Buying a home can be daunting and when you factor in real estate agents, mortgages, inspections, and more, it may seem easier to just handle the transaction on your own. Buying a home directly from an owner in a for sale by owner (FSBO) deal seems like an easy route, but is it actually a good idea to get a home that’s FSBO in Spokane?
The Legality of It
In some areas, there are strict guidelines that home sellers and buyers have to meet to be able to do a for sale by owner transaction. This doesn’t necessarily mean that you’ll be breaking laws if you buy a home that’s being sold directly by the owner, but it could lead to some frustrations and confusion for both parties.
If you’re going to purchase a home directly from the owner, you should first look at other options. Consider getting a real estate professional involved from your end. This doesn’t mean that the person who is selling their home has to involve a professional, but it can protect you in the event the home is not quite what it seems.
Mortgages and Back Taxes
A big reason that people sell their homes on their own is that they just don’t have the means to fix up the home to get it onto the market. Instead, they take the approach of just “getting rid of it” on their own. Other reasons that a seller might be trying to offload their home in an FSBO sale include owing back taxes and being in a bad position with their mortgage. While you won’t become responsible for the debt they have with a mortgage, you may be responsible for back taxes on the property or any lien amounts that were put on because of the mortgage.
If you are not going to use a real estate professional, you should (at a minimum) have a title search performed on the property. Talk with local title search companies and make sure the home is free and clear before purchasing a home that’s FSBO in Spokane.
Financing the Home
Your real estate professional will not be able to issue you a loan, but they can help you with the financing process. People who are in real estate don’t (typically) issue mortgages but they might be able to provide you with information on how to get started with financing, where to look for the best rates, and what to look out for depending on the type of home that you’re purchasing. They may also have access to information on non-traditional home loans that can be difficult to understand.
While a mortgage company probably won’t block you from purchasing a home that is FSBO, there might be complications involved with getting the financing. If the home is priced higher than what it appraised for (you did take care of that, too, right?), if it has certain features that would disqualify it from nontraditional mortgages, or if it doesn’t fall into their specific criteria, you may lose out on the home.
People who list their homes FSBO in Spokane may also be offering “seller financing” or something similar. This can seem like a dream come true to people who are low-income, with poor credit, or just impatient to get into their own home. But, they are often more like a nightmare. Seller financing does not (by default) come with any protections or guarantees offered by a mortgage.
The Value of the Home
It might seem like a great deal, but you could be paying way more than what you need to with a home that’s FSBO in Spokane. A real estate professional will not only have access to things like detailed comp lists but may also be able to get more information on the true value of the home. Working with a professional protects you from paying way more than what your home is worth and getting behind before you even have a chance to enjoy your new home.
You might save some money on commissions paid to your real estate agent, but you could end up paying much more than that with all the variables involved in the home. Overall, purchasing a home that is FSBO in Spokane is not a great idea. Working with a professional protects you and pays off in the long run! Most of the time, a FSBO will be willing to pay a Buyer’s agent’s commission. The opportunity to have a professional in your corner is highly recommended. Getting the Seller to pay for that professional… even better! See that!? You are already becoming an expert negotiator! (If you are a Seller, wondering why you would sign up for that —> we’ll probably cover that in another article, but yeah, short answer is, you probably shouldn’t!)
There are some instances where an FSBO in Spokane might be a good idea, but it’s important to always have a real estate professional involved. Professionals not only know more about buying (and selling) a home, but they may actually be able to help you get a better price, provide you with more information about the home, and protect you during the buying process. Contact Our Home Spokane today to connect with one!