You can certainly sell a house without hiring a realtor. This option lets you save money on commissions. However, you must be prepared to handle negotiation, repairs, staging, and open house events. If you are ready to do that, you can sell your house by owner and often at a reasonable price.
Similarly, it is possible to buy a house by owner. Most buyers do not consider this option because realtor commissions are paid by the sellers. You only need to pay the realtor if you are working with a seller who does not want to be represented by an agent. In that case, you are responsible for your representation, and you will pay your realtor.
Here are a few tips to help you buy a house by owner.
You are buying a house. You need to check a few things:
You cannot go wrong if you have taken care of these few things. The first step is to perform a title search. You can do so by contacting a title insurance company. The company will search the records, and you will get their insurance plan.
You should not hand over the funds directly to the seller. The title company can keep the money save in an escrow account until closing. You might have to fund the transaction charges and property taxes (up to 8 months) in an escrow account.
The process begins after you make an offer. Real estate offers in Chicago are not binding. Since a real estate agent is not involved, you will have to craft the purchase agreement yourself. It is essential to hire a real estate attorney who has experience dealing with such contracts. You should not proceed further without consulting an RE attorney. There are various terms & clauses for you to understand, and it is best to work with a lawyer to avoid confusion.
Your lawyer will guide you about this. You can also purchase the contract online and have it filled by your attorney. However, it is best to create a customized agreement that describes the closing time, down payment, amount of earnest deposit, financial & inspection contingencies, and the closing costs you will pay. Inspection and financial contingencies play an essential role as you do not want to lose your earnest deposit in case the inspection results are not good or if the bank rejects your mortgage application.
It is the buyer’s responsibility to carry out the property inspection. A realtor can only suggest the name of a property appraiser. In the end, it is your job to hire one and schedule a meeting for inspection. If you take a mortgage, the lenders will require that you get the house inspected before signing the contract.
Price negotiation is something you must tackle. You can start by offering a lower price and then negotiate if the need arises. When seeking a reasonable price, keep in mind the listing price, the appraised value of the house, and the inspection report. There is some room for negotiation as the seller is not paying the realtor commissions.
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