Buying a house ';for sale by owner';. how does it work?

I found a really nice, small house for sale by owner(a minister actually). i'm a first-time buyer so how does this work? walk me through the steps if you can!


how much cash will we actually have to pay up front?(not including the mortgage loan or down payment)Buying a house ';for sale by owner';. how does it work?
Hi there, let me answer a little more completely.





Buying a house from an owner is really no different than using a realtor. At least it shouldn't be.





1st you should be pre-approved so that you know you can get financing.





2nd) Make your offer. Depending upon your financing, you may choose to roll closing costs in. The way you roll closing costs into the loan is by having the seller pay back closing costs.





3) Make sure when the contract between you and the seller have two contingencies at least. 1) Home inspection. If the home inspection is not acceptable it should allow you to back out of the deal 2) A financing date. This is a date that you have to provide the seller with confirmation of your financing. Another good idea is to put in a clause that says if the home does not appraise for the amount of the accepted offer, then the seller agrees to sell for the appraised value. A home has to appraise for the purchase price in order for you to obtain financing.





4) Upfront costs - generally a seller is going to want some type of deposit to accompany your offer. $500 to $1,000. This is a good faith deposit. The contingencies above protect this deposit.





When buying a home, a lender is going to require you to purchase one year worth of homeowners insurance upfront. $400 - $1,000.





Home inspection - $250 - $500





Most lenders will require an application fee. Our application fee is $350 but we credit this back to you at closing.





That's a really quick walk through buying a home. Hope it helps.





For more info go to my website www.johnleblanconline.com, my blog http://mortgagecounselor.blogspot.com





Good luck. If I can answer any questions in further detail, send me an email. johhnuniontrust@verizon.netBuying a house ';for sale by owner';. how does it work?
I suggest that you find a lawyer who specializes in real estate. It is not complicated nor too expensive, but you just don't want to make a mistake when buying real estate.





The lawyer can help you write an offer to purchase. That will spell out all the details of your legally binding offer. That includes how much you will pay, when you will close, when the minister will move out, what goes with the house, who will inspect for problems, etc.





In that offer, you will spell out the contingency clause concerning your loan. If you can't get the loan, the deal does not go through. That means the minister might still be able to continue selling the house until you get your money.





The offer to purchase is perhaps the most important part of the process. Make a mistake there and you can get totally screwed. In most cases, it is customary to pay some earnest money upon acceptance of the offer. ($1,000?)





I would try to get pre-approved for a home loan as soon as possible so that if the offer is accepted, you can move fast.





Spend the money on the lawyer...you will not regret the extra protection.
All of that is entirely between you and seller.
Congratulations,on your potential new purchase for sale by owners /fsbo are individuals who opt not to list their home w/a realtor and go it alone.The wonderful thing about this for you is that you can really negotiate a great deal ie:the seller might be more proned to offer bigger discounts because a realtor was not involved .However please do your research to insure you're getting a great deal on home value
Most of the people sell their home through a real estate agent. But you can still go through a real estate agent and the agent will walk you through the steps.
while it is okay for the minister to sell his own home - as an inexperienced buyer, you really should use the services of a qualified realtor. (in california, the buyer doesn't pay the realtor, the seller will) there are issues like full disclosure about the property - will the minister tell you or advise you to get a property, roof and pest inspection? if he knows he has issues with the property and doesn't tell you or claims he didn't know...will you have legal recourse? i don't deny that the r.e. profession has been given a black eye by unscrupulous members, but if you do a little homework, you can find one who will be your resource forever. (think about it, do you change doctors everytime you feel sick? of course not, you go to someone that you trust)





a realtor is your voice and negotiator in the transaction, allowing you to be placed a step away from the nitty-gritty, yet having a full voice in all that goes on.





don't answer the come-ons here in yahoo! answers, but call your local real estate board and ask for the names of reputable realtors and then look them up in your state's database to be sure they are what they say they are! a little legwork and homework will go a long way...





good luck on buying your first home!
Go ask a mortgage lender and a Realtor. Frankly, buying from someone who is selling by owner is usually NOT adviseable, even if it's a minister or someone similar. You really should use a Realtor if you haven't a clue as to what you are doing, and you apparently do not! You will note that the first two responders are having difficulty with reading comprehension, something that is not unusual here on Yahoo Q and A.