Homes for sale by owner (“FSBO”) transactions are growing in popularity due to the recovery of the housing market. To avoid the cost of paying a commission, many homeowners attempt to sell their properties without help from a real estate agent.
As a buyer, it is crucial to comprehend the process on the path to the purchase of a home, particularly in a FSBO transaction.
Steps in a FSBO transaction
House hunting is an involved process, and particularly so if you are dealing directly with an owner. As a first step, if no brokers are involved in the process, Buyers should seek the guidance of a trusted and knowledgeable real estate attorney. The attorney can guide you through the essential steps from start to finish.
At the outset, as with any purchase, you have to determine if the house is a fair price for the area. You may want to engage an appraiser to guide you in your decision making, and your attorney can provide you with local references to assist you.
You should also perform certain due diligence tasks to determine the status of certain critical aspects of the house, including:
- What is the age of the house?
- Are there recent upgrades or replacements to system components (i.e. plumbing, electrical, HVAC, roof)?
- Can the seller provide maintenance records for key components?
As with any purchase, it is critical that you perform a full property inspection, and the results of this inspection should be a contingency to your purchase.
Once you are satisfied with the results of your inspection (or have negotiated with the seller any issues associated with the inspection), you can finalize the terms of the transaction with a binding contract, which will incorporate the final terms of the deal, including a financing contingency (if needed), title clearance, inclusion or exclusion of personal property items, and specific and critical dates.
Gregory and Adams, P.C. has seasoned attorneys to assist buyers in every step of the process. As this may be the biggest investment you have or will make, reliance on trusted advisors is key to ensuring a smooth and worry free transaction.