Grande Prairie, For Sale By Owner:

One Strategy for Buying a F.S.B.O.

1. Expect to spend a lot of time looking at houses--you won't have anyone screening properties for you.  This is good; it is part of your education on the local market.  You might want to start a scrapbook with information on houses you have looked at (clippings of advertisements, etc.).  Otherwise you will wonder if you should follow-up on some advertisements--or have you already seen the house!
    
2. If you are lucky, the vendor will have a appraisal for you to look at.  Unfortunately not all appraisals are accurate--the inaccurate ones are often easy to spot, after you have been through a number of houses (see point #1, above). 
    
3. Know what you can afford.  The following link will help you determine how much of a mortgage you qualify for.  Royal Bank Mortgage Calculator
    
   (The seller may have an existing mortgage that the you can take over--but you still have to be able to afford the payments.)
   
   You probably won't find a deal better than 3 1/2 percent below appraised value.  Remember the seller is putting a lot of work into marketing the house.  Also, they are likely getting a bit fed up over people who say the are coming to look, but do not show up (after the house is cleaned up and everything).  
   
   Why is the seller going through all this trouble--it's not because the Realtors don't want to show the house.  Its because the seller is hoping to pocket the Realtor's commission!
   
   So you are unlikely to save the full 7% commission.  You will likely share 50/50.
     
    
4. Watch the "For Sale By Owner" section of the classifieds and of course the listings at this WEB site!  Tell all your friends and co-workers that you are looking for a new home.  On tis site, you can even advertise that you are interested in buying a particular type of house.
     
    
5. When you make an offer, remember price is not everything.  Sure it may be a few thousand more than you expected--but if the seller offers a date that mean you don't have to move twice (because your present home has not been sold), put your stuff into storage, rent a home, lose that rental damage deposit, and finally move a second time into your new place.  Well, that is worth something.  
   
   Those appliances and drapes were not included in the appraised value.  The seller likely can't use the drapes in the next house--and if you negotiate for them they can delay your having to buy new ones.
    
6. When you make an offer that is accepted:

1. write up a temporary contract immediately--so both parties know what has been agreed to (be sure to show the price, appliances etc. included,  and a date the sale will be completed.)   (An informal contract can be found on this web site.)
    
2. Make an initial deposit immediately; it will probably be $1,000 to $5,000.  It would be be best if you can arrange to make it out to the vendor's lawyer .
    
3. The vendor likely won't cash the cheque, but will hand it over to the lawyer.
     
4. Agree on a lawyer you can both see within a week to write up a formal binding contract.  One option is to share the lawyer to save on disbursements (legal expenses).  The down side is if the deal goes bad--you will both probably end up looking for your own lawyers.  Don't even think of doing a real estate deal without a lawyer!  The lawyer will set out the fees for both parties.  As the buyer you will likely pay more since there is a mortgage to be registered.