By John Marsett
Have you considered buying a home that is not listed with a major realtor? If you drive around town or look in your newspaper, you will find many homes that are For Sale By Owner, or FSBO. These can be quite appealing if you are in the market for a new house, especially your first house. There are some benefits to working directly with the homeowner but there are also some drawbacks to consider as well. We are going to look at a few of the pros and cons you may come across with a FSBO.
A major con to buying a home directly from the owner is that you might be getting more than meets the eye. You have to make sure that you get our own inspection so you can know the home disclsure is up to date. You will also want to read the fine print when it comes to the contract. These details are not commonly addressed in homes for sale by owner. A real estate lawyer can be invaluable when buying a FSBO.
A major pro is that financing can be less complicated when working directly with the homeowner. For example, I found an adorable little house with a for sale sign posted in the front yard. It was a great place in a great neighborhood. Other may have been afraid that this home for sale by owner and passed it by. But, in working directly with the owner, we were able to know much more of the history of the home, improvements, schools, etc. This is much more than many real estate agents would be able to tell you.
The down payment on this home was negotiable and I was comfortable with the homeowner’s asking price. After asking a few questions, I was able to use the same company as the owner, possibly making the financing process a
Illinois and Wisconsin Mortgage Rates as of 12/02/2008 9:57 AM CST : Current Mortgage Rate Trend: steady
30 Year fixed: 5.500% (5.572% APR)
15 Year Fixed: 5.500% (5.603% APR)
30 Year Fixed Jumbo 7.100% (7.120% APR)
5/1 Jumbo ARM: 5.950% (5.970% APR)
5/1 ARM: 6.250% (6.313% APR)
3/1 ARM: 6.250% (6.313% APR)
30 Year FHA and VA: 6.000% (6.062% APR)
30 Year Rural Housing: 6.000% (6.062% APR)
3/1 ARM Lot Loan: 6.875% (7.034% APR)
1/1 ARM Lot Loan: 6.725% (6.882% APR)
bit easier. The closing took a grand total of 25 minutes. This would have never been possible through traditional routes. There is nothing wrong with a realtor, but sometimes there are great homes available outside of any realtor's network.
This is not to say all FSBO homes are dream homes. In fact, others have not had the same experience. After hearing about how well things went for us, one of our friends looked into homes for sale by owner in his area. He had difficulty finding places that weren’t connected with a company. There were plenty of houses for sale but only ones through real estate agencies. The For Sale By Owner homes he did find were not quite the "dream" he had hoped for.
Furthermore, once he did find a couple homes for sale by owner, he tried making appointments to see them. This wasn’t simple because many of the homeowners were busy while he was off work, had already moved out of town, or simply were not returning phone calls. It seems strange when a person wants to sell a home that they are unwilling to work with you. Scheduling a good time was a real challenge and when he did get an appointment he usually didn’t like what he saw.
One possible solution to finding homes that are FSBO is to turn to Google and do a search. You may find several networks that list these homes. In the north Texas area, a popular network is called Buy Owner. You can research these homes online before you would ever go out and see them. This can be a great time saver. Anyone interested in purchasing a house has lots of options. Finding homes for sale by owner opportunities might seem difficult but it really isn’t if you start with your computer.
John is a real estate investor and has helped many individuals get into their first home. He has helped people through lease options and finding qualified lending through mortgage brokers.
Here are some more mortgage articles...
