Tuesday, February 16, 2010

How to Buy from an FSBO Seller

Some buyers feel nervous talking to and negotiating with a "By Owner" seller.  But remember FSBO sellers are ordinary people like the rest of us, they want to sell their home and are happy to talk to you.  As a buyer you can make the process easier by taking care of these five details before you call a seller.

1.  Get pre-qualified.   It is more important than ever in this market to talk to your bank or mortgage broker and make sure you will qualify for a the value of the home you want.   Put yourself in the seller's shoes - they don't know you or your financial situation.  By putting them at easy with a solid pre-qualification you will improve your standing as a buyer and make negotiations less stressful for both parties. Check what local mortgage rates are currently for your area.

2.  Decide if you are interested.  It sounds simple but often buyers don't know anything about a house before they start talking with a seller.  This can increase uncertainty which makes it hard for both sides.   Take the time to look at the homes full listing online and look at comparable listings to determine if you think the price is fair or in the ball park.

3.  Know your market. Is the seller offering a bargain?  Have they over priced?  These are all questions you can get a handle on before talking to them by reviewing comparable in the neighborhood.  One way to find out is to check comparable home prices have sold for recently.

4.  When you contact the seller, relax.  Even though it is a big purchase it is important to be yourself when talking to the seller.  They are probably as anxious as you and by knowing what your want and being calm you can put them at ease.  Remember when you first talk to them to cover the basics, you name, phone number so they can find you again then set up a time to see the house.  Ask if you can come back a second time, you'll get to know the house better and the sellers also.

5.  Make an offer. Do it directly yourself, or hire an agent to do it for you. When you negotiate the price and terms, remember, always keep it civil. Once you've come to a basic agreement, determine how the paperwork is going to be handled. Perhaps you'll want your attorney or agent to do it. Or maybe the sellers have already made arrangements with someone they know. Open escrow together, and go through the closing procedure.

It's not that hard. And, you could save a bundle if you've done your homework!"

For more on buying or selling a home including great tips from Robert Irwin, the leading real estate writer in America, visit the Owners article library.