Zillow Advice: Buying Process - I would like to purchase a "for sale by owner" home - first time buyer - any advice? Best steps? http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ Zillow Advice | Zillow Real Estate 2.5-3%..."if your seller ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2.5-3%..."if your seller is too miserly to agree to that"<br/><br/>That's $2500-$3000 per $100,000<br/>Pay $200,000 for the property it cost that miserly person $5000-$6000<br/>$300,000=$7500-$9000<br/>(Miserly person = "You" since the seller if they have any brains will add it to the price) <br/><br/>You'll need to up the offer most likely<br/>Not chump change...<br/><br/>From the Dept. of Justice Anti-Trust Website...<br/><p>"What is a fee-for-service broker"</p><p>Brokers willing to sell a subset of real estate brokerage services, often called fee-for-service brokers, have emerged throughout the country.</p><p>Fee-for-service brokers "unbundle" the package of real estate services typically offered by traditional full-service real estate brokers and charge a fixed or hourly fee for specific services, such as listing the house in the MLS, negotiating or closing contracts, and pricing the home. These brokerage models enable consumers to save thousands of dollars by allowing them to purchase only those services they want."</p><p><em><strong>Learn more:</strong></em> <a href="http://www.justice.gov/atr/public/reports/223094.htm#IC2" rel="nofollow">Fee-for-Service Brokers</a></p>If you need to up the purchase price to cover the cost or pay out of pocket at least you'll cut the cost this way over going the 2.5%/3% route<p>Also another option to keep in mind if you do go the way of 2-3% ..Wisconsin</p><p>"Allows brokers to offer rebates to consumers"..<a href="http://www.justice.gov/atr/public/real_estate/states-map.html" rel="nofollow">What are the laws in your state?</a></p><p>Whatever your decision Good Luck</p> Mon, 08 Oct 2012 19:44:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-08T19:44:00Z You need to get an attorney ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ You need to get an attorney at this point.&nbsp; Bringing an agent into the transaction now is the unauthorized practice of law.&nbsp; Mon, 08 Oct 2012 17:34:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-08T17:34:00Z I really would not advise ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ I really would not advise buying any home without having independent representation by a Realtor. We know what is needed to make the transaction close correctly. Dotting all the i's and crossing the t's. It is a complex legal transaction in any state.<br/><br/>In my area (Northern California) it is normal for FSBOs to cooperate with Buyer Agents. So they will pay the buyer broker commission (typically 2.5-3%) at close of escrow. They are still saving the selling side commission.<br/><br/>But if your seller is too miserly to agree to that, it would still be in your interests to have representation, even if you have to pay for it. Sun, 07 Oct 2012 17:52:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T17:52:00Z I guess we all have a lot ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ I guess we all have a lot of questions for you and even more advice.&nbsp; You said that you had worked with agents in the past but <em>"they were not extremely helpful",</em> but you do not say what you expected that they did not do.&nbsp; Since you are a first time buyer, I dare say that a buyer agent at least has professional experience and training in what needs to be done and how to do it, whereas as a first time buyer you may not know the steps.&nbsp; Oftentimes, when the sellers price the property&nbsp;they add the commission to it (or not). &nbsp;I have seldom seen a FSBO priced below market, just because the sellers were saving the commission.&nbsp; A buyer agent can help you draft an offer that will protect your interests, even if you have to pay the buyer agent, you may be avoiding pitfalls during the process.&nbsp; Somebody, should do a comparative market analysis, or at least check out the assessed value of the property.&nbsp; If you decide to <em>solo</em>, after the offer, &nbsp;comes the Home Inspection.&nbsp; You should check out the septic and the water well, as well as the actual building you are purchasing.&nbsp; Adhering to dates is very important in a transaction, so the offer has to included deadlines for the home inspection and the financial commitment from the bank, which takes place after the bank has had an appraisal done.&nbsp; If you were my friend or relative, and you are a first time buyer, I would say, get yourself a buyer agent!&nbsp; Good luck!&nbsp; <strong>Note</strong>:&nbsp; is the FSBO a first time seller? Sun, 07 Oct 2012 17:44:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T17:44:00Z Wow - thank you everyone ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ Wow - thank you everyone for the helpful and quick responses! We are pre-approved with a lender, and they have been helpful. This is a very large purchase, so I do not want to get "blind-sided" with hidden costs or things that I did not plan for. At the same time we love this house and do not want to lose it (had that happen once already). We know that a home inspection must be done and an appraisal. The home is in the country and does have well water and septic. I have worked with realtors in the past and they were not extremely helpful - maybe I am just not finding the right one? Sun, 07 Oct 2012 14:25:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T14:25:00Z re. I am back and forth on ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ re. I am back and forth on what the initial offer should be...