Recently looked at a house that is FSBO. Wife is interested. This would be my first time entering such a scenario for a house. Has anyone done so before as a buyer? If so, is there any advice you can share? Thanks..
I say that because, personally, I was a very diligent and focused home seller/buyer and I did 90% of the work myself.
That being said, from the buy-side you should do your homework through Zillow/Realtor.com and look at the comps - dont forge to shave 4-6% off those prices because the fees are obviously included - mind you the seller is looking to get THOSE values thinking thats what their house is worth, but its obviously not so youll have to work that a bit.
I would recommend getting a strong lawyer that deals with residential real estate (dont use your family lawyer just because you are cool with them). Interview MULTIPLE inspectors - make sure youre getting a quality inspection. Pay for the radon tests and any other add ons - totally worth it.
Since its FSBO you can probably push them for additional inspectors. Something I like to do when I was searching for a home and was serious was express my interest in the home and say that I need my "family-friend" and contractor to come in and help me plan potential renovations so I get a better Idea of my all in costs. That way you have another trained (and usually free) eye that can check the major aspects of the home and flag potential issues.
I am sure you can go online and get an inspectors check-list and do the review yourself looking at the home as well.
Home buying is a horrible experience but well worth it in the end, good luck!
is essentially to help you find where you want to live, identify houses in that area, show you the houses and write up a form contract. If you have found a house you want, you want already taken care of most of the realtor's function
When buying as FSBO you will have to just negotiate a price with the seller and then each engage attorneys to negotiate and draft the contract.
You should be able to get a below market costs as a result of realtor commissions not being paid by the seller.
Agree 100% with the above. Do your homework. Get EVERYTHING tested. Pipes, previous oil tanks sweeps,radon, mold, full inspection etc. I live in an area where knockdowns are common and the seller was adamant about selling to a builder if I found anything wrong but I was fine with that. You should be fine without a realtor but line up a solid real estate lawyer at the same time to help you with the steps.
The opportunities for a good broker to add value vary widely, depending on where you are. Of course, a bad broker is useless in any state.
One caveat about FSBOs is that you might not actually save money. Owners often overvalue their own properties, may be less motivated to sell below their expected price, and are generally reluctant to share much of their commission savings with buyers. Obviously, your mileage may vary. Just don't assume that the price will be lower because there's no broker skimming 5-6% off the top.
WRT attorneys - I can't imagine doing any kind of deal without lawyers on both sides. Again, though, their roles and responsibilities vary a lot from state to state.
I once represented a client who was purchasing a FSBO and the owner was an attorney in like California or somewhere (it was the house he grew up in and his parents had recently passed away) and to save money he represents himself. The fights ended up being too much for my client because he was trying to slip in provisions that no local attorney would ever put in a Contract. You don't want seller's attorney to give you a Contract so heavily titled in favor of the seller.
We just happened to see the sign while driving around with our real estate agent. Our agent called the owner and arranged for us to see the home. We told her that we'd pay her 3% commission if the seller refused. But the seller ended up paying.
We did an inspection and found several things we wanted fixed - over 5k worth of problems in an 85K house. If I had been dealing with the seller directly, I don't know if we could have made the deal happen. But the real estate agent was our go-between and got everything worked out.
This was in FL and we did not use attorneys. The real estate agent took care of paperwork.
is essentially to help you find where you want to live, identify houses in that area, show you the houses and write up a form contract. If you have found a house you want, you want already taken care of most of the realtor's function
When buying as FSBO you will have to just negotiate a price with the seller and then each engage attorneys to negotiate and draft the contract.
You should be able to get a below market costs as a result of realtor commissions not being paid by the seller.
Depends on where you live. While a few states (like New York) require each side to have an attorney, most do not. In most states, real estate agents handle most of the duties that a lawyer would. Attorneys working for the title company often handle the closing.
OP either needs an attorney or agent to handle his interests.
If you're counting on Zillow or Realtor.com for comps, good luck. Their estimates can be radically off, and most FSBO owners have an inflated sense of their home's value.
Davek-Use an agent. Most sellers are willing to work with a buyer's agent. It costs you nothing. The agent will prepare the contract, find you legit comps, negotiate and handle all the issues that will absolutely come up in a real estate transaction that sink most FSBO deals.
