Most people use the services of a real estate agent when selling their homes. But 8% of US home sellers went the "for sale by owner" (FSBO) route last year, according to the National Association of REALTORS®. As a buyer, this may sound like a way to save some money. After all, oftentimes, these homes sell for thousands less than those homes involving an agent. But you also run some risks when you buy directly from the owner. So, if you see a Tucson home for sale by the owner, keep these home buying tips in mind.
For Sale by Owner Home Buying Tips
Is The Price Actually Right?
Sellers tend to price their homes based on what they "think" other homes in the area are worth. Fortunately, when you work with a pro, they can access comps in the area to find out the true value of that Tucson home. Use this information when submitting your offer and negotiating a sale price.
Appraisals/Inspections Are Very Important
Another one of my home buying tips you should keep in mind is to get an appraisal and a home inspection done on the property before you buy it. Even newer Tucson homes may come with issues. So, the small cost of an inspection ($200 to $400 on average) is well worth it. If an inspector finds something of significance in their report, go back to the seller with their findings to negotiate either the actual repair or the cost to repair into the sale price of the home. And definitely do not skip the termite inspection.
Your lender requires an appraisal before they approve a loan. Why? They will not approve a loan for more than the appraised value of a property, even if you are willing to pay more. If the appraisal comes in low, you need to either come up with more money out of pocket or try to negotiate down the price with the seller. Otherwise, the sale falls through.
City or Septic?
Both wells and septic systems are common in Arizona. Find out which one exists on the property in question. Older homes may not even have a permit for the septic system on the property. That could cause a problem with obtaining a loan through a bank. By checking on the permit status in the beginning, you save yourself money on inspections, appraisals, etc. down the road. If all things check out, make sure the size of the septic system is appropriate for the number of people living on the property. Upgrades and repairs for an inadequate system cost a lot of money.
Do Not Hesitate to Question
For the last of my home buying tips with FSBOs, ask questions. When sellers use a real estate agent as their representative, they are required to fill out a disclosure form. FSBO sellers are not held to the same standard. Therefore, some issues may be easier to hide with a FSBO. (Again, get that home inspection done!) Now, I'm not suggesting that sellers go out of their way to hide things. But it could happen. So, if you find yourself questioning certain areas of the property or wanting to know the age of the roofing, HVAC system, electrical, etc., ask. Even finding out the motivation behind their sale could help you.
Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate
