How to Buy a Home Directly From the Seller

1. Before You Start Looking

Most buyers start by browsing listings. That's a mistake. Before you look at a single home, get three things in order: your finances, your must-haves, and your team.

Your finances. Get pre-approved for a mortgage before you look at homes seriously. Pre-approval is different from pre-qualification: pre-qualification is a rough estimate; pre-approval means the lender has verified your income, credit, and assets and issued a written letter stating the maximum loan you qualify for. Sellers take pre-approval letters seriously. They don't take pre-qualification letters seriously. A pre-approval is typically valid 60 to 90 days.

Know your numbers. The maximum price you're pre-approved for, the down payment you can put down in cash (not counting your emergency reserve), your target monthly payment ceiling (principal, interest, taxes, insurance, HOA), and the cash you'll need at closing (typically 2 to 4 percent of the purchase price, on top of your down payment). Do not stretch, the pre-approval maximum is a ceiling, not a target.

Your must-haves. Write them down before you start looking, bedrooms, bathrooms, square footage, neighborhoods, schools, commute, yard, garage. Distinguish must-have from nice-to-have. When you fall in love with a specific home, writing your criteria down first keeps you accountable to your earlier, calmer self.

Your team. At minimum you'll need a lender and a title company or real estate attorney. In many states an attorney is required or strongly recommended for FSBO closings. Our Local Professional directory lists title companies and attorneys who work with FSBO buyers and identifies which states require attorneys.

Before you sign anything with an agent. Don't sign a Buyer Representation Agreement until you've read the section below on buyer's agents. Once you sign, you may be contractually obligated to pay that agent's commission on any home you buy during the agreement period, including FSBO homes where the seller isn't offering compensation.

2. Understanding Today’s Seller

The seller you're negotiating with directly is different from a seller you'd meet through an agent-mediated transaction, and understanding those differences will make you a stronger buyer.

FSBO sellers are motivated to save money, not give it away. They chose to sell without an agent specifically to keep the ~3 percent listing commission. They've done math on their net proceeds and know exactly what they're willing to accept. A serious, well-documented offer is far more effective than a lowball.

FSBO sellers have done their homework. Most who list on SaveOnYourHome.com used comparable-sales data and pricing tools to set an informed price. Assume the price they set was deliberate, not aspirational.

FSBO sellers are usually reachable directly. You can call, text, or email the seller directly, a huge advantage. A short, respectful conversation about the property, the neighborhood, and their flexibility on terms often reveals more than a dozen agent-forwarded emails.

They often have flexibility on things other than price. They may include appliances, accept a specific closing date, cover repair credits, or flex on the inspection timeline. If you can't get the price you want, negotiate on terms.

FSBO sellers value clean offers. A pre-approval letter, proof of funds, a reasonable earnest money deposit, and a clean inspection timeline signal you're serious. Sellers weighing two offers often pick the cleaner one even at a slightly lower price.

3. Deciding Whether to Use a Buyer’s Agent

The 2024 NAR settlement made using a buyer's agent an explicit financial decision. Before touring a single home, you sign a written Buyer Representation Agreement specifying exactly what your agent will be paid, and that payment is your responsibility unless the seller agrees to cover it. You have three real choices.

Option 1: Go unrepresented. Handle everything yourself, negotiate directly, and use a real estate attorney or title company for contracts and closing. This is the most common approach on FSBO platforms. It can save you the entire 2 to 3 percent buyer's agent commission. In most purchases you'll be working with an attorney anyway, so going unrepresented just means leaning on the attorney a little more for contract review.

Option 2: Use an agent on a flat fee or reduced commission. Some agents work FSBO transactions for a flat fee or reduced commission, professional support without the full 2.5 to 3 percent. Ask agents for their FSBO-specific rate structure before you commit.

Option 3: Use an agent on a full traditional commission. Full-service representation. On a FSBO transaction you'll pay the 2.5 to 3 percent fee out of pocket unless you negotiate the seller into covering it as part of your offer. Ask yourself what specifically you're getting for that money.

A deeper look at Buyer Representation Agreements

Since August 2024, buyers must sign a written Buyer Representation Agreement (BRA) before touring homes. This is a real contract. Read every line, the default version most agents hand you is written to protect the agent, not you. Every term is negotiable.

Duration. Don't sign a long-duration exclusive agreement out of the gate. Best for you is per-home (covers only specific properties the agent shows you). A single-tour or 30-day trial lets you evaluate the agent first. If they insist on a time-based exclusive, cap it at 60 to 90 days.

Termination rights. The agreement must include a clear way to end it: a termination-for-cause clause, a no-fault window (5 to 10 days written notice), and a short "tail" (15 to 30 days is reasonable, 6 months is not).

