Buying a "For Sale By Owner" house involves most of the steps of a conventional purchase, however, there are some differences. Here is what you need to do, and what you need to look out for.
- Find a buyer's agent. Some For Sale By Owners will offer a commission to buyer's agents since they do not have to pay a seller's agent a commission. You do not have to pay for the service since the agent receives payment from the seller. The agent should be an expert in the region you are buying. This agent will make sure your interests are protected and will negotiate a fair price based on his or her expert knowledge.
- Know the lay of the land. If the seller will not pay a buyer's commission it is up to you to determine the value of the property or hire a buyer's agent yourself. If you do not want to pay for this service do some research on your own. Check out other open houses, go on the Multiple Listing Service to see what similar houses sold for, and ask the opinions of others in the neighborhood.
- Make an educated offer. Many sellers overprice their house for the simple fact that they love it, and can't understand why anyone would not love it too! Often they overlook problems with the house when they go to price for the reason that it "never really bothered them" while they were living there. This is a dangerous way of thinking and be wary if and when you hear this. Keep this in mind when you are viewing the property and making an offer. Do not feel like you are insulting the seller since this is a business transaction.
- Get a disclosure form. Make sure you get a disclosure form from the seller stating any problems with the house, any past problems (for example, flooding in the basement), and any other nuances the home may hold. Keep a copy of this for your records
- Have an inspection. Although buying a FBSO can be more relaxed than going through agents, you should never feel too relaxed. Even if the seller promises there has never been flooding in the basement, you need to have an inspection.
- Lastly, get a lawyer. Even if the seller insists on not having a lawyer, you should get one. A lawyer will protect your interests and make sure the seller is providing you with all the information needed. Buying a FSBO can be a great experience as long as you do not lose sight of the fact that it is a business transaction. You should follow the same steps as you would if you were going through agents.