How to Buy a Home for Sale by the Owner

How to Buy a Home for Sale by the Owner. 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.

Step 1

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.)

Step 2

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.

Step 3

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?

Step 4

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

Step 5

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

Step 6

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

Tip

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.)

Warning

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.

Things You'll Need

  • Inspectors

  • Real Estate Attorneys

  • Pads Of Paper

  • Pens

  • Personal Organizers