Guidelines for Purchasing Homes Directly From Owners

In typical real estate transactions, agents facilitate communication between buyers and sellers. However, when a property is listed as owner-sold, buyers communicate directly with the seller. This setup often eliminates intermediary fees, giving sellers room for negotiation on the price. Successfully purchasing owner-sold homes requires strategic planning and careful execution.

Secure Mortgage Pre-Approval
Before exploring properties, establish a budget and obtain pre-approval for a mortgage. This step clarifies your financial capacity and demonstrates seriousness to sellers. Many owners prefer working with pre-approved buyers, as it reassures them of your ability to complete the purchase. Post-offer acceptance, you'll need to finalize the mortgage approval process.

While owner-sold homes can reduce some costs, it’s advisable to work with a real estate agent. Although sellers often don’t list with agents, some are open to paying the buyer’s agent commission, which can assist in negotiations and streamline the process. An experienced agent can help navigate potential hurdles and protect your interests throughout the transaction.

Identify Suitable Homes
Working with a buyer’s agent can help tailor your search according to your preferences, providing a selection of potential properties. Alternatively, you can browse online listings or drive around neighborhoods to discover owner-sold homes. This proactive approach expands your options and helps find properties that suit your needs.

Visit the Property
Once you find a promising home, schedule a visit to inspect it thoroughly. Working with an agent usually facilitates showings, but if you’re unrepresented, contact the seller directly. During the visit, examine the property carefully, ask questions about its condition, location, and history, and identify any potential issues or repairs needed.

Present an Offer
After evaluating the property, work with your agent to submit a formal offer. Include your proposed price, earnest money deposit, and terms of sale. The contract should specify how the deposit will be held—either by your title company or the seller—ensuring funds are protected during closing.

Add Contingencies
Consider including contingencies to safeguard your interests. Common contingencies include home inspection, appraisal, and title review. For example, a home inspection contingency allows you to back out or negotiate repairs if significant issues arise. The CLUE report, which details insurance claims over seven years, can reveal hidden problems like foundation damage or flooding risks.

Get a Professional Inspection

Before finalizing your purchase, hire a professional inspector to assess the home’s condition. They evaluate structural integrity, appliances, and major systems. If issues are found, you can negotiate repairs, request a credit, or reconsider your offer. Once inspections are satisfactory and your mortgage is approved, proceed to closing, paying the down payment and closing costs.

Buying owner-sold homes can save some costs but presents unique challenges, especially without an agent. Conduct thorough research, monitor properties, and consider working with a professional to prevent overpaying or encountering unforeseen issues during the transaction.