When you're searching for your dream home, it's a good idea to explore all your options. This includes not only traditional homes for sale with a real estate agent, but foreclosures, short sales, and even for sale by owner (FSBO) homes. Buying a FSBO home can be a little more complex than some of the other options, but it also comes with the possibility for more flexibility. If you're thinking about placing an offer on a FSBO home, there are a few things you should know.
You'll Still Need an Agent or a Lawyer
When a person decides to sell a home without help from a real estate agent, this does not mean you need to buy without an agent. In fact, it's still recommended that you have help from an experienced real estate agent or a real estate lawyer throughout the transaction. You will likely need to pay your agent's commission if you go this route, but it will be worth it to have the help from an experienced professional throughout this often complex process.
You Should Never Forego an Inspection
Unless the home is being advertised/sold in "as-is" condition, it's always in your best interest to require a home inspection as part of your offer contingency. If a seller is hesitant to let you have an inspection done on the home--especially on your own dime--it's time to walk away from the transaction.
You'll Want to Obtain a CLUE Report
When buying a FSBO home, it's also in your best interest to obtain a CLUE report with permission from your seller. This report will alert you to any major insurance claims or other damages on the home within the past five or so years, which can protect you from purchasing a money pit. Much like a home inspection, if your seller refuses to let you obtain a copy of this report, it's probably best to walk away.
A Pre-Approval Shows You're Serious
While a pre-approval on a mortgage may not be required when making an offer on a FSBO home, having one can be a great way to show a seller that your'e serious--and could give you some extra leveraging power if there are additional deals on the table.
There are many reasons to consider purchasing a FSBO, but it's important that you know what to expect from the process. From there, you can execute a successful home purchase!