Buying a house without realtor: advice, BTDT?

[RedSuedeShoes]

We weren't really looking to move right now but it's something we think about doing in the next few years sometime. An acquaintance (mom of a kid from my DS' class whom I've known 6.5 years & totally respect/trust) heard we'd like to live closer to school & offered to sell us their house when they move out of state this summer. I have never been in the house but several friends were very enthusiastic about it & it does sound pretty great. The seller wants to not use a realtor. I'm not especially bothered by that, but she asked me to figure out how we would go about it & I don't know where to start. Anyone have advice for me? It's kind of bizarre to be thinking about negotiations, etc. when we haven't even seen the house! But it could be a unique opportunity. The seller indicated (to me friend) that they'd be willing to sell to us for a better-than-market-value price just to know the house was going to someone they know & trust. They love the house & have put a lot of energy & money into it & she says she wants to be able to come back & visit it! Plus, they're moving to a much lower COL area so they can buy a big house on 11 acres with pool & tennis courts for nearly half what their regular house here is worth!

[Philly Mom]

Find a real estate attorney who does residential homes. They will handle everything. Good luck!

[brittone2]

We did it on the house I'm currently living in. THe PO was in her 70s and her husband died suddenly. We know the people two doors down; they are long time friends and the man was DH's former boss. When they knew PO was looking to sell, they mentioned that they had friends house hunting. The friends two doors down knew we liked their neighborhood. PO had had a realtor come through already, but hadn't signed anything. Essentially we got connected with her via word of mouth.

PO's son was a big time attorney in another state. We opted to use an attorney as well.

Some things we ran into: PO understandably was very attached to her house. She and her DH had had it built; she took a lot of pride in their choices, pointed things out like how they had hand stained the window mullions, etc. She also attached a lot of value to having it custom built even though it is in a subdivision. In reality, those things really didn't make her house more valuable, but in her mind they did, iykwim. I think that's not uncommon, and can be an issue when you buy FSBO because well, sellers tend to overvalue certain things. (my parents sold their house FSBO at one point and I know they did the same!).

We pulled together comps on our own, put together a spread sheet showing garage sizes, square footage, price per square foot, lot size, etc. We came up with a reasonable #, showed it to her (several of her kids were over to "help" her with negotiations). She was offended at our first offer. So yeah, that's where things with FSBO can get weird. She was trying to comp her house to some that had been fully updated, etc. The house we are in has good construction and was built at a time when there was more care taken, the builder is well respected in the area, etc. But it is cosmetically dated. She felt like her "good construction" should be comped higher, but you know, it doesn't really work out like that on a 25+ year old house in a subdivision. Essentially she was overvaluing some of the better features of her house, and while some of those things affect where the house falls in the price per square foot range, etc. she also was having a tough time seeing that it wasn't updated, was going to need a roof within 3 years, etc.

We ended up coming back with a 2nd offer to her, as she never countered. Then, she had a # in her head and was stuck on it, even though our 2nd offer was probably even a bit on the higher side of the range. We also pointed out to her that if she put it on the market, she'd be paying realtor fees, so the gap between what she wanted as a # and our offer really wasn't that far apart. She turned the negotiations over to her attorney son, who thought it was ridiculous that his mom was stuck on a certain benchmark #, but was limited in what he could do. At that point, we were losing patience as we didn't like negotiating through her son, etc. We did finally arrive at a # that worked after a few stressful days. I think she was really fearful that someone was trying to take advantage of her situation, and she also just really valued the house and her memories here. It is tough to remain objective under those circumstances, for sure.

Then the lawyers hashed out the contract, which TBH was insane...it felt like they were trying to outdo one another. The contracts we've done on other homes have never been nitpicked so much, but alas, that's what happened this time. THey got it worked out, but it was rougher than any other transaction we've encountered. Of course, her DS was involved as the attorney, so he was going to make sure his mom was fully protected, understandably. But again, more layers of emotion because family was involved, etc. I think.

We had the attorneys review everything again before closing. We used a title company to take care of the search, etc. and the attorney reviewed that.

I guess my main point is that it can be a great thing, but there is a LOT of emotion involved when you are dealing directly with the owners without realtors as some layer of buffer. With friends, that would be even more complex. That said, I would go through a FSBO transaction again, but it did have layers of emotion that were more intense. After buying a few homes over the years, DH and I found the pickiest inspector we could find via word of mouth this time, etc. We didn't miss having those realtor connections that leave you wondering if your best interest is always being served.

