Unique situation I have several questions regarding. TIA.
My wife and I were looking for a small starter home that could also be turned into a future rental property. We are currently renting a home that would have worked perfectly for this but at the time our landlord was not sure they wanted to sell. We then started working with a real estate agent looking for homes. Our landlord has now decided they want to sell (FSBO). Since I have been looking at houses for the last several months I believe our landlords price is also well below market value. My questions:
1. The owner is selling FSBO and likely wants to cut out the realtors commission. Thus if I continue with my realtor the cost will be put on me and not the seller (We had signed a contract that we would only work with that particular realtor). Are these contracts just trying to prevent us from using other realtors? Am I still legally bound to using this realtor or can I buy FSBO on my own?
2. I haven't purchased a home FSBO before. Does someone have a checklist or steps of things I will need to do. I know there is a list of things that the realtors usually set up (attorneys, inspection, appraisal, etc.). I just don't want to miss anything.
Thank You Again,
The seller is flying solo but you won't @Josh Falk Don't try to guess why the Seller thinks that they do not need an agent. You want a signed contract with all of the important features - a period to get finances together and a period for inspections, with all of the right language for walking away if your learn something that makes the deal not get to the finishing line. Your agent will have such a contract ready to go. As for the commission, the Seller may be saving the cost of his half, but he will have to pay the commission to your agent.
Analyze the deal as if it was a rental. Add property management fees to the list of expenses. Find out if the rental income would pay the bills.
A plus of working with a FSBO is IF the property has enough equity that the financing could be unconventional, more flexible than a bank. Maybe the Seller would be willing to take a downpayment (enough to pay off his current note balance), one that is smaller than a bank would require, or something like that. It depends on THIS deal and what the Seller and Buyer need to make the deal happen. Later, you might qualify for a mortgage from a bank - following the usual routine of an appraisal and meeting the loan qualifications of income, etc.