Skip To Content

6 Tips To Buy a FSBO Listing

Six simple tips to avoid trouble when buying a for-sale-by-owner home.

How do you buy a home when it’s been listed by the owner? A lot of people are trying to save money by listing their own homes in this market. You can save money by buying a for-sale-by-owner (FSBO) home, but you can also get yourself into a lot of trouble if you aren’t sure what to look for. With that in mind, let’s go over some of the things you need to be aware of when buying FSBO:

1. Pricing. Many FSBO sellers price their homes based on how they think their homes compare to their neighbors’. That can be tricky since selling is an emotional process, so they often perceive their homes as being worth more than they might actually be.

2. The appraisal. Even if you think the house is perfect for you, do some research on it. Unless you’re paying in cash, an appraiser from the bank will come out for your appraisal. If that appraiser comes back with a lower value than you’ve agreed to pay, it can mean trouble.

You’ll either have to talk the seller down to the lower price, or the bank will make you pay the difference. If you went under contract for $250,000 but the home appraised at $230,000, the bank won’t give the money to you even if you’ve approved for that amount. The bank is basically buying the house, so they don’t want to let you overpay.

3. Negotiate. The appraisal, for example, is something you can negotiate. When you write up the purchase agreement, you can ask the owner to pay for the appraisal if it does come in low.

“Buying a FSBO home is all about doing your homework.”

4. Disclosure. If the owners aren’t using a Realtor, they probably haven’t filled out all of the property disclosure forms. When a seller lists with a company, these forms are required and filled with every issue the seller knows about the home.

5. Inspections. The home inspection is so important for FSBO homes. You might trust the seller, but they may not be aware of the attic full of mold, the foundation issues, etc. The home inspector will uncover these things for you. Depending on the size of the house, it might cost up to $400, but it will be the best $400 you’ve ever spent; it could save you tens of thousands of dollars in future repairs.

6. Ask questions. Why are they selling; why do they need to move? If someone needs to move because of financial problems, they might be more likely to forget to mention something about the house. I’m not saying all FSBO sellers are dishonest, but it’s in your best interest to figure out what has happened in the past.

The main thing is that you need to do your homework upfront. All of these issues can be negotiated earlier in the process and save you a bunch of money. During negotiations, you’ll also learn a lot more about the seller and how much you can trust them.

If you’re thinking about buying a FSBO home or if you’re in the middle of one of these deals, feel free to contact us with any questions you have. Don’t forget to subscribe to our YouTube channel, and if you have any real estate questions, give us a call or send us an email. We’d love to hear from you.

Trackback from your site.

Leave a Reply