Looking to buy real estate? It's worth your while to

Looking to buy real estate? It's worth your while to check out the 'for sale by owner' properties

We all know that the real estate market is flat. Foreclosures are rampant. However, there's an up side to this dismal picture. New home builders are offering some great incentives to lure potential home buyers. You can buy a lot more house for your money these days. Another positive factor is the increase in for sale by owner properties, which can save you many thousands of dollars in real estate broker fees, provided you take the necessary legal precautions to avoid potential problems later.

If you've got an existing home you'd like to sell, but are having trouble in this depressed market, you might consider renting at an attractive price, one which will only make your mortgage payments, taxes and property maintenance costs. With an attractive rental price, you can offer a lease, collecting first and last month's rent and a reasonable cleaning deposit. While other homeowners are trying to make a nice profit on a rental, using this strategy allows you to retain ownership of your home, with your cash flow intact until the market improves.

Your next step is to start shopping for a perhaps smaller home in the for sale by owner market. Sellers are also anxious to save on real estate broker's fees. They are also eager to sell, at a good price. Remember, it's a buyer's market.

Preferably before you start getting serious about looking for suitable homes, it's smart to sign up for a class in basic real estate at your local community college to get a handle on what's involved in home real estate transactions. Talk to the instructor for specific tips and pitfalls you might encounter This gives you a definite advantage negotiating a deal in the for sale by owner markets.

You'll also want to take a look on the net to get additional information on how the for sale by owner transaction works. Then take a look at websites which list such properties to get a feel for how prices compare to real estate brokered homes in the same city or region you're shopping.

When you engage a real estate broker, their fees aren't cheap! Whether you split the fees with the seller, or get stuck with the entire fee of 6% of the selling price, you're looking at thousands of dollars. For example, 6% of $175,000 amounts to a whopping $10,500! In the for sale by owner deal, this fee is wiped out, saving you a bundle of money.

The money saved will buy you a lot of lawyer's fees. When you buy a home on a 'by owner' deal, it is smart to consult a lawyer to apprise you of legal points which a real estate agent would normally handle for you. Some lawyers specializing in real estate transactions, may even provide an initial free consultation. When you make an offer to the owner and it's accepted, insist that any offer and contract be contingent on your lawyer's approval.

Dealing with the owner directly can be much easier and forthright than using a broker as a go-between. Considering the current market conditions, negotiating with the owner can move a lot faster and result in a more equitable price.

Make your own arrangements for a home inspection for the prospective property before making an offer. This step will reveal any show stoppers, as well as providing points of negotiation for lesser, manageable repairs.

Today, concentrating your efforts on for sale by owner properties can be a very smart strategy.

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