How to Buy a House For Sale By Owner

Buying a house For Sale By Owner can yield savings if you are able to negotiate a lower price because the seller isn’t paying any commission. However, additional due diligence is required because the seller has not already been vetted by a listing agent.

Search for FSBO Listings

If you want to buy a house For Sale By Owner, you’ll need to specifically look for FSBO listings on public real estate search websites. Remember that not all real estate sites will have FSBO listings, and you won’t be able to search for FSBO listings on the MLS either.

Verify Ownership

You should verify the ownership of the property and do some basic due diligence before proceeding any further with a FSBO property. Many FSBO properties are spam listings put up by real estate agents in disguise, looking to catch direct buyers who inquire on their listings as leads.

Submit an Offer

It’s important to confirm with the seller what he or she would like to see from you in terms of documentation before submitting an offer. FSBO sellers may not abide by the standards or norms commonly used by real estate professionals.

Conduct a Home Inspection

You’ll want to conduct a home inspection if you’re buying direct from an owner. This is especially true if you are purchasing free-standing property such as a single family or multi-family house.

Review and Negotiate the Contract

You’ll need the assistance of a lawyer to guide you through contract negotiation and diligence, especially in a state like New York where the purchase contracts can be quite long and customizable.

Legal and Financial Due Diligence

Your lawyer will come in handy by ordering and reviewing a title search and report on your behalf. If you’re buying a house, your lawyer may order a survey report for you as well.

Your lawyer will review the title report and other sources to ensure that there are no outstanding liens, judgements or city violations on the property.

If you are buying a condo or co-op apartment, then your lawyer will also review the building’s annual financial statements, the original offering plan, any amendments to the offering plan, the building’s operating budget and the board meeting minutes.

Sign the Contract

It’s time to sign the contract and hand over your earnest money check once you and your lawyer have completed due diligence. The good faith deposit is typically 10% of the contract price, and is delivered along with the signed contract to the seller’s attorney for counter-signature.

Finalize Your Financing

Work with your lender to finalize the underwriting process as soon as possible. After you’ve provided all of the required documentation, you should receive a mortgage commitment letter.

Close Your Deal

At closing, your lawyer will guide you through all the documents you’ll need to sign, and he or she will also monitor the flow of funds to make sure all checks have been properly distributed.

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[flgator]

What if my appraisal came in at 377k and the contract price was 380k with Contingency to Appraisal and the inspection repair estimates were $3, 230. When I told the seller she replied with $378, 500 and I countered with $375, 500. She said she would review it. None of us have an agent involved. Isn't this still a great offer for the seller given that there aren't any agents involved?

[justinpruett]

This video was made under the assumption that I know more than I really do