Buying a Private Sale in Guelph
Buying a property that is being sold privately, also called a “for sale by owner” or FSBO for short is becoming more common. Buying a private sale 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 and we will walk you through them in this article.
“Buying a private sale is not a bad decision, which is probably not what you
would expect us to say.”
Benefits Of Buying a Private Sale
- You often have more time to see the house and decide on an offer (they sit longer)
- The Sellers may not be good negotiators
- You can often negotiate a lower price by cutting out at least 2.5% of the list price
- Some private sales are priced too low to start with
Negative Aspects of Buying a Private Sale
- There are no regulations or rules
- You cannot be sure if there are other offers when told there is
- No errors and omissions insurance
- Buyers pay for an appraisal
- Banks scrutinize deals and don’t like them
- Personalities get in the way
- Sellers walk with you through the house and often describe every detail
- You have to work around the sellers schedule
- Negotiations can be stressful
- Knowing the right price or what is happening in the market
- No easy access to zoning, open permits and city violations.
Buying a Private Sale
First and foremost, consider working with a REALTOR® when thinking about buying a private sale. 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 the picture. If you are buying a house you go to a local 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. Who wants to pay more than they have to? 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 or broker?
“The best news of all, is that it doesn’t cost anything for buyer.”
If you choose to purchase a home that is not listed via the MLS listing service 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, however, we do NOT require you to sign any contracts or ask you to pay us should we help you purchase a private sale. We will negotiate any fees directly from the seller just like a traditional MLS listing. We simply ask you to remember that we did a good job and refer us to your friends.
Buying With a Realtor® Video
Buying a Private Sale in Guelph Without a Realtor®
…means you have to be prepared with the following:
- Arrange your own home viewing
- Arrange your own home Inspection
- Arrange your own appraisal (required by your lender if a private sale)
- Negotiate your own price and closing dates
- 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
- Use a lawyer to draft the offer and subsequent condition fulfillment documents.
- Check for open zoning and building permits
- Determine what should be left as part of the house (chattels) 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?
- How will you deal with any tenants?
- What about the seller telling you that there are “other offers”
- How will you verify that you are paying a fair price?
- Do you have experience in negotiating the best price and terms of a deal?
These are only a few of the many questions 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.
Want to make an offer? Here are some items you need to request of the seller:
- 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)
- 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
- 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.
- 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 working with At Home Group 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!