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Buying a House For Sale by Owner
There are many avenues to finding affordable primary residences or properties for investments. One way to obtain cheap homes is to look for For Sale By Owner (FSBO) properties - or homes that are being marketed and sold by the owners, not an agency or Broker.
You can easily find FSBO traditional homes or For Sale by Owner foreclosures - homes that are facing foreclosure and need to be sold at a discount to avoid that unwanted outcome. Here is a BankForeclosuresSale guide to finding and buying FSBO properties in any market.
Why FSBO Houses Are a Profitable Investment
First, we will examine the advantages of pursuing homes for sale by owners versus traditional homes or even foreclosures at auction.
For Sale By Owner Homes for sale, for starters, are usually discount properties, which means they can be often purchased for below market value. This especially holds true if you are searching for:
- For Sale By Owner foreclosures - homes that otherwise will be taken by the bank and sold at auction, leaving the original homeowner stuck with a foreclosure on his or her record and a shattered credit score.
- Additionally, cheap FSBO homes are not generally sold "as is", which means you will not typically have to make major repairs that eat into your profit margin. Sellers know that their homes must be in prime condition in order to attract buyers and generally will ensure that their properties more than pass inspection.
How to Find For Sale By Owner Real Estate
The best way to find cheap houses for sale by owner is to consult For Sale By Owner listings (FSBO listings). These listings can supply you with detailed information about each property, including its price, its dimensions, the address and neighborhood, amenities, and the owners who are listing the property. This way, you can establish contact directly with the owners and save money and time by bypassing Brokers or agents.
Whether you are looking for traditional homes for sale by owner, mobile homes for sale by owner, or even bank owned homes that failed to sell at auction, listings are the best way to go. Virtually every market features homes that are for sale by owner: Birmingham AL, Michigan, and Baton Rouge are just a few varied examples of metro areas, states, and smaller cities that all feature these properties.
One tip: Look at states that have high foreclosure rates, like Florida or Nevada. States like these will have more FSBO homes because homeowners will be more likely to fall victim to the foreclosure process - which means they are more likely to try and sell their home before that happens.
FSBO Homes Negotiation
Now it is time to discuss the negotiation process for cheap houses for sale by owner. With just a few FSBO tips, this process can be smooth - and profitable - for you and can be a relief for the owners selling the home.
The first step to a successful sale is to obtain a pre-approved letter before you even look for properties. A letter from your bank informs the potential seller that you will have access to financing, which helps the process and prevents anyone from wasting their time.
Next, after you have found the real estate for sale by owner that you desire, you should conduct thorough research on the property. Are there any liens on the property? What about needed repairs? How much is the home worth compared to other, similar homes? This step is even more crucial for first time home buyers because of the inherent risk involved, but with careful research, you can mitigate that risk.
It generally is not advised to go "door to door" for an initial contract. Many veteran buyers write intro letters or emails to the owner. Working through a mutual acquaintance, if possible, is also recommended. If the owner isn't interested, wait; they may take you up on your offer if they are facing foreclosure.
Finally, have the beginnings of a FSBO contract written up before you approach. You will work out the final details with the seller, but be sure to include how much you are willing to pay; your down payment; a full description of the property; deadlines for closing; and any contingency terms, such as the offer being void if you can't sell your present home.
The FSBO process is an exciting way to find cheap houses for sale and pre-foreclosure properties at a discount. Anyway, if you are not looking for only for sale by owner homes, but any kind of cheap real estate, you can also take advantage of bank foreclosures, HUD homes, Government foreclosures and much more. Be sure you will not regret!