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A Buyers Guide to For Sale By Owner Homes

By Edited Feb 8, 2014 0 0

When you see a home listed as For Sale By Owner, it is always for the same reason.  The homeowner is trying to save money.  Homeowners can save thousands by choosing to sell their home without the assistance of a real estate agent.  Since the housing market is particularly difficult right now, more and more homeowners are turning to this option.  While going the For Sale By Owner route is great for the homeowner, what does it mean for the buyer?  If you are looking to buy a For Sale By Owner Home, you may be wondering what this will mean for you.  Here are some tips for buyers.

Disclosures Still Apply
Many home buyers worry that if they buy a For Sale By Owner Home that they won’t receive the same legal disclosures as they would with a realtor.  Luckily, you don’t have to worry.  The homeowner will still be required to let you know what is wrong with the home.  There are many disclosures required by law including letting the buyer know if someone has recently died in the home, if the home has been affected by a natural disaster and any recent or major repairs.  If the homeowner does not provide these required disclosures, they can be hit with a costly lawsuit.

FSBO May Mean Savings for You
For Sale By Owner homes will not have to pay huge realtor fees.  This may mean that the homeowner is saving as much as 5-10%.  Some homeowners will pass these savings onto the buyer.  This results in a great deal for the potential buyer.  Be aware that homeowners set their own prices and without the help of a realtor may be a bit high.  If a FSBO home seems much higher than other homes in the area, don’t waste your time.  Move on an find a more affordable option.

Use an Escrow Company
If you place an offer on a FSBO home, you will probably need to put some money down.  This is usually a percentage of the final price.  Rather than risking your money by giving it to the homeowner, use an escrow company.  This helps protect you should something go wrong with the sale.

Be Clear in Your Offer
Many are not skilled in writing home offers.  This can result in a few problems if you aren’t careful.  Before putting in an offer make sure that you are very clear in regards to contingencies.  For example say that you won’t be required to purchase the home if it doesn’t pass inspection.  By being clear, you can ensure that you won’t get stuck with something you don’t want.  Remember if it isn’t in writing, the homeowner may not be required to fulfill your wishes.

You Can Have a Realtor
If the seller is trying to save some money, they may choose to skip the realtor, but you don’t have to.  If you want to have a realtor to help you through the home shopping process, you can.  They will help you write a great offer, remember contingencies, calculate taxes, schedule inspections, and keeping you from getting ripped off.  Usually you can have your own realtor for a small percentage of the home sale price.  You can even get the seller to pay your realtor fees.  Many motivated sellers are willing to pay realtor fees to get their homes sold.

Hire a Lawyer
While a realtor is optional, a property lawyer shouldn’t be.  Consider hiring an attorney to help you with the sale.  They will help to keep everything organized and will keep you from making common mistakes.  It usually will only cost a few hundred dollars and can save you quite a few hassles.



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