Buying a home is a stressful endeavor whether you already have an agent or not. Add the twist of buying a house that is For Sale By Owner and you better be sure that you know what you are getting into.
If your dream home is for sale by owner, keep reading for some homebuying advice and what you need to be prepared for as a buyer.
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Agent Listed vs For Sale By Owner
Understanding the ins and outs of real estate can be confusing. Someone who has chosen to list their home, or find their new home, with an agent wants an expert to handle the details for them. The home can be listed on the MLS and you have a built-in negotiator and paperwork processor.
Houses listed with agents also come with agent’s fees. A typical home will have 6% of the sales price in fees, 3% for the seller’s agent, and 3% for the buyer’s agent. Avoiding fees is the main reason a seller chooses to list their home on their own.
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If someone is selling a house on their own, they may not have to pay realtor fees, but you as the person buying a home need to take all of that into account as you work through the process.
Are You a Good Communicator?
If you are looking at houses for sale by owner, and are not using an agent, you as the buyer need to build a relationship with the current owner. Getting to know them, being willing to ask questions, and establishing a rapport will help you as things come up that will need negotiating.
You may consider using a real estate attorney to review or help create documents. In some states, this is required by law, but it can help you understand the ins and outs of the contract so that you can better communicate with the owner.
Paperwork, Paperwork, Paperwork
As you work on making the most expensive purchase you will likely ever make, it’s important to protect yourself. Consider these important steps that you will be in charge of working through without an agent:
- Get preapproved for a mortgage
- Draw up, sign, and negotiate contracts, including making sure there are contingencies in place to protect yourself during the buying process
- Get a professional home inspection, review the report, prepare to negotiate for repairs or lowering the price
- Research the property and properties close by to get an idea of market value
- Get an appraisal and know what to do if the appraisal comes in low
- Having a 3rd party protect any deposits in an escrow fund
If this list doesn’t intimidate you, then you may be the perfect candidate to purchase a house for sale by owner. Be ready to research each of these points further to make sure that you are giving yourself all the help you can.
Is It Worth the Effort?
Only you can answer this question for yourself. Now that you know where to start if you choose to buy a house that is for sale by owner, you can make an informed choice.
Take time to browse other posts on this page to learn more about home-related topics!
