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without getting too much into it, I was wondering if anyone could share any advice, warnings, tips and tricks to dealing with buying a FSBO house. I'm still early on in my search but have found quite a few to call on for prices and information and one house that I'm in love with.

While I'm not exactly thrilled with subdivision living, I've come to accept that I probably won't find what I want and can afford anywhere else... but am very much still looking. Most neighborhoods around have cookie cutter identical homes, no trees and tiny yards. A few of the older neighborhoods have nice sized yards but the houses are old and not in the location I want.

I found a house today - 3/2 and a view through the fence from the street showed a TON of land behind the house. My first assumption was that I would own a tiny bit and would just get to look at the big field behind the house. Afterall - it IS in a subdivision. The sign though, offered 2.4 acres. I was a little surprised and didn't believe it. Especially for the price. However, a deed/property search online showed the property lines. Its HUGE! Very long and backs up to a wooded area and a creek!! Of course I'm wondering what's wrong with the house that it isn't selling (it was just reduced by $7K too).

I guess my big fear is that even if not this house, I might find another and don't want to screw it up. How do you deal with the seller? How do you know everything is being done properly and legally? How do you protect yourself from being taken advantage of? Could I still in theory go through a realtor to keep all of my stuff straight?
 

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If you are looking to buy a FSBO house, you can still get yourself a realtor to help you with all the legalities, and keep in mind you will be paying realtor fees. It's worth it though in the long run to do so!

Good luck on your house hunt...it's fun, isn't it? :D
 

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I don't know much but I do know that you need to ask plenty of questions, about why they are selling, if there are any defects that you should be aware of (they by law in some areas need to fill out a Transfer Disclosure Statement, ask to see it), how long the house has been in the market, look around and make sure they haven't overrpiced their house for the market they are in. Hire your own home inspector, not from one hired or recommended by the seller of the home and have an attorny or a realtor look over the contracts before you sign them.

it may not be much help but its all I know from listening in on my parents during every move we made when I was younger. We were like gypsies. :roll:
 

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Be sure to have the property inspected thoroughly. The owners must reveal any problems not visible to the naked eye. Have the furnace checked also. Your inspector will know if there are signs of dampness in the basement, or if the roof is in good condition, an infestatation of insects, etc. If there are major problems, the owners will have to do the repairs or lower the price.

Of course, you'll want to ask if there is city sewage and how much the utilities cost monthly. I save my utility bills, not that I intend to move, but out of habit. Good luck. :) Property is usually a good investment, and it's a buyer's market right now!

I would definitely have an attorney's guidance. You'll need one anyway.
 

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I would recogmend the opposite. Having built and sold over 75 houses Ive had experiences with realators and without and selling myself. The only thing a realator does is fill out a canned contract and send on the contract to a title company. The title company does all the legal aspect of the deal to get it sold. Ive only dealt with 2 realators in 23 years that was honest and worth using. Dont waste your money on them.

You can get a title company yourself to handle the closing. They will inform you what paper work they need from you. A title company can give you a contract to fill out if you need one. The sellers should have one also.

On the canned realator contract there is a place where they have to disclose any issues with the house. Doesnt mean the seller will be honest but it can release you if you find out they were hiding issues on the house. Also hire a good house inspector. Havent met to many good one of those either. How old is the house you are considering buying? Is this a production home or a custom built home? That makes a difference also in the quality of the home.

You will have to get an appraisal on the house for your bank loan. This will tell you the true value of the house. Im sure the FSBO sellers got free market comparison estimates as to the house's worth. Doesnt mean you cant offer less. This is a buyers market and the best time to buy. There are so many repos on the market right now and prices keep dropping so dropping a house $7K to move it isnt unusual. Plus they arent paying a realator fee of 7% which they can take off money on the front end to make the house price more competative.

If you have other questions you can PM me if youd like. Ive seen it all! :? Good luck on your future new home.
 

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I am wondering about buying a house now, myself, so I will be watching this thread very closely.
Jessie, it sounds like you are looking for the same kind of house as I am: a 3/2 on a lot of land, with preferably at least a block distance to the nearest neighbors.
I know it is a buyers market right now.
I was wondering if there are government incentive programs for people who are disabled. I was also curious about HUD homes, and homes that are involved with a rural development incentive program that I was reading about on the usa.gov website recently.
 

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With that much land make sure that you find out what the yearly taxes are- they may be cost prohibitive for you. Also, I think you said it had a stream. This may put you in a higher flood category, so you will need flood insurance.

John...here's a link that might help you. http://www.hud.gov/buying/loans.cfm
 

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Mitts & Tess said:
I would recogmend the opposite. Having built and sold over 75 houses Ive had experiences with realators and without and selling myself. The only thing a realator does is fill out a canned contract and send on the contract to a title company. The title company does all the legal aspect of the deal to get it sold. Ive only dealt with 2 realators in 23 years that was honest and worth using. Dont waste your money on them.
For one since I was a realtor for 2 yrs, unless your the one selling the home you dont spend the money. Two- If your still looking for homes and cant find what you want it would help to have a realtor. But if this is the house you want then you can do this buy your self. I have some forms and checklists if you would like me to email you what I have from my real estate days, they are still all up to date forms. Any advice you would like from a realtors point I can try and help you with if you would like. Heres my email if you want to talk:

[email protected]
 

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I think if you aren't going to get a realtor, you should at least have a lawyer present to go over the contracts. Paying a small fee for a lawyer and/or realtor is worth it, in my opinion.
 

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Heather102180 said:
I think if you aren't going to get a realtor, you should at least have a lawyer present to go over the contracts. Paying a small fee for a lawyer and/or realtor is worth it, in my opinion.
This is good advice. Do have a lawyer read over the contract for you and advise.
 

