Dear Real Estate Adviser,
What are some things I should consider when negotiating a price with the seller of a for-sale-by-owner (FSBO) home that could potentially lower the asking price? I am not using an agent.
— Johnny C.

Dear Johnny,
You do have a strong negotiating position in the present market, but FSBO sellers are seldom pushovers.

Your first negotiating tactic might be to mention to the FSBO seller that because neither of you have hired a commissioned agent, you expect to save 3 percent right off the top. Of course, many FSBO sellers will tell you they would have hired an agent if they wanted to sacrifice that 3 percent!

Also, realize that some FSBO sellers interviewed agents early on who told them to expect less money than the owners thought it was worth, so the sellers just decided to take marketing matters into their own hands. On that note, ask the seller what information he based his pricing decision on. If it’s an appraisal, request a copy.

Most of the common negotiation strategies in buying a non-FSBO home are usable in angling for a FSBO. Some may work even better. Because the FSBO doesn’t have an agent to buffer him from leading questions, try to tactfully size up his motivations. If he’s selling because of a job transfer, job loss, death in the family, an ARM mortgage that is adjusting upward or pending foreclosure (or both), odds are he’ll want to move fast and be less likely to quibble. The longer the FSBO house has been on the market, the more the buyer will be willing to negotiate.

Be prepared to support your low offer with prices of comparable homes that recently sold in the area and (or) a list of property defects. There is one caution: Homes that sell off the MLS are generally handled by an agent, but you won’t get the whole pricing picture without some FSBO sales factored in. Check the list prices of a few FSBO homes on the market to round out your research.

And be sure you are prequalified by a lender to make the purchase and let the seller know that fact, but without disclosing the loan amount during the negotiation stage, as you’ll tip your hand on your maximum price. Do let the FSBO seller know that you plan to move swiftly once a deal is struck.

You might consider concessions other than price. Ask for throw-ins such as major appliances, window covers, big screen TVs, closing costs, etc. But make sure all concessions are written into your sales contract. And if you do reach an accord, don’t hand over your earnest money to the FSBO seller. It belongs in escrow or with an objective third party.

Because you’re not using an agent, be sure to ask the FSBO seller how old the furnace and air conditioning systems are, how old the roof is, what types of major repairs have been done in the last few years, what type of septic system is used (have there been any problems with it?), and what, if any, encroachments are on the property. You’ll want to make sure the seller makes any defect disclosures on the sales contract as required by law. Of course, you’ll want to hire your own home inspector (the stricter the better) and possibly a real estate attorney to help you dot the i’s.

But be courteous. Criticism of landscaping, decor, paint and wallpaper will put some owners on the defensive because FSBO sellers often have more of an emotional attachment to their homes than traditional sellers. And don’t get so consumed with haggling that you lose a dream house over a grand or two.

To ask a question of the Real Estate Adviser, go to the “Ask the Experts” page, and select “Buying, selling a home” as the topic. Read more Real Estate Adviser columns and more stories about mortgages.