can be in your favor but make sure the inspections are done and not by someone the seller knows!

Answer 7

You might ask your Realtor what value he/she adds to the transaction. Since you've already found the house at a price you like, I don't think you need a Realtor; but you do need a real estate lawyer to make sure the owner legally owns the house they're selling as you could end up owing money to other people too. You also want to get a warranty regardless.

Answer 8

You don't need a realtor obviously, but you do need a Real Estate Attorney to guide you through the contract and add all the necessary amendments for disclosure, etc. No, I am not an attorney.

Answer 9

You will still have title insurance and closing fees. Get a real estate lawyer to handle the transaction for you and you will be fine.

Answer 10

A cheaper expert that you can utilize and rely on is a good mortgage banker. They'll be loyal to you throughout the transaction because they are doing your loan for you and can notify you of any red flags.