Buying For Sale By Owner
If you are buying a home that is a for sale by owner (FSBO), you will need some professional assistance. Your offer will need to be submitted on a contract that is approved by the Florida Bar. Don’t get taken advantage of. Protect yourself with a home inspection, appraisal, and title insurance.
Submitting an Offer on a For Sale By Owner
Most FSBOs will pay commission to a buyer’s agent. The seller, not the buyer, pays Realtor commissions. It’s important to ask the seller upfront if they’re willing to pay your agent’s commission. You will need a good agent to write your offer up on a standardized FAR BAR contract. Necessary addenda and disclosures will have to be included such as the Lead Based Paint Addendum for homes built before 1978, a Homeowner’s Association Disclosure, etc. A smart agent will be sure that your offer is complete.
There are many negotiables in the FAR BAR Contract for Sale & Purchase. It is important to know what is up for negotiation and how your best interest is represented in each term of the contract without causing the seller to reject your offer. There is a lot more to your offer than the purchase price, be sure you understand your offer in its entirety.
Protect Yourself When Buying For Sale By Owner
Securing a mortgage will require an appraisal. However, if you’re paying cash, you can opt-out of the appraisal process. This is not a good idea! You need assurance that you aren’t overpaying. In a market with limited inventory, it can be tempting to waive the appraisal contingency. If you are willing to pay above market value due to a lack of available homes on the market, you can offer to pay a specified amount over the appraised price. This will offer more protection than going in blindly without an appraisal.
You should receive a Seller’s Disclosure listing property defects. However, sellers can only disclose defects that they are aware of. And let’s face it, not everyone is honest when disclosing home defects despite their legal obligation to do so. If a seller opts to sell without an agent, they could be unaware of their legal responsibility to disclose defects. Therefore, when buying a for sale by owner property, home inspections are absolutely essential. A home inspection will give you a much better idea of the home’s overall condition so you can assess repair costs and negotiate with the seller accordingly.
Title Insurance will protect you from any existing liens against the property. If you don’t have a title insurance policy and the seller has code violations, unpaid taxes, or any other liens against the property, these financial obligations will carry over to you as the new owner. Your title company will run a title search to ensure that there are no clouds on the title. If a person or institution tries to lay claim to your property, your title insurance policy will protect you and your heirs for as long as you own the property.