When you think about buying a home, you probably envision this being done with a real estate agent. Perhaps you’ve thought about how that agent would dedicate themselves to showing you potential houses and walk you through the steps and when you do find the house of your dreams, you would have that real estate agent to thank. However, a growing number of home owners are buying FBSO houses and finding that it saved them considerable amounts of money. Let’s look at the ways that purchasing a home that is “for sale by owner” can be beneficial to you.
At any given time more than twenty percent of houses on the market are for sale by owner houses. Now, this obviously means that there is a not an agent on the selling side, however there does not need to be one on the buying side either. If you involve an agent when purchasing an FSBO house, you or the buyer would need to pay a commission to that agent and both of you do not want to do that. By following some clear guidelines, you can cut out the middle man, making the process beneficial to both parties involved.
The first thing that you should do is to stay within your means. While we have all heard this advice before, there are millions of credit card holders who have not followed it. Decide what your maximum budget is and never go above this amount.
Once you know what your maximum price would be for the house of your dreams, figure out how much you can afford for a down payment, while still leaving yourself a good amount of emergency money. While putting down 20K may seem like a great idea, if that leaves you with nothing left in your bank account, you may be better off putting down 15K and having some backup. Once you know your figures, it is time to get pre-approved. This is an important element to buying FSBO homes, as the seller will know that you are serious and ready to get down to business.
You’ll next want to scan around for FSBO houses, very simply done via the Internet. Now, since the seller does not have an agent and you do not need one either, the next step is to simply contact the seller. Make a list of questions you wish to ask about the property so that you can rule out any that do not suit your needs. To cover yourself and make sure that you would be paying a fair price, you will want to obtain a valuation report for the property. This is much like the information that a real estate agent would receive, showing the comparative market analysis, known as CMA. The CMA will compare the house to others that have sold recently in the neighborhood.
Before making an offer to the seller, you next step would be to obtain an attorney, preferably a real estate lawyer who specializes in home sales. Once you are backed by legal counsel, your attorney will guide you through the process of making an offer and closing the deal.