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Buyer's Help Guide

The following info can help you in buying a property from a FSBO - It's a very simple process and one that can save you thousands of dollars!

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1. Before starting your search for that perfect house, take time to discuss what you're looking for with your spouse or partner. Make a list of "must have" features, and also "would like, but can live without" features. After you've looked at a dozen or so properties, re-evaluate your criteria. Often priorities shift with time.

2. Before you start looking have a realistic idea of how much you can afford (most lenders will pre-qualify you for free). This important information will save you time, but also will avoid needless disappointment later if you find the perfect house you cannot afford.

3. Don't sign a contract with an agent that locks you into looking with him/her, or guarantees them a commission even if you find the house yourself! Specify, instead, that a commission will be paid only if you buy a property shown to you by that agent. This enables you to look with others, and also at For-Sale-By-Owner properties, at your own convenience. Remember buying a house from a FSBO can save you thousands of dollars. Remember when you hire an agent to list your house you have to inflate the price to pay their high commission. Buyers can save a bundle purchasing from a FSBO.

4. If you do have an agent don't bring him/her with you to look at FSBO properties, or bring them into the picture when it's time to draw up a contract, unless you are willing to pay their commission through either a higher sales price, or out of your own pocket. Otherwise, you may risk losing the house. (note: your lawyer and banker can help you if you aren't sure of the process. Don't tell your agent you are looking at FSBO's, plus never give them the address of the FSBO you are planning to view, otherwise they will invariably meet you their. Once they are at the house, they expect their commission, even though they did nothing to earn it or find the house for you. You MUST be careful when dealing with an agent.

5. If you find the house you want to buy before you've sold your home, and the seller is reluctant to sign a contract with you with the contingency that you sell your home first, you may draw up a contract that allows the seller to continue marketing and advertising the property yet gives you the "first right of refusal" should they receive another offer. This way you will be notified immediately if the seller has another offer, giving you an opportunity to re-offer if necessary. Another option is to put a non-refundable deposit on the property. This shows the sellers that you are serious about buying their property.

6. If you sell your house before finding a new home, make sure you specify a certain amount of time given to you before moving out. You can make the sales contract contingent upon you, the seller, finding suitable housing - this sounds good, but often the buyer is anxious to move into the house and he himself can't give you all the time you need to look for suitable housing, this clause can cost you the sale of the house! We have heard stories of people frantic to find a home under pressure, and even having to rent after the closing, because they sold first. Remember, the seller is legally bound to sell once the contract is signed.

7. When presenting an offer, be courteous and respectful of the seller. In general, avoid criticizing the property with statements like "we don't about the extras or the color of the new carpeting, and therefore will have to replace it." This will not justify a lower offer and may possibly insult the sellers, decreasing you chances of their accepting your offer. Always remain on friendly terms with the sellers while negotiating, it makes the buying process more enjoyable.

8. If you think the property may be overpriced, yet the seller refuses to take a lower offer -- make your offer contingent upon the property appraising for the selling price or higher.

9. Request a walk-through inspection of the house shortly before closing. It's great if the seller has moved out and the house is empty this way you can spot faults that were covered up with furniture, wall coverings, etc. It is far easier to request compensation for necessary repair work before the house is sold than afterwards.

10. Request that the seller complete a property disclosure form, stating the condition of all aspects of the property, before you make an offer. (If the seller doesn't have a form, you can purchase one at a bookstore or get one off the Internet, or I can supply you with one at your request - for a small S&H fee, just send an e-mail). The seller is legally bound to be truthful in reporting the property's condition.

11. Make the time frame of your offer short (24-48/hours) so the seller has less time to "shop the bid" among other interested parties, or to accept another offer. Also, make the deadline time between 6-8p.m., so you have time left in the evening to counter-offer if necessary! Many deadline times are at midnight which makes no sense at all. Most people are asleep by midnight and don't feel like negotiating contracts.

12. Put everything in writing. Your sales contract should spell out whether the appliances (washer, dryer, stove, refrigerator, etc.) stay. If everything is in writing, you will have no surprises and enjoy the home purchasing experience.

13. Buying directly from the homeowner (FSBO) transaction will SAVE YOU MONEY - the cost of having to pay for the real estate commission. The 6-7% commission charged by the agent will often times be added to the total cost of the home. When this is done, the buyer will end up paying the commission. Buying a home in a "For Sale By-Owner" transaction will cost you less money and you'll get more home for your Money.

14. When you deal directly with the homeowner rather than through a third party you will SAVE TIME. Communications is more direct, faster and to the point with only buyer and seller involved. You will get more accomplished in a shorter length of time which means you can move into your new home sooner!

15. Some people think purchasing real estate from a FSBO is difficult. This myth is far from the truth. Purchasing "For Sale By-Owner" is EASY TO DO! Once you and the homeowner agree upon the price and your forms are filled out, turn everything over to a Title Company and they will take care of the rest. This is the same thing that happens when you use a real estate agent, except there are no commissions to pay. Your Mortgage Broker can usually suggest a good Title Company.