<br/><br/>I assume the FSBO already asked to see your 'pre approval' letter and of course that you have one.. If you're sure there are no other offers and that the property is not under contract, or taking 'back up offers', I'd suggest talking the price over with the owner to get an idea of the degree to wish he's willing to negotiate price downwards with and without you represented by a Buyer's agent.&nbsp; If you come to some verbal agreement, since it's a Sunday, you could fill out a contract yourself [owner should have one, or WI contracts should be available on line] by inserting 'contract contingent on buyer's attorney approval.' <br/><br/>Owner should be willing to sacrifice at least 1/2 their 6% savings on buyer and listing agent commissions. Personally I think a FSBO owner should also have a 'pre sale' home inspection as well a licensed appraisal if they're going to be serious about selling as a FSBO... Sun, 07 Oct 2012 14:21:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T14:21:00Z I'm very glad that you posted ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ I'm very glad that you posted this question online as you really need sound advise when making such a large purchase as a home. There are so many "hidden" pitfalls that aren't readily apparent when buying a home. The foremost answer you need is what is the home's real market value. A good realtor can sit down with you and show you the home's value and the comparable sold homes that were used to come to that price. It's easy for realtors to pull this information up, but may be difficult for you as we can see pictures and read comments on the sold houses as well as see how many days on market, etc. the contract to purchase and disclosure docs can be so important that you need either a realtor or attorney to write those docs for you. The title company will most likely will recommend you use a realtor as they must have the contracts right to ensure proper title. As stated before, your realtor will be important to you in finding the qualified inspectors as you must have the house thoroughly inspected. There are usually many items that need fixed on that list and your realtor can negotiate that for you with the seller so that you are ensured that the problems get fixed before you purchase. It's really difficult at times to try to negotiate with the seller for repairs. Getting a loan through to close is very tricky now too. Most realtors will be happy to either negotiate a fee with the seller or possibly split that between seller and buyer. Just to be a tranaction broker (help you through the process) the normal fee might be around 1% of the sale price of the home. Please feel free to contact me if you have any other questions. I'm in Colorado so I could help you. Be careful! Sun, 07 Oct 2012 14:06:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T14:06:00Z If you know an agent (or ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ If you know an agent (or family and friends can recommend one), call and ask what they would charge to assist from this point.&nbsp;<br/><br/>I would play it a little close to the vest today and simply say that you are thinking of making an offer, but don't disclose what that offer may be. Then you can allow yourself the room to negotiate payment for an agent.&nbsp;<br/><br/>Are you pre-approved with a lender? They are often an excellent resource for not only advice, but referrals. Sun, 07 Oct 2012 14:06:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T14:06:00Z Its very risky to putchase ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ Its very risky to putchase a FSBO home especially if this is your first home. My first question is does the seller have a real estate condition report completed for you with any defects the home may have? Have you looked at homes in the past with a real estate agent, if so I would ask them to help you with your first purchase. You could be opening a can of worms by not working with an agent as far as any defects in the home and&nbsp;getting the best deal you can. Also ask for a home inspection..hiring a professional home inspector is a must and its well worth the $250-300 you might spend. If the home is in the country you might also want to hire someone to look into the well and septic system along with getting the water tested. If things are found in the inspection then those need to be addressed with the seller<br/>If you have questions feel free to email me .<br/><br/>Best wishes,<br/><br/>Nan Brennan<br/>Century 21 First Realy Appleton, WI Sun, 07 Oct 2012 14:05:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T14:05:00Z We are in Wisconsin - very ... http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ We are in Wisconsin - very rural area (population of 1,000) - so it is difficult to do get an accurate market analysis of homes in the area, simply because there are so few to compare to. We have looked at a few other homes and I think this home is priced appropriately, but then again I am not an expert. &nbsp;I like the idea of negotiating with a realtor a flat cost for his/her services, and also like the idea of not getting a realtor and using that to my advantage when negotiating with the seller as a cost saved to them. We are going to look at the home again today, and will discuss some of these different circumstances. The sellers seem willing to negotiate. I am back and forth on what the initial offer should be... Sun, 07 Oct 2012 13:55:00 GMT http://www.zillow.com/advice-thread/I-would-like-to-purchase-a-for-sale-by-owner-home-first-time-buyer-any-advice-Best-steps/463026/ 2012-10-07T13:55:00Z