Bought and sold. Just got an escrow and title company in CA to help with the paperwork. Do the inspection and if there is an issue you work directly with the seller.
The big issue is price. A Realtor can certainly help here if you're a new buyer and also don't really understand pricing.
That's not always true with the the buyer agent. It could cost you the house. It could cost you more money.
2 offers on the table. One with an agent. One without. Which one would you take as the seller? It would be the offer without the agent.
The seller may have a bottom line he wants to net. If he does and he's firm on it, you will have to pay more to get to his number because of the agent cost.
They may take the other offer at first. But the buyer should leave his number so the seller can call him back after that deal falls apart.
You were fortunate in your dealings in CA. But for uninitiated buyers, is it really a good idea to make the largest purchase of your life without qualified representation? There are so many moving parts to a real estate contract, from financing to inspections to time is of the essence to performance. I'm surprised so many here are willing to forego an agent for such an important event.
I say that because, personally, I was a very diligent and focused home seller/buyer and I did 90% of the work myself.
That being said, from the buy-side you should do your homework through Zillow/Realtor.com and look at the comps - dont forge to shave 4-6% off those prices because the fees are obviously included - mind you the seller is looking to get THOSE values thinking thats what their house is worth, but its obviously not so youll have to work that a bit.
I would recommend getting a strong lawyer that deals with residential real estate (dont use your family lawyer just because you are cool with them). Interview MULTIPLE inspectors - make sure youre getting a quality inspection. Pay for the radon tests and any other add ons - totally worth it.
Since its FSBO you can probably push them for additional inspectors. Something I like to do when I was searching for a home and was serious was express my interest in the home and say that I need my "family-friend" and contractor to come in and help me plan potential renovations so I get a better Idea of my all in costs. That way you have another trained (and usually free) eye that can check the major aspects of the home and flag potential issues.
I am sure you can go online and get an inspectors check-list and do the review yourself looking at the home as well.
Home buying is a horrible experience but well worth it in the end, good luck!
When buying as FSBO you will have to just negotiate a price with the seller and then each engage attorneys to negotiate and draft the contract.
You should be able to get a below market costs as a result of realtor commissions not being paid by the seller.
One caveat about FSBOs is that you might not actually save money. Owners often overvalue their own properties, may be less motivated to sell below their expected price, and are generally reluctant to share much of their commission savings with buyers. Obviously, your mileage may vary. Just don't assume that the price will be lower because there's no broker skimming 5-6% off the top.
WRT attorneys - I can't imagine doing any kind of deal without lawyers on both sides. Again, though, their roles and responsibilities vary a lot from state to state.
Yes, you want an atty looking out for only your interests
We did an inspection and found several things we wanted fixed - over 5k worth of problems in an 85K house. If I had been dealing with the seller directly, I don't know if we could have made the deal happen. But the real estate agent was our go-between and got everything worked out.
This was in FL and we did not use attorneys. The real estate agent took care of paperwork.
When buying as FSBO you will have to just negotiate a price with the seller and then each engage attorneys to negotiate and draft the contract.
You should be able to get a below market costs as a result of realtor commissions not being paid by the seller.
Depends on where you live. While a few states (like New York) require each side to have an attorney, most do not. In most states, real estate agents handle most of the duties that a lawyer would. Attorneys working for the title company often handle the closing.
OP either needs an attorney or agent to handle his interests.
Davek-Use an agent. Most sellers are willing to work with a buyer's agent. It costs you nothing. The agent will prepare the contract, find you legit comps, negotiate and handle all the issues that will absolutely come up in a real estate transaction that sink most FSBO deals.
The big issue is price. A Realtor can certainly help here if you're a new buyer and also don't really understand pricing.
2 offers on the table. One with an agent. One without. Which one would you take as the seller? It would be the offer without the agent.
The seller may have a bottom line he wants to net. If he does and he's firm on it, you will have to pay more to get to his number because of the agent cost.
You were fortunate in your dealings in CA. But for uninitiated buyers, is it really a good idea to make the largest purchase of your life without qualified representation? There are so many moving parts to a real estate contract, from financing to inspections to time is of the essence to performance. I'm surprised so many here are willing to forego an agent for such an important event.