If there’s one thing most homebuyers have in common, it’s wanting to get the best deal on a home. Buying a for sale by owner or FSBO home is no exception. The difference is, though, that you are on your own. You don’t have the expertise of a real estate agent negotiating on your behalf.
Luckily, this doesn’t mean you are stuck paying top dollar for a home. With the right steps, you can get a good deal on a for sale by owner home too.
Do Your Research
Once you find a home you want to buy, do your research on the comparable homes in the area. You’ll want to look at:
- Recently sold homes in the nearby area
- Homes currently on the market in the area
- Homes recently on the market that didn’t sell
Pay close attention to the price each home was listed and sold for so that you have bargaining power. The recently sold homes will hold the most weight in your negotiations. If the home you want to buy is priced much higher, try to figure out how the seller justifies that higher price. Are there features on your potential home that the comparable home doesn’t have? If not and all or most things are equal, the seller may be asking too much and you may be able to talk him down with proof of the comparable sales.
Looking at homes that are currently on the market and even those that didn’t sell can help too, though. Homes currently on the market give your potential home a little competition. If there are several homes with similar layouts and features, there’s a larger supply, which can drive down the price of the home. The seller will know you can go elsewhere nearby and still get the home you want. This may make the seller more likely to lower the price. As far as homes that didn’t sell, compare their asking price to the asking price of the home you want. Are they similar? If so, try to get the price down by showing the seller that the other homes did not sell.
Make Sure There’s a Discount for the FSBO
FSBO homes don’t use the services of a real estate agent. This right there should save you 6% on the home’s sales price. When you look at comparable sales, try to find out if they were sold with a real estate agent or as a for sale by owner home. This way you know whether the price you pay for the FSBO home should be close to that price or at least 6% lower.
Speaking of the home’s price, though, you’ll want to make sure the home is fairly priced. While you can look at the comparable sales, you should also talk to a professional. Because the owner is selling the home, there could be a chance that he/she is asking too much for it. If this is the case, you can bid a lower amount and let the seller know why you bid that lower amount.
Don’t Ask For a Lot
As the buyer, you have the right to ask the seller to make sure the home is in pristine condition. You may even ask the seller to make certain repairs or credit you the cost of those repairs. Additionally, you may ask the lender for contingencies. These are conditions, which if they occur, allow you to cancel the purchase contract.
That’s a lot of asking of the seller. If you want the best deal on the home, give the seller a straightforward deal. Don’t ask for concessions or ask the seller to fix something. Buy the home as-is and you will have a better chance of the seller accepting your lower than the asking price bid. Add on too many requests and the seller could up the ante rather quickly.
Getting the best deal on a FSBO isn’t impossible, but you have to be ready to do the work. Because you won’t have a real estate agent working on your behalf, you’ll need to know how to proceed. Do your research and arm yourself with as much information as possible in order to convince the seller to give you the best deal on the home.Click to See the Latest Mortgage Rates»