Homes for sale by owner

A home for sale by owner (FSBO) does not require a great deal of explanation. It is simply a home that is being sold directly by the owner. There is usually no real estate agent being used in this type of home sale.

Usually neither the buyer nor the seller is very familiar with the mortgage process. Getting your mortgage professional involved as soon as possible is important. Although he or she cannot provide a realtor's service, he or she can assist with ordering title commitment, ordering an appraisal, and providing a general calendar when steps should be accomplished.

Some FSBO properties may be overpriced or under priced due to lack of knowledge about the market area. An overpriced property may cause problems when trying to secure financing.

Since there is no agent representation in an FSBO transaction you should be extra careful to make sure you are fully protected as a buyer. Always use the services of a licensed and professional property inspector to make sure the house you are buying is not full of defects.

When buying a home that is being sold FSBO, For Sale By Owner, it is a good idea to have an attorney or at least your mortgage professional look over your sales contract before signing the agreement to purchase the home. A poorly written purchase agreement can cause unnecessary expenses on your behalf. Also, ask your mortgage professional if the value that the home is being sold for seems pretty consistent for the area you are looking to buy the home in. Too many times FSBO's try to sell their home for too much because they have no professional training in the area of home valuation. Many consumers think that because a home is being sold without a Realtor that the home will be priced correctly or under-priced, and they will be able to receive a great deal due to the Seller not having to pay any Realtor fees. While this may be the case sometimes, usually for sale by owner homes are listed to high and the homes will not appraise for the selling price.

If purchasing a FSBO home, realize that the seller is saving the real estate commission and may be willing to "share" that savings with you either in reduced price or payment of some closing costs, etc. Be sure to negotiate!

Because the property isn't listed through the MLS, it can be difficult to determine the amount of time the house has been for sale.
If a FSBO has been on the market for 6 or more months it may contain some material defects or may be over priced.

» DISCLAIMER: The information contained in this article on 'Homes for sale by owner' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.