Knowing how to buy a FSBO home in Florida is critical to avoid being exploited by desperate or amateur sellers. If you’ve found a potential dream property that is being sold independently by the owner, fear not. You can still make a smooth and successful purchase, but just do your homework first!
Here’s what to keep in mind when you buy an FSBO home in Florida:
The Steps to Buying a FSBO Home in Florida
- Find a property.
- Get pre-approved for your mortgage.
- Consider working with a real estate attorney or real estate agent.
- Prepare for closing.
- Inspect the property.
- Negotiate the price.
- Write the purchase agreement.
- Sign the documents at closing.
Do You Need an Attorney When Buying a FSBO Property in Florida?
You’re not legally obliged to use a real estate agent or a real estate attorney when buying a FSBO home in Florida. But that can prove a brutal mistake.
As For Sale By Owner sellers don’t use real estate agents, there’s a lot that can go wrong. The last thing you want is to be left liable, or out of pocket for a failed sale. A real estate attorney can protect you by drafting a real estate contract that uses contingencies and looks out for your best interests. They’ll also keep the transaction going smoothly from start to finish. At the very least, you should find a real estate lawyer that is on standby for a worst-case scenario.
You can also use a real estate agent, but they’re not experts in real estate law. They’re also often working for a commission, rather than their customer.
Get Pre-Approval for Your Home Loan
Step one! Contact lenders and see what you’re approved to borrow. With pre-approval, you’ll be able to safely calculate your approximate new home budget. Plus, if you have pre-approval you’ll impress the seller by showing you’re legitimate and serious.
Verify Ownership
Sadly some FSBO sales in Florida are scams or wastes of time. For example, we’ve seen listings that were made by the children of the owners to see what the property was worth. There could also be multiple heirs or multiple owners.
Verify the ownership of the property by looking in public record databases, or by asking your Florida real estate attorney.
Submit an Offer
It’s time to make an offer. You should ask the seller what documentation they’d like to see first. Always state that your offer isn’t legally binding until a contract has been signed (as this can avoid confusion with any FSBO sellers making misunderstandings).
Some people suggest offering less than the list price, but this doesn’t factor in current market conditions and pricing. Always look at the current real estate market and do your research as to how much a similar property is being sold for.
Protect Your Earnest Money
When you formally submit your purchase offer, you’ll give an earnest money deposit to a third party (such as an escrow company, title company or law firm escrow).
Never send it to the seller directly. Regardless of the promises they make, as they could keep the money should things go wrong later.
How Do Buyers Negotiate a FSBO Offer?
FSBO sales can see tense negotiations because the sellers sometimes think they know best. By working with a Florida real estate attorney, you can gain expert negotiators to help you gain the best price.
It’s advised that you become informed about the neighborhood and property to work out similar prices.
You can also negotiate for a lower price if you need to make repairs or pay for fees.
How to Write the Purchase Agreement in a FSBO Purchase in Florida
A purchase agreement is a contract that details the terms of the sale. This document is for your protection. It states what should happen and when (including if things go wrong or property defects are revealed).
You can write a purchase agreement yourself, but it’s not advised. One mistake or misinterpretation of wording could leave you liable and left to pay thousands of dollars.
FSBO purchase agreements include:
- A summary of the contract’s purpose.
- Details of the seller and buyer.
- Property details.
- Payment terms.
- Real estate tax details.
- Contingencies.
- Closing date.
- Property disclosure.
- Signature space.
Read our full guide on “How to Create a For Sale by Owner Contract in Florida?” here.
FSBO Purchase Fees in Florida
Fees are also negotiable. You should agree with the seller over who should pay for the relevant fees. You can also use prorations to your advantage. Closing costs usually cost around 3-6% of the purchase price.
When buying a FSBO home in Florida, the fees include:
- Appraisal fees
- Attorney fees
- Credit report fees
- Deposit
- Home inspection fees
- Loan origination fees
- Mortgage application fee
- Title transfer taxes
- Upfront insurance payments
Read Related: Closing Costs Explained: How Much Will You Pay and Who Pays What?
Preparing for Closing
Closing day is the moment when the final paperwork is sold and the keys are exchanged. It’s the day you dream of! But guaranteeing that things go as smoothly as possible requires that you prepare properly. Here’s how:
Always Perform a Home Inspection
When buying a FSBO home in Florida, you should always perform a home inspection in order to confirm the state of the home. This includes analyzing:
- The structure
- The appliances sold with the property
- The plumbing
- Electrical systems
- Windows
- Doors
- Floors and ceilings
- Mold
- Bugs, pest and termite infestations.
Once the home inspection is complete, you can determine if repairs are required. Even if the property is being sold in an ‘as is’ condition, it’s a good idea to perform a property inspection because you might reveal a property
Negotiate Repairs
If the purchase agreement includes an inspection contingency, you should be able to negotiate repairs following the inspection report – or potentially cancel the contract entirely if the defects are significant.
In most FSBO sales, the seller won’t just give way to your demands. It might take a bit of haggling. It can be wise for the buyer to be responsible for the repairs, with the seller lowering their price or providing repair credits in exchange (as if the seller performs the repairs, the potential buyer may be left dissatisfied by the repair quality).
Get Paperwork Sorted
For any FSBO home to be properly purchased in Florida the right paperwork is required. The seller has the larger share, but between the two there should be:
Must Ask Questions When Buying a FSBO Home in Florida:
When looking to purchase a For Sale By Owner home in Florida, we advise asking questions such as:
- Why are you selling?
- How long have you been looking to sell for?
- What’s included with the property?
- What’s the neighborhood like?
- Are there any problems to be aware of?
These questions can reveal a lot about if the property is suitable for your family, but also if they’re a desperate seller who might bend to a lower sale price.
Contact a FSBO Attorney Today in Riverview and St. Petersburg, FL
If you’re looking to buy a FSBO home in Florida, our Florida real estate lawyers can help. From drafting a contract with relevant contingencies to negotiating the price, we’ll help make your dream real estate transaction as smooth as possible.
Free Consultations
Our St Petersburg and Riverview real estate attorneys at Battaglia, Ross, Dicus & McQuaid, P.A. will review your circumstances and ensure your transaction goes smoothly.
