You’re pre-approved for a mortgage and you’re looking to buy a home. Buying a home can be challenging these days. An in balance in the real estate market means that many homes are selling in bidding wars. If you’re hoping to avoid a bidding war, for sale by owner can be a great option.
For sale by owner is when a homeowner chooses to sell their home themselves without the representation of a realtor. To find a for sale by owner home, you need to know the right places to look.
Here are the best places to start your property search for a home that’s for sale by owner.
Home for sale by the owner on MLS
The MLS can be a great way to find homes for sale by owners in Canada. Believe it or not, homes for sale on the MLS aren’t just homes being sold by realtors. There are also homes for sale by owner up there.
Pretty much anyone can get a listing on MLS. It’s a great marketing tool. When someone wants a listing on MLS, they can pay a company, such as a For Sale By Owner (FSBO) company to get their listing on there. It’s a lot cheaper than hiring a realtor and paying the commission that comes along with that.
You can find homes that are for sale by owner by searching for “private sale” on Realtor.ca. That way you’ll filter and just see homes for sale by owner.
For sale by owner (FSBO) websites
You can also go straight to the source: FSBO company websites.
There are professional companies that help homeowners list their homes and sell them on their own. Examples of for sale by owner companies include Purplebricks (formerly ComeFree), Property Guys and Duproprio (in Quebec).
When you visit these websites, you know that you’re just looking at homes that are for sale by owner. You’re not looking at homes for sale by a realtor. This makes the property search a lot easier if you’re exclusively looking to buy a home directly from the owner.
For sale by owner signs
Look for “for sale” signs in your neighbourhood. You could identify homes that aren’t for sale by owner by making a search on MLS; if it’s not on MLS, it means it’s a FSBO property. Furthermore, in some cases, the sign will include the mention “for sale by owner”, so you don’t even have to look it up.
In doubt, you can also call the homeowner (their phone number should be listed on the lawn sign) and say that you’re interested in learning more about the property and possibly making an offer. The homeowner may or may not be advertising on Realtor.ca, so this can be a great way to find a home that you otherwise wouldn’t have.
Door knocking is a creative way to find homes for sale by owner. If you’re looking to buy in a particular neighbourhood, you could knock on the doors in that neighbourhood and let homeowners know that you’re looking to purchase a home.
You may come across a homeowner who was thinking of listing their home. They may consider selling their home directly to you if you offer them a fair selling price.
Sometimes you’ll be really lucky and find a motivated seller. This is someone who needs to sell because something has changed in their life recently. For example, they might be going through a divorce, a family member might have passed away or they recently lost their job.
If you’re flexible on the closing date and conditions, they may be willing to sell to you because they’re looking for a quicker closing and already have enough to deal with as it is.
Distributing flyers to find your dream home
Another way to find homes for sale by owner is by distributing flyers. You create your own flyers saying that you’re looking to buy a home via private sale in a certain neighbourhood. You could distribute those flyers to the neighbourhoods you want to buy in.
You might get lucky and have some homeowners who are thinking of listing reach out to you ahead of time and offer to sell you their home via private sale.
It’s important to market yourself to homeowners. For example, if you’re a young family, you could include photos of yourselves. Anything you can do to pull at the heart strings can do wonders to improve your chances of successfully buying a home via private sale.
Homeowners often receive plenty of flyers from professional real estate wholesalers/companies looking to buy their home at a discount. You want to be genuine and be clear that you’re a family looking to buy, not a business. This can help improve your chances immensely by connecting on a personal level with the homeowner.
Buying a home from friends or family
Another great way to find homes for sale by owner in Canada is from people you already know. I’m talking about family, friends, coworkers and neighbours.
If you’re looking to buy a home, it’s a good idea to let everyone you know that you are. That way if someone in your network sees a home that’s for sale by owner (maybe they see a lawn sign), they can let you know. Several sets of eyes looking is always better than two sets of eyes.
While having your network looking for a home for you can be helpful, it can also lead to opportunities that wouldn’t have presented itself.
If you let your family know that you’re looking to buy a home, maybe your parents, sister or brother might consider selling you their home as a private sale. It can be a win-win situation.
You get a home and the family member you’re buying the home from doesn’t have to go through the hassle of having strangers go into their home, especially in Covid times. Your family will also know that you’ll take good care of the home and aren’t likely to tear it down.
How do you come up with a fair selling price?
That begs an important question: how do you come up with a fair selling price? Usually, the simplest way to do that is by ordering an appraisal. Usually, an appraisal is ordered for the benefit of the mortgage lender, to confirm the property is worth what you’re paying and to confirm its condition. However, it’s a bit different in this situation.
You’re ordering an appraisal to confirm a fair selling price. The appraiser is an independent third party with no vested interest. The appraiser will confirm the condition of the property and how much the property is worth based on its current market value (how much it could sell for). This gives both you, the buyer, and the seller, your family, peace of mind that everyone is getting a fair deal.