How To Purchase A House For Sale By Owner
A lot of homeowners who put their properties out in the market are going the for-sale-by-owner (FSBO) route. One of the major reasons for this is to eliminate the middle man, the real estate agent, who can charge a substantial amount for his services related to the sale of a house including property valuation, legal concerns, property negotiation and a slew of other paperwork. Certainly, a good deal of the work falls squarely on the shoulder of the homeowner selling the property, but the payback, in the form of a few thousand dollars more in his or her pocket, can be a bit too hard to resist.
One of the major qualms some people have about FSBO properties is that they may be overpriced — well above the fair market value of the property. Some buyers have voiced concerns about incomplete paperwork and other details about the property including its precise dimensions. Others also fear that the selling process may not go as smoothly as a transaction handled by a real pro. Finally, there are also concerns about these sellers being overly attached to their properties, making them hard to deal with.
While some of these concerns may be valid, every homeowner selling his property is unique. As such, it should not deter a potential buyer from making a move. Here are a few tips to help you purchase a house for sale by owner:
The first thing you need to do is to ask the seller’s permission for a Comprehensive Loss Underwriting Exchange (CLUE) report. While sellers are mandated by law to give a full disclosure of the condition of the property that is put out in the market, a CLUE report details certain issues like water-related claims and the presence of molds that the seller has not disclosed. Additionally, insurers often use the report in reassessing a property’s coverage and rates.
Buyers can benefit from obtaining a competitive market analysis (CMA) which outlines how similar properties are in the area in which the FSBO property is located. Such reports can be obtained from real estate agents. Alternatively, prospective buyers can obtain a green sheet from the area’s deeds office. A green sheet is used by local authorities for property taxation purposes. If you opt to secure a CMA, note that the data included in it relates to homes that have been sold by real estate agents and not FSBO properties. Nonetheless, it can be a perfect gauge for the true value of a property.
Finally, whether you are buying through a real estate agent or directly from a homeowner, it is a good idea to avail of the service of a third-party inspector that will point out potential headaches once you purchase the property you are eyeing. With issues like faulty electrical wiring and moisture levels pointed out to you prior to final negotiation, you can avoid a possible drain on your budget and you can use this to leverage for a better price from the seller.