Buying a home from the owner?

DH and I are looking at a small house (1,200 sq. ft) that is being sold by the owner. I have the understanding that we can use a realtor, but we don't have to. Anyone go through this experience before?

Re: Buying a home from the owner?

The only risk of not using a realtor is not having access to comps when making offers. If the house is a FSBO (for sale by owner), sometimes the price is higher so you have to do the research yourself for finding comparable sales.

One of my friends made this mistake a few years ago when looking at a FSBO, they offered 5K below asking which was immediately accepted. We had an agent run the house for comps and the house was over priced by about 40K so they would have over-paid.

The upside is that if another buyer makes an offer on the same house but they used an agent, the owner may have to deal with cutting that agent a commission. So in essence, your offer may be more attractive because you arent being represented by an agent who might be annoyed by not getting paid their commission.

Re: Buying a home from the owner?

We bought our house for sale by owner. Our real estate agent actually told us about it but couldn't show us. We felt bad that she was working with us but it turned out to be the right house for us. We paid fair price, less than assessed value. Just be smart as pp said and know the comps in area. No issue dealing directly with seller for us. Then for paperwork you have real estate attorney anyway...

Re: Buying a home from the owner?

Re: Buying a home from the owner?

Buying a home from the owner?

WHen we bought this winter we looked at a fsbo. Our realtor said they are all crazy. She seemed very nice and we loved the house. We put in an offer of asking price and asked her to pay closing costs up to $5k. She refused and said she would only do it based on a new asking price of 10% more. The house was already at the top of our price range and the top of assessed value and since we were doing a VA loan we couldn't do it. Then she said fine we'll do asking and $1k for closing but if you do an inspection I won't fix anything. Again we explained we can't do that. VA is very strict. SHe was fing nuts. SHe kept calling and calling our agent. Finally 2 months later after repeatedly saying no we're out they are closing on a different house she stopped calling.

Know the comps, know what it's assessed for and get a good inspection. Don't let your heart take over. It's a lot easier to let something "slide" when you meet the owners. Remember this is a business transaction you shouldn't have any feelings for the owner at all and that is hard to do if they are selling.

Buying a home from the owner?

We bought our house FSBO and it was listed lower than what it would have been if listed with a realtor.

It ended up working out nicely for us but, there were times we wished we had a realtor because we had a million questions. Thankfully we had a family friend who is a realtor in the area to point us in the right direction.

Re: Buying a home from the owner?

Message edited 2/8/2016 2:24:48 PM.

Re: Buying a home from the owner?

Most FSBOs are willing to (and expect to) work with buyers' agents. Typically they will either offer to pay the buyers' agent a percentage, or your buyers' agent can build their fee into the offer (so that, either way, it comes out of the seller's proceeds). So I wouldn't assume that just because a house is being sold by owner that the seller is unwilling to deal with a buyer's agent.

While yes, you will have an attorney, the real estate attorneys typically handle the preparation of the contract and the closing. But they never see the house, so they are not going to advise you on what price to pay, they won't attend the home inspection or the bank appraisal, or the final walk through of the home. Those are parts of the transaction during which many buyers prefer to have an agent (to guide them, advocate for them, etc.).

This is also why most sellers choose to hire an agent to sell their home and represent them in the sale... while yes, using a seller's agent costs a fee, most sellers gain more by having one (and studies show that sellers who have a listing agent net more than sellers who sell themselves, even after the fee is factored in).

Re: Buying a home from the owner?

We bought our house from the owner without an agent. I think we ended up getting a better price because she was getting ready to relist with an agent wnd was happy to avoid that process and the fees and just sell quickly since her house was on and off the market with multiple agents for 2 years. But I wonder how the process would have been different if we had an agent. Our nosy neighbor across the street is an agent and came over when we first moved in and introduced himself, told us he was an agent, that he was in our house many times and that we got a great deal. Hahaha but who knows

Message edited 2/10/2016 5:28:51 PM.

Re: Buying a home from the owner?

We bought our home directly through the owner (which was a shame as we loved our agent, but found this through a family friend). The experience wouldn't dissuade me from doing it again if we were to move, but there were definitely things that became more challenging as we interacted directly with the seller/owner. Stuff can sometimes be taken personally and when there isn't a go-between such as agents, it can be a tough situation while walking a fine line. The buying process seemed pretty much the same, so if you find something without using a realtor the end result is the same, you get a house!