Buying A FSBO Home

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Buying a FSBO home can offer many advantages over an agent listed home. Smart buyers always shop for FSBO homes first because the asking price has not been inflated to compensate for a commission. Keep in mind the sellers are often emotionally invested in their homes so it's important to be courteous and diplomatic.

A big advantage is that the owner will be able to tell you things about the home that an agent just won't know. They can share insights like the sunroom addition that was added two years ago, or the neighborhood barbeque every other Saturday evening. Wouldn't it be nice to know about the children in the neighborhood around the same age as your kids?

In fact, it's not at all uncommon that when looking a home with an agent, you are both seeing the home for the first time. When you are working directly with the owner you can take your time looking through the home and not be pressured to go see the next home on the list. Be sure you make notes to refer to later.

After you have all the information about the home from the seller and you have decided to place an offer, the next 5 steps will make it easy.

  1. Hopefully, you have a pre-approval letter. If you don't, they are easily obtained and available from your choice of a financial institution within a day or two. By having a pre-approval letter, your personal financial status is not known by the seller. A pre-approval letter may also be a negotiating tool in your favor.
  2. Review your notes and any informational pieces the seller handed out to be sure you are definitely interested in this home. Check the websites for statistics on the schools, if applicable and crime rate. What is the distance to your employment and is public transportation available if needed. You should drive through the neighborhood during the day and night to be sure this is the environment you want to live in.
  3. Do some comparable work to verify that the asking price is being offered at the market value. There are many websites that offer this data such as Zillow.com or realestateabc.com. Be sure to ask the seller what they are basing their asking price on. Did they have a recent appraisal? Do they have a list of recently sold comps they can share with you?
  4. After you have completed steps 1 through 3 and decided this is the home you want, call the seller to schedule a second viewing. Remind the seller who you are and your intentions to put them at ease. It will give you a second chance to view the home to be sure you didn't miss anything. It also gives you a chance to get to know the seller better. Don't forget they are as anxious as you.
  5. Decide what price you are going to offer. Include any contingencies applicable. Put the offer in writing with a deposit for escrow and be prepared to negotiate if necessary with the research information you acquired as to the price you offered. Once a price is agreed determine who will handle the paperwork. Generally, the buyer's attorney draws up the contract. However in some instances the seller has already made arrangements with their attorney to draw up the contract. The seller's attorney will hold the deposit in escrow. Your attorney should review the contract for your protection and advise you as to the following steps needed to prepare for closing. You will have a certain number of days listed in the contract for you to obtain final mortgage approval.

You have done your job and the hard part is over. Your attorney will follow through on the status of your final mortgage approval, home inspections, title search, pro-rating of taxes, etc. Follow these steps, working closely with your attorney, and you will find how easy and rewarding buying a FSBO home will be.