For Sale By Owner: Three Purchasing Tips
There are myriad benefits to listing a home through a real estate agent, but many sellers prefer to go it alone rather than pay a realtor’s fees. With this type of “For Sale by Owner” transaction, sellers will lack the marketing resources of a professional realtor, but they are likely to save money in the process. Although it may feel risky to some buyers, with the proper knowledge a “For Sale by Owner” property can be a tremendous opportunity for a buyer, too. Follow the tips below if you’re considering a home purchase directly from a seller.
Get Mortgage Preapproval
The ability to present a preapproval letter from a licensed mortgage lender can help a prospective buyer in several ways. First, it removes any question marks a seller may have about your creditworthiness. After all, no seller wants to enter into a purchase process with a buyer who ends up backing out for lack of financing. Second, it can be used as a negotiating tool if you must compete with other interested parties. A preapproval letter tells a seller you’re a step ahead of the game and may be able to close more quickly than a buyer who is awaiting approval.
Insist on a Home Inspection
A home inspection takes time, costs a few hundred dollars, and may not feel necessary if you can’t see any major problems with the home. It’s the potential for hidden issues, however, that make this a vital step in the home buying process. A licensed home inspector can save you from entering into a costly deal with long-term consequences, both financial and health-related. An inspection report will reveal any troubling issues with the structure and foundation of the home, carbon monoxide and radon levels, potential electrical dangers and much more.
Know the Home’s Value
One of the things that makes home valuation tricky in a “For Sale by Owner” model is that the seller is emotionally invested in the home and, thus, may be prone to overpricing it for sale. It’s your job as a prospective buyer to make a fair offer while simultaneously protecting yourself from a bad investment. Use real estate search engines and county auditor websites to determine the sale prices of comparative homes in the same neighborhood. These prices are a great indicator of what your prospective home is truly worth in the current market.
If you find yourself interested in a “For Sale by Owner” property, don’t shy away from taking a look. Do your homework and follow the tips above to help you find the home of your dreams.
Image via Flickr/katherinealix