Advice on buying a house w/out a realtor from someone else w/out a realtor!?

Question

Okay, the question may make some believe I'm an idiot for even attempting to buy a house this way, but the house belongs to someone I know and trust, so I feel confident that we are okay to attempt this transaction without a realtor.

Now, my true question is what kind of paperwork and such has to be done and filed? I don't have a clue to just how much "someone" else does and just what "we" can do to close a deal such as buying a house. Does the lender take care of all the paperwork or are there papers and such that I and the seller will have to fill out and file ourselves...something the realtor would have done if we were to have one?

I'm really a novice when it comes to this part. Please advise me as to what we could do to help keep everything easy, complete and more cost effective for my financially struggled home.

Thanks! I can't wait to read your responses!

Ashley

Thank you for your advice. I do know a bit about the procedures needed (such as inspection, appraisal, etc...); I was just not as familiar with the needed paperwork.

You've definitely given me a jumping place to start with. Thanks!

Answer 1

You can certainly proceed with buying this home (from someone that you trust ...) WITHOUT a REALTOR.

However .... since YOU did mention that YOU ARE A NOVICE ... then I would respectfully ask you to CONSIDER the following.

Realtors get paid for the SERVICE that is provided ... based
on THE REALTOR's knowledge, training, and expertise. As
a "novice" you admit that YOU do not possess attributes in
Real Estate.

And .... by the way .... The Realtor's Fee is usually paid out
of the SELLER'S Proceeds. (The expenses that YOU the Buyer would incur ... would be expenses and fees charged by the Title Company and the Lender .... and YOU the Buyer WILL HAVE THOSE FEES ... WHETHER YOU USE A REALTOR OR NOT!)

If you needed to have a Tooth Pulled, needed surgery ... OR
EVEN if you (just) wanted to get your hair done .... Wouldn't
you agree that the outcome would (most likely) be MOST
desirable if DONE by competent professionals ... that have
training and expertise in (whatever) chosen area???

Have you ever hear of someone ... that (for example) tried to
fix their own plumbing .... But then, made the problem WORSE ... and it the LONG RUN ... ended up paying OUT
MORE money???

I will admit .... there are some dishonest, and incompetent Realtors .... But, that is TRUE IN ALL PROFESSIONS ... including Title Officers, Attorneys, Home Inspectors, Appraisers, Doctors, Dentists ....ETC. (That is why ... NO
MATTER what .... You want choose "service people" that
come highly recommended ... Or whose credentials you can
verify!

With ALL that being said .... If you and your trusted homeowner .... would like to NOT involve Realtors .... Then
you need to:

Draft a Purchase Agreement, where ALL parties agree in
writing to ALL of the conditions of the sale. (Does it include
appliances ... will Seller pay any Buyer Costs, how will the
property taxes be prorated .... If your city has requirements
that either buyer or seller MUST meet....) All of this, and MORE needs to be addressed in the Purchase Agreement.

You can go to Office Max (or the like) and get a Purchase
Agreement.

You need to get a Mortgage ... and your Loan Office will tell
you want you need to do (in THAT regard). This will include
YOU having to pay for the appraisal.

You should DEFINITELY hire a private Home Inspector.

Make sure that between YOU and the SELLER that you guys
make sure that ALL city and state required forms are completed. (A Realtor could tell you, based on where you live ... what these forms would be)

The Title Search .... to make sure that YOU receive free and
clear "Title" at the closing is VERY important. You and/or
the Seller need to select a Title Company.

I hope that "some" of what I have said here has been helpful.

Whatever you decide .... I wish you the best in your NEW
home.

Answer 2

Someone else answered that a Realtor could do it for a fee. a Realtor can help, but he/she is not a attorney and cannot practice law without a license. The lender will have the house appraised & will require proof of home insurance. That's about it. Is the home in a flood plain?I am a REALTOR, and if you are going to do the transaction this way then:
1) have an attorney review the contract to purchase
2) get a home inspection
3) get a structural inspection if the home is much older although a newer home can be built under code and when you go to sell it, you may have a problem.
the other post is correct about friendship evaporating instantly. They may not be aware of a defect. He said, she said....here we go!
4) Just like in pre-marriage, the touchy request to sign a pre-nuptial agreement, the seller should fill out a Residential Real Property Disclosure. Mold disclosure, lead based paint disclosure if built before 1978, Radon inspection, etc...
5) is the home in flood plain?

A title search & title transfer, document recordings, surveys and other disclosures the industry may require in your area. An real estate agent can be a buffer in touchy negotiations. I can tell you that 11-12% of home sales are FSBO and half of thoes transactions are between parties that know each other. There is a good reason for that percentage. Ask around to family and friends if they have done, or know of anyone that has done a transaction not involving real estate agent or REALTOR (there is a difference). If you don't feel comfortable, then contact me. I can refer you to one of our branch offices. We are a worldwide comapny in good standing.

Answer 3

You do not need a real estate salesperson. However, you need a real estate attorney to help you out. Real estate salespersons are really expensive, I just did a closing where the realtors charged a whopping 8% for a listing. They got over $35,000.00 for a $450,000 house. On the other hand an attorney will cost $900 to $2,500 to handle all the details including issuing title insurance and performing the closing. In general, you need a signed purchase and sale agreement, financing, appraisal, plot plan, pay sales tax, make sure title is good, property taxes/water are paid, you may need to check a septic system, a settlement statement, a closing, title insurance, deed, recording of the deed. Also, you should get a home inspection to check for termites, structural damages, or any other major problems.
I could do this in my sleep, but I have done thousands of closings. So many things can go expensively wrong, get a good real estate attorney like moi and you will be fine. Real estate agents are funny, most of them are not that good and know just a little bit more than the novice buyer/seller. A very small minority of them are good, fierce, well trained, educated, connected, know the neighberhoods, schools etc. and can help sell properties. The best time to use a real estate salesperson is if you need to find a buyer or need a lot of hand holding picking a house. Since you guys are already ready to buy/sell you do not need a salesperson, you just need someone to help with the technical details.
I eat real estate salesepersons for breakfast.

Answer 4

If you are going to do it without a Realtor on either side, i would highly suggest having an attorney review any contracts and purchase contracts that you sign. There are lots of pages (sometimes in upwards of 30 pages) in a purchase contract for real estate, not to mention all the title papers. 99% of the info will not make any sense to someone who has not been trained in the area of Real Estate Law.

I would highly suggest taking a look at http://www.dontgowithoutit.com if you are going to do anything, even with a realtor. You have access to an attorney without paying $100's per hour for them! Protect your purchase, and your family.

Answer 5

You've gotten some good advice already.

Let me just add this: don't try to cut expenses by skipping the inspection. It's not the same thing as an appraisal -- they look at different things -- and you could be in for a big bad surprise. Be sure your contract includes a contingency for a satisfactory building inspection, and also for satisfactory financing.

Answer 6

the title company is your friend, they do 65% of all the work in real estate transactions anyway! (lenders do the other 35%) Get a fill in the blank purchase agreement and off to the title company with ya.

enjoy your new house.

Answer 7

Actually it would be hard to do this without a professional

If you don't want to use a lawyer a real estate agent could do it for you for a minimal fee

By the way, I would use an attorney anyways - if something huge goes wrong your friendship will evaporate in a second

Answer 8

You probably should have a lawyer involved just to make sure the proper paperwork is completed correctly. Buying a house is a monumental purchase and even though you probably don't want to spend the money, it is probably a good idea.

Answer 9

Find a good title company and let them walk you through the process. Purchasing a house is easier than you think, but there are pit-falls to protect yourself against.