How To Buy A House For Sale By Owner
The process of buying a house can feel overwhelming in general. To make matters less confusing, here are the five main steps most people will follow to buy a home that’s for sale by owner.
Remember: If you’re thinking about buying a FSBO home, make sure to consult with a real estate professional.
Step 1: Get Approved For Your Mortgage
With any house purchase, you’ll first need to get approved for your home loan so you know exactly how much you can spend. You can apply online with Rocket Mortgage®. If you’re approved for the mortgage, you’ll receive an approval letter from your lender that you can use to get out there and start shopping. Some home sellers may not let people in the door without preapproval from a lender.
Step 2: Consider Working With A Buyer’s Agent
Once you’re approved for your mortgage, you can engage the services of a real estate agent or REALTOR®.
A buyer’s agent can be beneficial even if you already have a specific home in mind. With a FSBO transaction, your agent will negotiate on your behalf and handle the complicated paperwork for you. This is crucial when the seller is doing their own paperwork because your agent will make sure everything checks out, so you don’t run into any problems.
The seller usually pays the commission fees for the buyer’s real estate agent, so working with a buyer’s agent can offer a huge opportunity with very little downside. Just make sure the homeowner agrees to pay your real estate agent’s commission as part of the purchase agreement.
Step 3: Take An In-Depth Look At The Home
If you’re working with a real estate agent, they can usually arrange showings for you through the multiple listing service, but some FSBO homes won’t be listed there. Instead, you and your agent might have to search for open houses or listings by word of mouth, with a different platform. An established real estate agent may also hear about FSBO homes through their personal networks.
If you’re not using an agent, you can get a showing by contacting the seller directly. If the seller is present at the showing, it’s a great opportunity to ask questions and get to know the home and the area.
Step 4: Make An Offer
When you find a home you like, it’s time to make an offer. If you’re using a real estate agent, they can offer opinions on how the home is priced so you know whether you should bid below, at or above the listing price.
Step 5: Close On The Home
Once you’ve received final approval on your mortgage and completed all the necessary inspections, it’s time to close. This is when the ownership of the home will officially be transferred to you.
At closing, you’ll pay your down payment and closing costs. If you’re immediately taking occupancy of the home (in other words, the seller hasn’t negotiated to stay in the home past closing), you’ll get the keys to the house.
