How to Buy a House from a Private SellerReviewAdvice

How to Buy a House from a Private Seller

So, you finally have made up your mind. You want to buy a house, but instead of going through the traditional channel of enlisting the help of a real estate broker, you want to take things into your own hands and contact the seller directly. This tactic may be economically smart because you could get an affordable price, but beware of transactional pitfalls and other things that could cause you to lose money-and, possibly, face legal trouble if the property seller is not what I would call "someone with impeccable morality and integrity." Buying a house from a private seller also implies that you would not have the help of a real estate broker or use the network of professionals with which a broker typically works. As you go through the home purchase process, pay attention to things as diverse as property location, the importance of hiring a lawyer, and the need to get pre-approval from a lender before initiating the search process.

Get the Lender's Approval or Pre-Approval

You should not be looking for a house if you have not obtained financing pre-approval from a lender. To speed up that process, I suggest you apply for financing at least six months in advance. Roger A., a successful real estate investor in Boca Raton, Florida, says that this interval should even be longer, suggesting that you start shopping for mortgage approval at least nine months in advance.

To kick off the process, talk to your bank. Don't do it over the phone; if possible, go to your bank's local branch and speak with a mortgage adviser. Face-to-face interaction sometimes does wonders, especially in a mortgage context in which large sums of money are needed. Disclose your intentions to the adviser, telling him or her why you need a mortgage loan and that you intend to do the property search yourself rather than seeking the help of a real estate broker. Also, discuss timing with the adviser, and don't forget to mention geographical areas you are interested in.

In a mortgage pre-approval letter, you typically see things like how much money the bank is willing to advance, the validity period of the approval, and other specifications pertaining to the neighborhood and private mortgage insurance.

How to Buy a House from a Private Seller

Find Your Desired Property

Remember, you have decided to do the work yourself that a real estate broker typically takes years to learn, improve and excel at. So you should not expect to master a broker's skills and traits in one day or month. But don't worry; by doing your homework and applying a methodical approach, you can excel at real estate brokering, too.

Understand what a real estate broker does

Read more about essential duties that a real estate agent performs. Visit any online job resource and type in "Real estate broker job description." I like the employment descriptions on My Plan and Career Planner, but I think that other websites provide similarly legitimate portrayals. Read each description carefully, make a list of key tasks performed, and draw up a final document that specifies things that you can do and things for which you need professional insight.

The main idea here is to become familiar with the kind of work awaiting you as you embark on the real property purchase bandwagon.

Visit online classifieds

After expanding your proficiency in real estate brokering, visit online classifieds and start looking. Portals like Craigslist and Yahoo! Homes offer a treasure trove of information you can use to advance your search and quickly find your dream home.

Read local newspapers

The best place, I believe, to search for properties in a specific area is the local newspaper. Delve into the paper's classified sections and review "home for sale" announcements. Highlight properties that you find interesting and contact respective sellers directly. More conveniently, you also can log into the newspaper's website, do the search online, and contact a seller via email.

Visit real estate websites

Real estate portals generally are more replete with property data than what you would see in online classifieds. This makes sense thanks to specialization, so your odds of finding your favorite property on a real estate website are better. Top real estate websites include and Trulia, along with other major property information websites.

Drive through neighborhoods

Gas is not cheap these days, so I would not ask you to conduct your property search exclusively through physical visits. But, at some point, you should hop into your vehicle and go visit each property you may be interested in. That way, you can talk to the property owner, understand his or her conditions, clarify things like sale timing and property worth, and determine whether this is a house and a neighborhood where you want to live.

Don't minimize the power of "word of mouth"

Talk to people you know as you start your property search. Discuss your intentions with friends, relatives, and colleagues, as well as the legion of professionals who are in your network-whether it be in real life or in social networks as diverse as Twitter, Google +, Facebook, and Pinterest. You never know; one of your acquaintances might be in the market to sell his or her house.

Get in Touch with Property Sellers

Once you find a house you like, contact the property seller directly. I always recommend a phone call unless the seller has not indicated his or her number in the advertisement, and only an email or fax number is available. Either way, be professional when contacting the property owner. I know you might be thinking that this is a C2C (consumer to consumer) transaction, but trust me, professionalism and decorum can go a long way toward establishing trust and partnership between you and the seller. This initial trust will prove very important later on, especially when it is time to negotiate everything from property value to closing conditions.

There are a few key questions you should have in mind when talking to a property seller. The below list is not exhaustive, but suffice it to say these questions always apply to any type of property you want to buy:

  • What is the house's current value?
  • Is the seller willing to negotiate the asking price? If yes, how flexible is he or she?
  • Is there any problem with the house? Why does the owner want to sell it?
  • Is the property in a flood plain?
  • Will the mortgage lender be OK with a short sale?
  • Are there ongoing foreclosure transactions in the neighborhood?
  • Can I see the paperwork for all mechanical systems in the house?

Appraise the Property

Now that you have found your dream property, talked to the seller and felt comfortable about the whole conversation, don't just trust your gut feeling and make an offer. The seller could be a nice person who talks well and all, but remember that buying or selling a house is a business transaction, an exercise in which various parties contribute their intellectual wealth to mitigate risks as diverse as economic, credit, and market.

  • To figure out the value of your target property, seek the expertise of a professional property appraiser. This is especially important if you are buying a property in the high end of the income spectrum. If you are buying a house worth $1 million or more, for example, it makes sense to set aside a few hundred dollars to remunerate a professional appraiser.
  • Another alternative is to visit online home value resources, especially the ones you find on websites as varied as Zillow, MSN Real Estate, and Yahoo! Homes. Enter the property's zip code, type and structure, among other elements, to estimate the value of the house.

Hire a Real Estate Lawyer

Enlisting the help of a real estate lawyer is of primary importance. Don't try to play around in the legal area unless you are a licensed attorney or boast several years of legal experience in the real estate market. In other words, don't try to do things on your own-for example, draw up a contract-because a property transaction typically involves a lot of money, and the last thing you want is to be entangled in litigation if things went wrong. So, again, you are better off forking over a few hundred dollars to a legal specialist rather than attempting to take legal matters into your own hands.

Trust a real estate lawyer as you embark on your home purchase expedition. The attorney can help you in various ways, including drawing up a sales contract, negotiating terms and conditions, and litigating fraud cases.

Make an Offer

After identifying your target home and talking to the owner and agreeing on a price, consult with your attorney. Tell him or her what you think overall about the property as well as your willingness to move ahead with the transaction. Your lawyer will then draft an offer to buy a house, which will be submitted to the seller. Try to negotiate as much as you can, and make sure you always double-check with your attorney.

Write Up a Sale Agreement

After you and the seller have gotten a chance to review the draft offer and agreed on all terms and conditions, tell your attorney to finalize the sale agreement. You and the seller will sign the agreement, and this mutual consent will open the gateway to loan approval and transaction closing.

Obtain Your Lender's Approval

Submit the final sale agreement to your mortgage lender, so that your application can be processed and the funds disbursed.


While it may not be easy to buy a house on your own, the task is not impossible-especially if you equip yourself with patience, preparation, research, and curiosity. Tasks involved in a typical real estate purchase transaction provide a reality check for complex processes like home appraisal, contract negotiation, and understanding of terms and conditions. Remember, you can always hire professionals, such as lawyers and appraisers, to help you in your property search and purchase initiatives.

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