Buying a property that’s for sale by owner, or FSBO, doesn’t have to be difficult. In fact, it may offer some advantages as you won’t have to pay fees or commissions for a real estate agent (although, using a professional is always recommended).
However, when pursuing a FSBO home, there are a few things that you should consider in order to ensure the home buying process goes off without a hitch.
So you found the perfect FSBO and want to make a purchase, but you don’t know what to do next. Well, your first order of business should be drafting a purchase agreement. This will be an important document for your lender so you want to make sure you include all of the needed information.
- Buyer and seller details
- Pricing and financing
- Property details
- Closing and possession dates
- Conflict resolutions
- Title considerations
- Any additional info that may be needed
After creating your purchase agreement, the next step should be obtaining homeowners insurance; without insurance you will not be able to procure a loan from a mortgage lender. Homeowners insurance protects you and everyone else invested in your home from property damage.
One of the next steps in purchasing a FSBO is scheduling an appraisal. The appraiser determines the worth of a property by comparing the values of comparable homes in the area. This also requires an inspection of the home to make certain repairs and safety conditions are satisfied before the loan can be brought into closing.
Check out our post on how to apply for a mortgage for more information on the mortgage process.