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My sister is currently selling her condo FSBO. She does have a lawyer though. But the people buying the condo do not have a lawyer or a realtor and are CLUELESS on how to buy a house and what the contracts mean...which is fine, but in that case it's always best to have a lawyer or realtor.
 

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mstx said:
For one since I was a realtor for 2 yrs, unless your the one selling the home you dont spend the money.
Your fee is put in the price of the home. Which makes the home cost more. That how people pay the realator.

When a seller calculates paying off their mortgage, paying fees to title companies to close the deal and pay the realator this is all figured in on price of the home & whether your making any money or not on the home.

Example: If you sell a house for $200,000. Your bank mortage is $175,000 then you have $25,000 to pay realators fees, title company fees. You have to price the house accordingly so you can satisfy the loan to the bank and pay everyone off and try to walk away with a profit.

So technically yes the sellers pay the realator but in the end so do the buyers. For Sale By Owners have wiggle room on their price because it is not paying a 6 or 7% fee of the total price of the home that would be paid to a real estate agent.
 

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Thats interesting...never heard of having to pay a realtor when buying a house. When you sell a house the realtor take a percentage of the sale price and if there is a buyers agent they split it with them. When we bought our house we paid what the sellers listed. THEY were responsible for paying their realtor and then she split her commision with our realtor.

We are now on the other end of the deal and if we want to sell our house we would be responsible for paying our realtor. They take a commission of the sale price. Basically the market dictates what we can sell our house for so we can't "mark it up" to pay the realtor. We aren't selling right now because we can't afford the loss we would take from having a realtor. I think the going rate around here is 6-8%.

I would find someone to work as your sellers agent. They should know what all of the required paperwork is and they can advise you on realty matters like making offers and counter offers. They can arrange the inspections and basically make sure you aren't taken to the cleaners. We had a friend that was our realtor and he was very helpful and was there at closing to advise us as well. After we signed our closing papers the former owners asked to stay in the house for another week. He basically told them no for us. He told us it could cause more problems down the road and turn into a landlord/tennant issue and if they weren't nice people we would end up having to do an eviction process which could legally get ugly.

I would ask the sellers for an inspection report on the house if they have one. If not, definately ask for one to be done before buying. If I remember correctly our insurance company required one before they would insure our property.
 

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I think this process is very overwhelming for people to understand all the ins and outs.

Id like to recogmend this book for anyone buying a house. It makes mortgage easy to understand. With all the ins and outs of the process.



I havent read this one but it might be worth reading.

 

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The buyers realtor would negotiate with the seller about the commission if they would offer one if its a FSBO. Some agents (like myself) will do a flat fee. Mine was $200 for giving the buyer lists of houses and writing up all contracts and being at closing, I charged extra for taking them to showings since that involved driving and gas usually about $300-$500 depending on the amount of showings
 

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Discussion Starter #16
I called about the house today - its currently under contract but the guy was more than willing to show it to me this weekend if I wanted to see it - which I do. Even if it wasn't spoken for and I knew I could afford it, I'm not sure it would be for me.

Its a 3/2 with the garage closed off as a 4th bedroom. I WANT a garage to park my car in. Its not an absolute must, but the fact that the house should have a garage but now it doesn't is a bit of a turn off. Mostly because I have a pretty nice car - and while I don't mind parking it outside when I have to I'd rather not have it out in the open 24/7. Plus, I'm always running late for work and in the winter waiting on the ice to melt kills me! Another thing - although all of the houses I saw in the neighborhood had wood floors (ok, most were laminate but still) this house is completely tiled. Not sure that's something I'd like. I don't mind carpet but would much prefer wood. For some reason tile just doesn't do it for me.

The taxes are a bit high - higher than what my mom is paying for our house that is about $50K more than the one I'm looking at. And its not a big wide 2.4 acres but a very very loooooong 2.4 acres. The creek is at the very back. So I might have to do flood insurance, but I'm not really sure since its a pretty good ways back.

Some may say its a waste to have some legal representation but I literally know NOTHING about buying a house. I mostly want to make sure that the documents I was signing were right and legal and that I wasn't paying for anything I didn't need to pay for.

I do know an inspection is a must for any home purchase. But I wouldn't know when I could get it inspected. Would the inspector go in before I agree to buy? Or would I sign the papers then have it inspected and risk it being too little too late? Those are my big fears.

Oh - as for the price. Apparently, they are a fairly young couple. The wife's parents just gave them a house in Florida so they are literally just getting rid of this one. (could be a story, but heck... I wouldn't mind taking a cheap house because someone's rich parents gave them another!)

Most of my questions are general FSBO questions. While I love the idea of this house, its too much and too soon for me. But I'm trying to prepare.

I've decided I'm going to email a couple of people about the preapproval process. If the preapproval will last me about three months, I might actually go in and see what I'm worth this week. Better to know now rather than later when I think I'm financially ready to buy, right?
 

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It was nice to be pre-approved for our mortgage before we went house shopping. When we walked into our house we knew it was the one that we wanted and we gave an offer that day. Good thing as they had an open house planned in a couple of days and we know of at least 2 other people who were interested in the house.

The home inspector usually goes in after you have signed the papers that you are interested in the house, but before you sign the final papers. In our case the inspector found a few small things that we had taken care of before the final sale.
 

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mstx said:
The buyers realtor would negotiate with the seller about the commission if they would offer one if its a FSBO. Some agents (like myself) will do a flat fee. Mine was $200 for giving the buyer lists of houses and writing up all contracts and being at closing, I charged extra for taking them to showings since that involved driving and gas usually about $300-$500 depending on the amount of showings
That is a screaming deal. Wish you lived by me.

There is a business Called For Sale by Owner. They will list your house in the MLS and provide the contracts for the sellers. They charge 1% of selling price.
 
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