Buying a Home For Sale By Owner

[crystald528]

I am a long time lurker with a question.

DH and I are at the preliminary stages of looking at buying a home for sale by owner. We would like to avoid using a buyer's agent.

If we can come to an agreement with the owner on a price as is, with contingencies for financing and inspection, can we just use a title/abstract company for the necessary paperwork, or do we need a read estate lawyer?

Being in a LCOL area, the price won't be more than $85k so it really shouldn't be that complicated, right? We have professional, full time jobs with great credit, so I am not worrying about qualifying for financing.

Any advice would be appreciated. Thanks!

[pamela]

Price doesn't determine the complications and whether you have to have a lawyer depends on your state.

[takeonyou]

Price has nothing it do with. You need someone to represent your interests since you aren't aware of all the ins and outs of buying a home. I would hire a real estate lawyer to represent yourself.

[Deleted]

You need a buyer's agent

[juliahenry]

If you and the owner can agree on a price and the conditions (make sure you make one of them an inspection!!!) you should both have your attorneys review it as a condition of finalizing the offer.

It is possible and often cheaper to buy without an agent, you just have to take appropriate precautions.

[Deleted]

why don't you want to use a buyer's agent? The seller would pay the fee anyways. If the seller is telling you that they will charge less for a buyer's agent, it is probably because they want an easier negotiation and for you to be less informed.

[Deleted]

You need an attorney to protect youself.
I sold my house myself but each of us had an attorney handle everything. My cost was $600.00 and the price of the sale was $135K

[Bob Loblaw]

You don't need a buyer's agent, but you do need an attorney.

Nov 14, 2012 13:56:51 GMT -5 @missy1 said:

why don't you want to use a buyer's agent? The seller would pay the fee anyways. If the seller is telling you that they will charge less for a buyer's agent, it is probably because they want an easier negotiation and for you to be less informed.

Or because the seller wants to save money, which could be passed on to the buyer? You can be just as informed by doing the research yourself.

[Deleted]

Nov 14, 2012 14:10:20 GMT -5 Bob Loblaw said:

You don't need a buyer's agent, but you do need an attorney.

Nov 14, 2012 13:56:51 GMT -5 @missy1 said:

why don't you want to use a buyer's agent? The seller would pay the fee anyways. If the seller is telling you that they will charge less for a buyer's agent, it is probably because they want an easier negotiation and for you to be less informed.

Or because the seller wants to save money, which could be passed on to the buyer? You can be just as informed by doing the research yourself.

True, but I don't think a lot of buyers are informed, especially if they are first time buyers. Plus, I would want an accurate picture of the comps, which a realtor could provide.

[Deleted]

Nov 14, 2012 14:10:20 GMT -5 Bob Loblaw said:

You don't need a buyer's agent, but you do need an attorney.

Nov 14, 2012 13:56:51 GMT -5 @missy1 said:

why don't you want to use a buyer's agent? The seller would pay the fee anyways. If the seller is telling you that they will charge less for a buyer's agent, it is probably because they want an easier negotiation and for you to be less informed.

Or because the seller wants to save money, which could be passed on to the buyer? You can be just as informed by doing the research yourself.

I meant she needed a buyer's agent in the way that there is a lot to worry about when buying a house and the BA will take care of all of that. And it's free for her. A seller, IMO, should understand that most buyers are going to have a realtor.

My mom always sold our houses by owner and always paid the BA fees.

[aurora]

I would not have felt comfortable buying our first home without a buyer's agent. We might consider not using one in the future if certain circumstances occurred that would make it simple, but a low price definitely isn't one of them.

[crystald528]

Thanks for all the responses.

The seller hasn't said anything about using or not using an agent. We would just rather avoid it if a lawyer can work through it for us. If we decide this is the house we want and we can negotiate with the seller to find our price, is there anything else that a buyer's agent will bring to the table, other than comps?

I would assume that even though the seller will pay the buyer's fees, wouldn't that cost be passed on to us indirectly?

We are not first time home buyers, and feel pretty well informed about the market in the area. This home is similar to ours which we bought in 2009 and I still have that information. They had a hard time coming up with comps for it, because the area is really rural with the town's population at less than 900. I really didn't feel they weren't that valuable last time.

[FWP]

Nov 14, 2012 15:00:20 GMT -5 crystald528 said:

I would assume that even though the seller will pay the buyer's fees, wouldn't that cost be passed on to us indirectly?

Yes.

My bias is the opposite of most - we bought our first home without an agent. It went smoothly but I had a local friend who had done it before who was a huge help. Also, my state has standardized contracts so it was pretty straightforward. We found a title company and lender on our own. We also hired a lawyer to review our contracts and the title, but in retrospect he didn't add a lot of value. We did it to reduce our risks.

[badtzmaru22]

We bought our house FSBO without an agent. We did get a lawyer, which is required here. We also knew the sellers, but I'd buy a FSBO again.

[moolarkey]

You don't have to have a realtor but DO have a lawyer look over your agreement. It won't cost much and will be worth it.

[Deleted]

Realtor chiming in - IF you know your market, and you are comfortable going ahead without comps, then just make sure you get a real estate lawyer. You definitely need SOMEONE representing your interests.

[Deleted]

I will add - I did an interesting leadership in real estate course recently, and a study in Canada (so, possibly but not necessarily applicable to the US) showed that FSBO buyers on average overpaid for their home by 12%. The study was pretty large, using formal bank appraisals too. I will see if I can find it - basically, not only did FSBO's not 'save' realtor fees but they often overpaid.

I find if people have this perception they are saving $$ by going FSBO they don't really care what the comps say.

[pamela]

A BA can also help in making sure that all the little things get taken care of on the right timetable to get you to closing on time. Inspections scheduled, appraisers in, any repairs taken care of, etc.

[Deleted]

We bought & sold our first house FSBO. We had no complications & got the deal of our lives. We paid a relatively small fee ($500-$1000) for professionals to review our docs. It's not always a recipe for disaster. I'd do it again in a heartbeat. I also do my own leasing/property management for our rentals now & it's also fine--we had professionals set us up originally & it's been smooth since.