How to Buy a Home for Sale By Owner
Many people buy homes directly from sellers without the real estate agent. A real estate attorney can walk the buyer through the process of making an offer and closing the deal. The lender can help the buyer through pre-approval and loan approval process. To buy a home from the owner takes some research, but it can be more cost-effective to both buyer and seller.
- Determine where you want to buy and what you can afford. Take a look at your monthly bills and financial obligations to determine the mortgage you can afford.
- Get pre-approved for a loan. Before approaching a seller, make sure you are able to get a mortgage loan. To get pre-approved, gather proof of income, bank statements and any documents requested by the lender. The lender will be able to tell you how much you can afford for a house.
- Search for a home by driving around the neighborhoods and calling the owners directly. Make an appointment to see the house.
- Get a valuation report or appraisal of the home. This report will show the value of the house, and how it compares to other homes recently sold in the neighborhood.
- Hire a real estate attorney. The attorney can be especially helpful if you do not use a real estate agent. He will be your advisor during the negotiation, and is in charge of handling the closing of the deal.
- Make an offer to the seller. Base your offer on the selling price, the valuation report and condition of the property. This is your opportunity for negotiating desired terms, including price of purchase, the closing date, closing costs and other seller concessions.
- Lock in your mortgage rate. Once you have made an offer and all the terms have been agreed upon, the house is under contract. Now you can go back to your lender and set a mortgage rate to provide enough time to complete paperwork and close on the house. The lender will have an appraisal done of the property. This may or may not affect the accepted price, as the lender will not agree to the loan if the house is being sold for more than the market value.
- Hire a home inspector. Depending on the home inspection, the purchase price may need to be re-negotiated.
- Close the deal. The attorney will handle the closing, and will advise you of any paperwork to be completed by you and the seller. The attorney will also work with your lender to assist with financial details.