Are you planning to get a new home?

Perhaps you didn’t intend to buy a home for sale by owner when you started hunting for one. But these properties crop up in the market more than you think as more home owners choose to sell their homes on their own, rather than get an agent.

In particular, they’re most common in Tulsa, Oklahoma, accounting for 12.7% of all homes for sale in that market. And they have some appeal, considering that, on average, they sell for a lower price than agent-assisted homes.

However, these homes come with their own challenges. Here, we’re breaking down all the details you need to know about buying a house for sale by owner.

Keep on reading to learn more!

1. Figure Out if You Need an Agent

First things first: you need to figure out if you need an agent.

The seller clearly doesn’t, and that’s their prerogative. That doesn’t mean that you can’t bring in an expert to help you in your home-buying process.

While it is true that you’ll have to pay an agent’s fees, good real estate agents are worth every penny, as they have certain superpowers you just don’t have the time to acquire–like price negotiation, market analysis, inspection services, and, of course, how to look out for your best interests.

If nothing else, the truth is, real estate is their job. And that means they have time to invest in this process that you simply don’t.

2. Stay Focused

You know the drill when you visit a house.

You get the goat and pony show. You’re led to each room in the house and given its list of virtues.

And you scoff a little bit at this poor design choice, that questionable paint color, that horrifically dated shower tile.

Here’s the thing: when you’re touring a house with a real estate agent, you’re less likely to filter your responses, since the agent hasn’t lived in this house for so many years and isn’t personally invested in the memories made there.

When you’re touring the house with the owner, however, you’re more likely to hold your tongue.

Politeness is a good thing. But you shouldn’t let it prevent you from turning every doorknob and checking the ductwork. This is one of the biggest purchases you’ll make in your lifetime, and decorum shouldn’t stop you from buying the home that’s right for you.

3. Get a C.L.U.E.

Or rather, a Comprehensive Loss Underwriting Exchange.

In simple terms, C.L.U.E. is a claims history database by LexisNexis, and it allows insurance companies to access consumer claims information when underwriting or rating an insurance policy.

So…why is that important?

Well, while you may want to believe the best in people, unfortunately, some shady sellers may try to unload their money pit under dishonest terms.

A C.L.U.E. report will show you if any insurance claims have been filed in the last few years for major damage or disgusting mishaps that the owner didn’t mention.

They require the owner’s permission, and if the owner doesn’t grant permission, run the other way. If their house is as good as they want you to believe, then they have nothing to hide on a C.L.U.E. report.

4. Know Seller Disclosure Requirements

These days, a seller legally can’t try to sell you their house without disclosing any delicate details, weak spots, and major flaws.

That’s because of seller disclosure requirements, which are specific guidelines in US states that specify what a seller is legally obligated to disclose to potential buyers.

While in theory anyone selling their home should be versed in seller disclosure requirements, you shouldn’t automatically assume that they are. And that means it’s on you to know what information the seller has to disclose.

For a full breakdown of seller disclosure requirements by state, Nolo shares more on all you need to know.

5. Get Pre-Approved

Of course, not all parts of the home sale are on the seller.

In fact, a rather significant part of the sale is on you: the mortgage.

For that reason, you should get pre-approved for a mortgage before you go any further with a home purchase, maybe even before you start looking. This means digging up all your old pay stubs, tax returns, and other vital financial documents to hand over to a lender.

Aside from letting you know how much house you can afford, this will show the seller that you mean business (and it’s a primary negotiating tool).

6. Look Under the Rug

When your heart’s set on a home, you don’t want to consider its flaws.

But if you don’t get your potential home inspected, you could buy a house with serious issues.

And listen, we get it. It’s kind of uncomfortable to follow someone around while they poke and prod every square inch of your would-be house. But you need a home inspection to make sure there aren’t any red flags in the house that the seller neglected to mention.

And, as with C.L.U.E., if the seller refuses a home inspection, run the other way. If the house is really worth it, they have nothing to hide.

7. Bring in a Pro for the Purchase Contract

Finally, there’s the purchase contract, which is the starting point of every home sale.

This is the point at which you want to have an expert third party, especially if you’re not comfortable writing one yourself. A real estate agent or a real estate lawyer can do this for you.

In fact, it’s to your benefit to have an expert write the contract for you since they’re experienced in the fine art of negotiating a home sale. This includes figuring out an offer price, contingencies, determining who pays for what and handling earnest money deposits.

Even if you are comfortable writing the contract on your own, it’s a good idea to have a lawyer in the wings to make sure the sale proceeds legally and your best interests are protected.

Buying a House for Sale By Owner

Now that you know all about buying a house for sale by owner, are you ready to purchase your dream home?

If you still need a few tips, no worries. Check out our blog for all kinds of advice, like these five things to look for when buying a house or this step by step guide to buying a house.

Be sure to reach out to us if you have any question.