FSBO carve-outs — critical. Ask the agent to add: "This agreement does not apply to For-Sale-By-Owner properties where the seller is not offering buyer's agent compensation. Buyer retains the right to purchase FSBO properties directly, and no commission is owed to Agent for such transactions." If the agent refuses, that tells you exactly how they view the relationship. Move on.

Compensation and who pays. Compensation should be a specific number or formula, not "market rate" or "customary." The agreement should explicitly state whether you pay, whether the seller may be asked to pay in the offer, and what happens if the seller only covers part.

4. Searching for the Right Home

Search broadly at first, then narrow. Cast a wide net across price, neighborhood, and property type in your first two weeks. You'll quickly learn what's actually available in your price range versus what you imagined. Adjust your must-haves based on reality, then narrow.

Use multiple sources. SaveOnYourHome.com lists FSBO properties. Zillow, Redfin, and Realtor.com aggregate other listings. Craigslist and Facebook Marketplace sometimes have FSBO listings you won't find elsewhere.

Set up saved searches with alerts. In fast-moving markets, homes that fit your criteria may sell within days. SaveOnYourHome.com supports saved searches with instant alerts so you can respond quickly to new FSBO listings.

Drive the neighborhoods. Photos miss things. Drive the streets at different times, weekday commute, Saturday morning, Sunday evening. Notice traffic, noise, and how well neighboring homes are maintained. This data does not appear in any listing.

Tell your network you're looking. Many homes never make it to public listings. Tell people in your target neighborhoods you're a buyer, contact schools if you're moving for a district, and let community groups know. FSBO sellers often surface first inside their own community networks.

Ask the sellers real questions. On FSBO listings you can reach the seller directly. Ask why they're selling, how long they've owned the home, typical monthly utility costs, any major repairs or renovations (with documentation), any known issues, and what the neighborhood is like.

5. Evaluating a Property

Comparable sales (comps). Look at what similar homes in the same neighborhood actually sold for in the last 6 months, not list prices. Good comps are same neighborhood (within a half-mile), similar square footage (within 15 percent), similar age, condition, and lot size, sold within 6 months. On SaveOnYourHome.com, our AI valuation tool (coming soon) will generate a valuation based on nearby comparable sales.

The list price is a starting point, not a fact. Some sellers price aggressively low to generate multiple offers; some price high hoping to negotiate down; some price accurately. Comps tell you which one you're looking at.

The mortgage math. Run the actual monthly payment at the current interest rate, including principal, interest, property taxes, insurance, and HOA fees. Make sure the number fits your budget with room to breathe.

The condition assessment. Walk through with a critical eye, but you're not a home inspector. You can assess cosmetic condition, obvious water damage, approximate systems age, and general maintenance signals. You can't assess structural integrity, roof condition, electrical safety, plumbing behind walls, or foundation issues, that's what the inspection contingency is for.

Neighborhood due diligence. Look up school ratings, search the county website for tax liens or code violations, check flood zone status at fema.gov, and talk to a neighbor if the opportunity comes up naturally.

6. Making an Offer

What a competitive offer looks like. A well-supported purchase price backed by your comps, a pre-approval letter for at least the offer amount, proof of funds (redacted for privacy), a reasonable earnest money deposit (typically 1 to 3 percent), a clear closing date (usually 30 to 45 days for financed purchases), and contingencies clearly listed with reasonable timelines.

Price strategy. Your offer price should be defensible with comps. If the home is at $700,000 and comps support $685,000, offer around $685,000 with your analysis attached. Sellers respond well to data and poorly to random lowballs. In competitive markets consider offering at or slightly above list, or adding an escalation clause. In balanced markets, offer at or below list with your comps.

Contingencies to include. Financing, inspection, appraisal, and title contingencies are standard. Every contingency protects you but costs the seller certainty, in a competitive market a seller may accept a lower offer with fewer contingencies. The strongest offers thread the needle: enough protection to keep you safe, few enough to look decisive. Don't waive contingencies lightly.

How to structure buyer's agent commission in the offer. If you want the seller to cover your agent's commission, state it clearly (e.g. "Seller agrees to pay buyer's agent commission of 2.5 percent of the purchase price at closing..."). The seller can accept, reject, or counter. If they reject, you can pay it out of pocket, negotiate a lower price to offset, or renegotiate the fee with your agent.

Writing the actual offer. Use a standard state-approved purchase agreement form, your real estate attorney can provide one. Do not use a generic template you found online. Never sign an offer without reading every page.

7. Negotiating

Rarely does a seller accept your first offer without changes. Expect a counter and plan for it.

Understand what you can negotiate. Price is the most visible variable, but not the only one, closing costs (a seller concession is essentially a price reduction structured differently), closing date, included items (appliances, fixtures), repair credits, and rent-back periods are all levers.

