How to Buy a Home for Sale by the Owner

An FSBO, or For Sale By Owner, is an option that homeowners have in order to save on brokerage fees.  This means they are selling their home on their own without assistance. For sellers, it means they do not have to worry about giving a slice of the sale to a broker, but for the buyer there are some aspects of this type of sale to keep in mind.

1. 
   

   Pull
   comps from other homes in the neighborhood. You can have a real
   estate agent do this for you at no charge. This way you can see what
   other comparable homes are selling for in the area. If the FSBO is
   listed at $400k and other homes have been selling for $250k, the
   seller is greatly over-pricing their home.

   
   


2. 
   

   Check
   out the home, and if you like it, ask the owner how they arrived
   at their asking price. Get a copy of the appraisal on the home so
   you can see what it is actually worth. The last thing you want to do
   is overpay for a house.

   
   


3. 
   

   Make
   an offer on the home based on the comps in the neighborhood.
   Remember, when making an offer on any home, you want to make it reasonable based on what the home is worth. For instance, if
   the home is worth $400k and that is their asking price, do not offer
   $200k.  That will simply insult the seller and they will reject
   any further negotiations with you. If the home is in an area where
   houses are selling fast, make a strong offer of $380k for example,  or if you are comfortable, make the asking price offer.

   
   


4. 
   

   Hire
   a home inspector to come out and inspect the home. Do not use an
   inspector that the homeowner recommends.  That way you are get an
   unbiased inspection. If there is anything major that the inspector
   finds, have the seller agree in writing to fix the problem before
   you close on the home. If the seller refuses, be prepared to walk
   away and cancel the contract.

   
   


5. 
   

   Get
   the help of an attorney or a real estate agent to make sure the
   contracts are in order before you or the seller sign anything. By
   taking some steps to protect yourself when buying a FSBO home, you
   can often find a very good deal when the seller is willing to
   negotiate on price.