Does Buying a For Sale By Owner Save You Money ?

If the owner is paying no commission does he automatically pass savings on to the buyer? The answer is a simply no ! The only reason that an owner will attempt the complex task of selling a property is that he is trying to save the commission by performing the duties of a broker and that savings are not passed on to the purchaser, but rather put in his pocket, if he is successful. This is not an assumption but a fact. Most owners are not familiar with the bewildering array of paperwork involved in the preparation of a purchase agreement and the consider-able accompanying documentation which is required. In Louisiana the sale of 1-4 family residential properties usually requires that the seller provide a Property Disclosure for the purchaser to review , which outlines a series of questions which the owner must respond to. (There are some exemptions to Property Disclosure).

Owners selling on their own must provide lead based paint disclosure if the property was built prior to 1978, and must provide the purchaser with a lead based paint booklet. Certain types of financing dictate additional paperwork such as the F.H.A., which requires that the purchaser be advised that he can have a property inspection made. The paperwork requirements are complex and mandatory. Even more daunting is the fact that as a purchaser you have no one representing you in the transaction. Please understand that owners represent their own interest and there is an adversarial aspect inherent in this as the owner is out to get the most possible money out of the transaction-at your expense. How do you determine whether the price is right ? How do you determine the condition of the property ? How do you determine financing options ? Who do you go to for help with questions pertaining to the transaction ? As an expert real estate broker with 42 years of experience, I have seen some individuals taken advantage of because of their ignorance, by unscrupulous owners. The choice is yours. You can assume that an owner is going to discount the price, be absolutely fair, prepare all required paperwork correctly and that you will have saved plenty of money, but I trust you can see how naive this may be. Please also be aware that owners often overprice their properties, asking prices that are substantially higher than they are worth-sometimes intentionally and sometimes out of ignorance. Finally, to assume that because an owner is selling that the price must automatically be lower is wishful thinking, not reality. We will represent either party in a for sale by owner transaction or both parties on a negotiated fee basis. If no representation is desired we will prepare the purchase agreement and all required forms and assist either party for a negotiated fee, payable by the buyer or the seller. In this manner you may be assured that the details will be handled professionally. You are most welcome to inquire about these services.

* The preceding article is subjective and represents the professional opinion of the author / real estate broker, Larry Trunk