Many sellers do not want to list their home with an agent, because they must pay the fees to both their agent, and the buyers. Oftentimes on a house hunt, you will see a home that is “Fore Sale by Owner.” If you see a home that interests you that is being sold by this method, it is normal to wonder how what the difference is, and how to go about it. Buying a home that is for sale by the owner can have its challenges, because you won’t have the benefit of working with a realtor. Here is some advice on how to go about a home listed for sale directly by the owner.

If you have been working with a realtor while looking at other properties, but have your heart set on this one house that happens to be for sale by its owner, know that you won’t be able to ask your realtor for help. They don’t get paid when a home i sold by this method. Even if they want to help you, they can’t. They could lose their license. Agents actually work with other licensed professionals such as home inspectors and appraisers to help you see if you are not only making a good choice, but a good investment, because that’s what a home is, its an investment. They increase and decrease in value. Know that buying a for sale by owner home, you are going into it completely by yourself. 

Before you go out and start looking at houses, you should get a pre-approval letter from a mortgage company. This may seem like a no-brainer, but it is surprising how many first time home buyers don’t do this. This letter is extremely important because it lets the seller know that you can afford to purchase the house. It also is a great way to negotiate. If another interested party doesn’t have a letter, they’ll put you first on the list.

Because you will no longer have an agent, you are going to be directly communicating with the homeowner yourself. Without realtors involved, the owner will be showing you the property. This can make a buyer very uncomfortable, since you basically are going to be hovered over at every moment. You won’t be able to pay full attention when you are walking around the house, because you have someone breathing over your neck. And not just anyone. But the owner. 

You’ve got to get a CLUE Report. This is something that shows you if an insurance claim has been filed for that property within the past five years. You need the sellers permission to run that report, as well. This is an important document, because it will show you any problems the house has had, and let you know which problems you are likely to expect in the future. It will also let you know what you can expect the insurance premium to be every month should you own the house.


Purchasing a house through the owner is a very risky endeavor. Home inspections are always the most crucial part of the home buying process, but even more-so in a case like this. There can be hidden problems that were unknown, or, problems that were known by the seller but omitted altogether. A well-trained home inspector can find many of these problems so that you are fully aware of what you are getting into. Electrical wiring problems, or traces of lead throughout the home are just two small examples. 

You really should have a real estate attorney help you through the sales contract. In some states, it actually is required that a real estate attorney handle both the transfer documents and the closing. Be sure that you are properly represented. Your attorney can ensure that your contract contains contingencies to enable you to back out of the contract, for example if there are problems found during the home inspection, appraisal or with liens.

When you decide that you are fully invested in the house, you must then make an offer. The listing price quoted by the seller may be ridiculous. You want to make sure that your offer is in line with property values in the neighborhood where the house is located, and you won’t have a realtor to help you with that. Just as a seller may be asking too much, sometimes a buyer might be offering too little; you’ll need to obtain a valuation report. 

When you make your offer, you will be required to put down an earnest money deposit check in order to secure the deal. It is generally a very good idea to use a 3rd party that will manage the earnest money. It should go into an escrow account, because if something goes wrong between when you put the money down and the closing, you’ll be more likely to get your money back.

If you see a home that you like, that is For Sale by Owner, you should decide if you really feel like you have to have that specific house. There are many risks involved when purchasing a home in this manner. Try to find a house you like that is for sale through an agent. If you really have your heart set on this one particular home, then don’t hold back. Just be cautious, and get advice through the whole process from a real estate attorney.

For Sale by Owner Homes – Zillow

For Sale by Owner: The Pros and Cons for the Buyer – QuickenLoans

Find a Real Estate Attorney –


  1. Annie

    I bought a FSBO home, and it wasn’t the best experience. Like the article said, realize you’re doing it by yourself. It’s going to take a lot of research, hiring a real estate attorney (you don’t have to, but if you’re smart you will), and great negotiation skills. At the end of the day, I love the home I purchased, but I didn’t love the experience. If you’re determined to have that particular house, go for it! But BE SMART and get a real estate attorney.

  2. David B

    I would never buy a home that was for sale by owner. Seems too shady to me, I’d steer clear. The only reason a seller would do it is to avoid paying a realtor a commission. Based on that knowledge alone, I’d assume the seller would be annoying in terms of negotiation.


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