If you are just staring out in your house hunt, you may be pondering whether or not you should include houses for sale by owner (FSBOs) in your search. The answer is yes. There are some extra items you need be cognizant of when looking into homes for sale by owner, but these items need not stop you from including FSBOs in your Canadian home shopping expedition.
First of all, home owners that have opted to list their houses for sale by owner are most often not just testing the market. They are serious about selling their homes and can, again in most cases, be taken as such. Houses for sale by owner are still governed by the same laws as houses for sale in Canada that are represented by a real estate agent. Home owners are obligated to tell you the truth in any written or verbal disclosures they offer you.
Home owners selling their houses for sale by owner have most likely not selected to do so on the basis of not being able to afford to employ a real estate agent. Many FSBOs do so because they feel they can represent their property aptly, and can market their property at a fair value without having to pay a real estate agent’s commission fees.
PropertyGuys.com offers a Pay Yourself Savings Calculator online, for FSBOs to utilize in calculating the funds they would save by selling their home by owner, without the help of a real estate professional. According to the savings calculator, on the sale of a home valued $300,000, factoring in a potential six per cent commission, an FSBO would save $18,000 by selling the home by owner.
As would be recommended in the purchase of virtually any Canadian property, when looking to buy a for sale by owner home consider making a conditional offer on the basis of a home inspection. An experienced Canadian home inspector will be qualified to examine the home for any potential, and costly, damages, hazards or needed repairs. A Canadian home appraiser can appraise the home in relation to other comparable properties available on the market and in the area, and alert you to any potential concerns.
Just because the home owner has decided not to employ a real estate professional in the selling of their home does not mean that you can’t employ one to aid you in the purchase of that home. If you are uncomfortable about drawing up an Agreement of Purchase and Sale, or making a conditional offer yourself, you can enlist a real estate lawyer, or notary public, to help you in the closing arrangements of the sale. This is the step of the process in which you need be most cognizant.
Ensure that all of your sale contingencies are defined in your written offer. These may include: home appraisal, financing approval, home inspection, procurement of clear title of the property, approval of the home owner’s disclosures, and confirmation of insurability of the home.
Including homes for sale by owner in your house hunt widens your buying range, and could enable you to land a better deal on your future home. Home owners that are selling their property by owner for the first time may lack in the savvy negotiating skills experienced real estate agents have honed, which could enable you to establish a selling price that is in your favour. Do your research thoroughly, and where uncertain employ the services of real estate professionals to assure that you make your FSBO purchase optimally.