If you have found a house that is being sold by the owner, a FSBO house, the process is a fairly simple one, however the only really danger is a title search. You need to know that the house is owned free and clear and that the seller has not used the equity elsewhere. A clear title is the main priority, or if there is still money owed on the property, you need to make sure on purchase, that the property title is cleared from the lenders books.
There are many companies that can provide a title search quite cheaply, or you can do it yourself by going to your local town records. Typically if there is a problem with the title, there will be a red flag “caveat” on the title which indicates that more investigation is necessary. Maybe the utilities are in arrears and the local council has put a caveat on the house, or maybe it is a bank default. You need to discover all impediments to your owning the title free and clear and resolve them before you purchase.
Most houses have no such problems and it is unlikely the deal you found will have any issues, however the search is crucial. The other thing is that your deposit, which is usually held by the real estate agent until the escrow period, must be held by somebody else. Again there are many escrow companies around.
Finally, there is settlement day, where all parties exchange checks. If there is a bank that is owed money, they are first in line for a part of your purchase check. Typically you will need to cut several different checks. As another option, there are attorneys that can handle all this for you for a fee that is typically much less that a real estate agency would charge.
By: Martin Thomson
Tags: Arrears, Attorneys, Buy A House, Caveat, Checks, Discover, Escrow Companies, Escrow Period, Fsbo, Impediments, Lenders, Local Council, Martin Thomson, Priority, Real Estate Agency, Real Estate Agent, Red Flag, Settlement Day, Simple Steps, Title Search