After the stressful year everyone has experienced, saving money is a priority for many people thinking of a home purchase. But there are some drawbacks from buying directly from an owner, especially in today’s manic market.
First, many sellers will price their home based on the comparisons to a neighbor’s house that might be for sale. There is also an emotional attachment involved over what they perceive is the value of their house.
Next, an appraisal will need to be done at the cost of $600 or more, and if the house is overpriced, you may not be able to go forward with the purchase. Either the seller will have to reduce the price to the appraised value or the bank will insist the buyer come up with the difference before approving the loan.
Owners do not usually know of or have important real estate disclosures that will protect a buyer from possible repair issues, mold, radon gas, water leaks, and more. A home inspection is a must and buyers need guidance with this; the sellers may not be aware of any serious or expensive issues that could cost the buyer or cancel the contract, after money was spent on both an inspection and appraisal.
Always ask questions of the seller: Why are they selling? What is their motivation? Are they negotiable? How soon do they need to move?
When buying a house directly from an owner, there are many items that need checked into, so doing an intensive “homework” is a must. Negotiations will need to be done directly with the homeowner, so there is no intermediary to assist. It can be a stressful process and you are on your own. So, think twice before eliminating a realtor to help you find that perfect home!