As a homebuyer, you’re currently in luck. It’s a buyers’ market. You may have the power to bring down an asking price and score a deal that better suits your financial abilities. However, you shouldn’t plan on only presenting a really low offer that a seller most likely won’t consider unless they are desperate to move in a hurry. And if a seller has other offers, they’ll deny yours in no time. With research and intelligent consideration, you can offer a reasonable price in a professional manner.
When buying as a FSBO (for sale by owner) customer, you are cutting out the middle man and talking directly with a seller about making a formal offer. To successfully complete this process, here are the steps to follow:
• Get prequalified for a loan, if you need one. This will make sellers more comfortable with accepting an offer from you, it will make the process faster once your offer is accepted, and it will assure you that you are able to provide the offer that you make.
• When you become interested in a house, try to find out why the seller is selling. If they need to move as soon as possible, your chances of scoring a deal are higher. If they can take their time, or if they have multiple offers, your offer will need to be more impressive.
• Research other houses in the area that are of a similar size and location, and were recently sold. Keep track of how much these houses were sold for, so you can use this information in your favor during the negotiation process.
• Head to an office supply store and pick up a generic contract, or print one out from your state’s official website. These forms will provide standard instructions with what information you need, such as the address, the sale price, a target date for closing, the offer, and how much of a deposit will accompany the offer. You can also describe contingencies of the potential sale, such as having the home inspected first or selling your house first.
• Once completed, deliver the contract to the seller. Then wait for the seller to get back to you with what will probably be a counteroffer. If more than five days pass without any word, contact the seller and ask for an update.
• You don’t have to inform the seller of personal information, such as why you’re moving, your housing status or your financial status. However, you will need to prove that you are preapproved for a loan and are able to pay a deposit. Research what information you do and do not need to share with the seller.
• If a negotiation is met, sign the contract in the necessary areas. You can give earnest money directly to the seller, but a better option is to pay a title company, who will keep your money held in escrow. For more information on title insurance that Buy Owner offers, click here.
• Complete the loan approval with your lender, which will transfer the title over to the seller once all the documents are signed by both of you. You now officially own a house!