Price versus terms. A $700,000 offer with $5,000 in seller-paid closing costs is essentially a $695,000 offer. A $695,000 offer with a flexible closing date and no repair contingencies might beat a $700,000 offer with tight contingencies. Think in terms of total value to the seller, not just headline price.

Set your walk-away number and stick to it. Before negotiating, decide the highest price you'll pay for this specific home and write it down. Do not exceed it in the emotion of negotiation. There will be other homes.

Respond in writing, always. Work with an attorney. Every counter, concession, and timeline change goes in writing, verbal agreements create disputes. For anything more than a simple back-and-forth on price, have your attorney review the terms before you accept.

8. Going Under Contract

Both sides have signed the purchase agreement. Now the clock starts on due diligence, typically within 24 to 72 hours.

Immediate next steps. Wire your earnest money to escrow (verify wire instructions by phone using a number from the title company's official website, never from an email). Notify your lender and send the signed agreement. Schedule your inspection immediately, good inspectors book out and you may have only 5 to 10 days. Your lender orders the appraisal ($400 to $700, non-refundable). The title company starts the title search (2 to 3 weeks).

The inspection. Attend if you can, walking through with the inspector teaches you far more than the report. Expect dozens of items flagged, not all equal. Focus on structural issues, major systems, water intrusion, safety issues, and pest damage. Cosmetic items are normal, don't treat every finding as a negotiation point.

Negotiating repairs. You have three choices: accept as-is, request specific repairs before closing (adds time and quality risk), or request a credit at closing and handle repairs yourself (usually cleaner). If issues are severe, you may need to walk away and use your inspection contingency to recover your earnest money.

Attorney review and momentum. In states with attorney review periods, your attorney reviews the contract within a set window. Deals fall apart in the gap between under contract and closing, respond quickly, send documents promptly, and push your lender to hit their milestones.

9. Appraisals and Deal Protection

The appraisal is where financed deals most often stumble. It's an independent valuation ordered by your lender; they will not lend more than the appraised value regardless of the purchase agreement.

If the appraisal comes in low. Say the agreement is $700,000 and the appraisal is $675,000, a $25,000 gap. Your options: renegotiate the price down to the appraised value, cover the gap in cash, split the difference, challenge the appraisal with a Reconsideration of Value (provide better comps, costs nothing to try), or walk away using your appraisal contingency to recover your earnest money.

When to push and when to let go. If the gap is small (5 percent or less) and you love the home, splitting or absorbing the gap is often right. If the gap is large (10 percent or more) and you're unsure, take the walk-away option seriously. Overpaying on a home you'll live in for years is a real cost.

10. Closing

Closing is the final act. If you've done the earlier steps well, this is mostly signing.

What you'll owe at closing. Loan origination fees, appraisal fee, title insurance (roughly 0.5 percent of purchase price), recording fees, prepaid taxes and insurance, attorney fees if applicable, prorated property taxes and HOA, and any agreed buyer's agent commission not paid by the seller. Total buyer closing costs typically run 2 to 4 percent of the purchase price, on top of your down payment.

Review your Closing Disclosure. Your lender must provide it at least 3 business days before closing. Review it line by line and compare it to your original Loan Estimate, costs should be similar. Check the interest rate, loan amount, monthly payment, cash to close, and all third-party fees. Fix anything wrong before closing.

The day of closing. Bring a government-issued photo ID, a cashier's check or wire confirmation for your closing funds (never cash), your Closing Disclosure, and proof of homeowner's insurance. Signings take 45 to 90 minutes. Read what you're signing and ask questions if anything is unclear.

How you pay, and how to avoid wire fraud. Verify wire instructions by phone using a number from the title company's official website, not an email. Confirm the wire went through by calling again after sending. If someone emails a "change in wire instructions," treat it as fraud until you verify by phone through a known number.

Getting the keys. In most states you get the keys at closing or once the deed records (same day for cash, 1 to 2 days for financed). The seller should leave keys, garage remotes, HOA fobs, and any home documentation.

11. After the Sale

Immediate first week. Change all exterior locks and garage codes. Update your address with the postal service, employer, bank, insurance, and DMV. Take "as-is" photos of every room for your records. Locate and label the water main, gas shutoff, electrical panel, and HVAC filters. Test smoke and CO detectors, and confirm your homeowner's insurance is active.

First month. File the deed and closing documents somewhere secure. Set up automatic mortgage payments. Confirm whether your payment includes escrow for taxes and insurance, if not, set aside money monthly. Meet your immediate neighbors and walk the property boundary if you're uncertain where it is.

First year. Track home-improvement expenses for future tax basis, review your insurance annually, and plan for maintenance, annual HVAC servicing, gutter cleaning, and a roof inspection every 3 to 5 years.

Your first-year mortgage payments are mostly interest and shift over time. You're building equity slowly at first, that's normal. What matters is that you bought a home you can afford, in a neighborhood you like, that fits your life.