Buying a home that’s for sale by owner can be as easy as buying a home listed through a real estate agent and more rewarding. Buying a home that is for sale by owner can save you about 6% of the total house cost if neither side chooses to go for a real estate agent. This 6% may not be enough to make a difference for some people but it can help you make home loan payments from a mortgage lender more affordable for some people and can be the difference between buying a house and watching someone else buy the home you want.

This can cost you a ton of money while buying a home. When you Minus The Agent on both the sides, it will ensure that you save a significant amount of money while making the transaction.

Here are a few tips to buy a home that is for sale by owner:

C.L.U.E

Purchase Agreement

If you and the seller both have opted not to hire a real estate agent then hire a real estate attorney to create the documents and provide any legal advice you may need. A purchase agreement contains the pricing at which you are buying the house, contingencies such as home inspection and financing, states the time you are willing to take over the house, and title policies, etc.

Determine who pays what

Sellers who opt ‘for sale by owner’ typically pay the total real estate commissions of the buyer’s agent, his/her own real estate attorney if they hired one, and the property taxes levied on the property sold. If he hasn’t yet paid the annual property taxes, the seller can credit the remaining taxes to the buyer equivalent to the number of days the seller owned the home that year. This credit reduces the amount of money that the buyer needs at closing. If the seller is in a hurry to sell the home, he/she might be willing to take on more of the closing costs. This usually happens in a buyer’s market. On the other hand, the buyer usually pays for the mortgage fees including its application, origination points, discount points, mortgage insurance, credit report, and mortgage broker’s fee. An origination point compensates the lender or mortgage broker for their work; a discount point lowers the interest rate. You can always amortize some of the closing fees in the interest rate of your monthly mortgage payment. This will increase your monthly mortgage payment but decrease the amount of money you need to bring at the closing table

Closing Costs

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