Buying a Private Sale

Buying For Sale by Owner in Guelph

Buying a home that is being sold privately, also called a “for sale by owner” or FSBO for short, is not a bad decision, which is probably not what you would expect us to say, in fact there can be some benefits. As the internet and other methods of marketing homes expands, more sellers try to sell privately before hiring a licensed Realtor to represent them in the sale, but who is representing you as a buyer? There are several things to consider when considering purchasing privately.

First and foremost, hire a Realtor. As with most things in life, you go to professionals who know what they are doing. If you want your tooth to stop hurting you see a dentist, if you need surgery you go to a surgeon, if you get sued you call a lawyer, you get in an accident you call your insurance broker… You get the picture.  If you are buying a house you go to a real estate professional. Realtors know real estate, and live and breathe it every day. They know the real market trends, the hot areas, future development, highway construction, how to negotiate, and most of all they know the house prices. The best news of all, is that it doesn’t cost anything for buyer.  So why wouldn’t you work exclusively with a real estate sales representative?

If you choose to purchase a home that is not listed via the MLS by a licensed Realtor, there are many more things you need to be aware of and educated about.  Your risks are much higher, due to the lack of representation during the process.  Remember that a Realtor does NOT cost you a penny during a purchase transaction in Guelph and surrounding areas. When you enter into an exclusive buyers agreement with a Realtor to represent you, they have certain fiduciary duties to uphold.  You can also hire a Realtor to represent you in the purchase of a For Sale by Owner property in Guelph.  This arrangement will normally be at a negotiated cost to you for the Realtor’s services and the amount will depend on whether the seller is willing to participate in the cost. With us, we do no require you to sign any contracts or ask you to pay us should we help you find a private sale.  We just expect you to remember that we did a good job and refer us to your friends.

Buying For Sale by Owner in Guelph means you have to be prepared with the following:

• Arranging your own home Inspection
• Arranging your own appraisal (if required by your lender)
• Adding the necessary and required conditions (and understanding the proper wording) to the purchase contract to allow you time to arrange unconditional approval for financing and to arrange for and receive a favorable inspection
• Working with a seller that has all the proper forms that will be necessary to complete all the schedules and waivers of these conditions
• What about zoning and building permits?
• What should be left as part of the house and what can be taken by the seller?
• • **REMEMBER — the purchase contract is a LEGAL contract, you must make sure you have covered every legal step to avoid problems during or after the transaction

What do you do if there are many items that require repair on the home inspection? Should you re-negotiate the price, or should you walk away from the purchase?

These are only a couple of questions that a Licensed Realtor is there to assist you with.  Based on how extensive your expertise and knowledge of the home buying & negotiation processes are, will depend on your level of comfort in these circumstances.

Remember, you do not have to go through this process alone.  Give us a call today and we can easily assist you with your home buying process.

FSBO Home Buyers Checklist

• Mortgage Pre-approval – get pre-approved first and bring a copy of your mortgage pre-approval/rate hold with you so that you can show the seller you are pre-qualified and able to purchase their home if you wish to make an offer, this will increase your negotiating power

Want to make an offer?  Here are some items you need to request of the seller:

1. Request a copy of Title – review it for encumbrances, restrictive covenants, liens and caveats – ask your lawyer to review if you have any questions or don’t understand what is on it (or you can work with a realtor who will do this for you)
2. Get some identification from the seller to compare against the title, ensure that they are the legal owners and have the legal right to sell the property
3. Dower laws – make sure that if the title shows more than one person (like a spouse) that they are signing on the purchase contract as well.  Get identification for all parties.  As well, if only one person is on title, how will you confirm that that person is not legally married and selling the property without the permission or knowledge of the spouse?  Again, these are only a few of the issues you need to be aware of when purchasing via a For Sale by Owner.
4. This list goes on, and is extensive.  For more information on this or other FSBO related matters, contact me directly and I will be happy to meet with you to discuss entering into an Exclusive Buyers Agreement with Peak Precision Realty, to avoid all of the pitfalls and issues you may not be familiar with when buying a home.

Protect yourself and your investment, buy with a Realtor. We can help!