What are some tips for buying a multifamily home for sale by owner?


Quick Answer

When buying a multifamily home that is for sale by owner, it is advisable to have a real estate attorney handle the purchase contract, according to About.com. Having contingencies as part of the purchase contract allows a way out of the purchase should problems arise with loan approval, appraisal, home inspection or obtaining insurance.

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Full Answer

Specifics to consider when purchasing a multifamily home include location, potential rent income, the number of units, cash flow and expenses, advises BiggerPockets. Hire a reputable home inspector to thoroughly inspect all aspects of the home. Get an estimate from a reputable contractor for any repairs the property needs, and calculate those expenses into the expense/cash flow data.

When negotiating a price, offer less than the listing price, and determine what costs the seller is responsible for covering. Prorate costs for property taxes if they are in arrears or have been paid ahead.

Use a third party to hold earnest money, rather than giving it to the seller, says About.com. Have a reputable home inspector do a home inspection; do not rely on the inspection provided by the seller. Purchase title insurance to cover any title disputes that may occur during or after closing on the property.

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