Home for sale by owner|Advantages of buying a home from the owner

<<>> Negotiate better terms

You can work directly with the owner and negotiate better terms. Sometimes the listing agent and the buyer’s agent work together to sell your home. Each agent is suppose to work for who hired them, but with commissions involved, sometimes the realtors will work together to make sure the home is sold. I’ve heard agents talking to other agents about how to close a deal and if they feel the owners’ will accept an offer or not without presenting it to the owner. This means that these realtors were looking out for themselves. No I understand all realtors are not this way, but some of them are. This is why you may be able to negotiate better terms directly from the owner.

Low commission checks

You will not have to pay high commissions associated with realtors. Some people think that the seller pays the commissions while others think that the buyer pays the commissions. In reality the buyer takes out a loan to pay for the home. The price of the home is artificially inflated and the value is determined by all of the homes in the multiple Listing database.

The market is driven by sales and the value is determined from the sales in the Multiple Listing Database. So in reality, the realtors have created their own commissions paid for by the buyers’ ability to borrow money from the bank and the sellers’ willingness to market the house for more money in order to cover the cost of the commissions. On paper, it looks like the seller has to pay for the commissions, as it is listed directly on the loan papers of the amount that will be paid in commissions.

If the seller has set their asking price from the advice of a realtor and you pay full value for the seller’s home, you will be paying full value for the home and the seller will be keeping the money that may have went to the realtors. To get a good deal from a home owner, the home must be prices 7% lower than the market value of the home plus the differences between listing prices and sales price. In my market area, this may be between 3% and 16%. If you're buying or selling real estate, you owe it to yourself to click here!

Home for sale by owner|Disadvantages

One of the main disadvantages is that when you find a home your emotions may convince you to pay full price for the home or you may be persuaded by the owner of the home on how good his home is and that it is priced below market value, etc. If you get emotional about the purchase of your home or your wife does and she can easily persuade you, this could be a big disadvantage.

Negotiation skills

If you have poor negotiation skills, this may be a disadvantage for your. Experienced realtors are trained negotiators. I’ve seen many of them in action and they are good. If I didn’t have the experience as an appraiser and have access to the MLS database, they would have surely convinced me. If you have poor negotiating skills, this is a disadvantage.

Lack of knowledge of home value

The lack of understanding of the true value of what the home is worth is a big disadvantage. Without access to the MLS and an understanding of what the home value is, it will be difficult for you to determine if the home is a fair deal, a good deal or a terrible deal. While it is expensive to hire an appraiser, it may be the best thing that you can do. If the home owner doesn’t want to do this, hire a Desktop appraisal or a drive-by appraisal. In both cases, the owner will either complete an appraisal from his office or drive by and look at the exterior of the home. If you’ve been in the home, providing the appraiser with the details on the interior of the home will provide a more accurate opinion of value. This will allow you to negotiate a fair purchase price.