WHen my parents sold their house FSBO, they had an attorney draft the contract, review it ,etc.

[KrisM]

We sort of did it. A friend of mine knew we liked her sub and she emailed me saying she just found out her neighbors were moving. I called the neighbor and arranged to come see the house. They were already working with a Realtor though. We did put an offer on it - lower than asking, but what we thought was fair. They accepted it and their Realtor agreed to cut the commission to only her half (3% total). We found a Realtor who did the offer and the closing for a flat $500.

The seller's Realtor was with us for the inspection (just to unlock doors, etc) and did a couple other things for us. But, since she didn't have to actually market the house at all, I figured it was fine money-wise, since she still got her 3%.

It worked well and we moved in a month later :)

[jjordan]

In my town it is unusual for anyone to use a realtor. We're in NYS, and I think there is a law saying that there has to be a lawyer involved, so most people just take care of the details with a lawyer.

[RedSuedeShoes]

Thanks for all these replies. I will read them more closely tonight. What sites do you like for pulling comps? I'm aware of zillow & RMLS. Anything else I should check?

[wellyes]

We did it. Bought from an acquaintance. We figured what we thought was a fair price based on the market and condition of the house, and then subtracted 6% (realtor fee equivelant). Sent it as a letter to them, they said ok, just needed an independent inspector (recommended by a friend), an appraiser (provided by bank) and an attorney for closing. Worked out well for all involved. They accepted quickly because they had another house they were eager to close on.


I don't remember how we figured out a fair price. Nothing terribly complicated.

[westwoodmom04]

We did it from complete strangers. It was a strong sellers market with rapidly increasing prices at the time. Since they weren't using a realtor they way under priced the house without realizing it(based price on a nine month old sale down the street), so we offered full price immediately after the first open house. My firm at the time provided use of the firm's residential real estate attorney free as a perk, but they tend to not be as expensive as other attorneys. The sellers did not have an attorney, and that made them slightly resistant to suggested changes to documents from our attorney, but that was their choice. The deal went through without any major changes. I don't recall that we had many issues after the inspection, and they agreed to do the few things we asked for.

[westwoodmom04]

I should that when we sold that house and bought our last house we used realtors. With respect to buying, I would much prefer no realtor and an attorney instead. The realtor seemed mostly interested in closing the sale as quickly as possible, and did not give good advice on bidding or inspection issues (so in retrospect we definitely overpaid). A really good agent is thinking long term about referral business, and therefore is a good advocate; a merely average agent is trying to maximize their commission on a deal, which is directly adverse to the buyer's interest. The RE attorney was a really solid advocate for us, which makes sense given he was compensated by the hour, rather than the sales price of the hosue.

[AnnieW625]

Read up on your state's real estate laws, but I am sure it can be done, and done pretty easily you just need to know the normal ins and outs. I think if I were buying I would still want some sort of representation and a realtor will still have contacts for the appraisal, home inspection, and termite inspections.

[westwoodmom04]

Read up on your state's real estate laws, but I am sure it can be done, and done pretty easily you just need to know the normal ins and outs. I think if I were buying I would still want some sort of representation and a realtor will still have contacts for the appraisal, home inspection, and termite inspections.

A good residential RE attorney will be able to provide all references for inspections, etc. . and frankly, because they work with the bank lawyers all the time, are usually better at getting the transaction finalized quickly.

[khm]

A good residential RE attorney will be able to provide all references for inspections, etc. . and frankly, because they work with the bank lawyers all the time, are usually better at getting the transaction finalized quickly.

I've FSBO sold in two different states.

In one, it was a piece of cake. Sold to a stranger, but that state had a FSBO presence, we used a FSBO "store" that assisted with all the paperwork and legalities and helped with the inspections, had systems/checklists in place, etc.

But the second one in a different state? Sold to my brother, but it was HARD and very stressful. The lawyer did not handle or refer anything or anyone. The process was completely different than state 1. He just did the very final paperwork. This state requires the use of a lawyer for title purposes (one of the very, very few states that does things the way they do) and that's ALL the lawyer did. I wasn't able to even find a lawyer who'd act in a more realtor-ish capacity, it just doesn't happen here. I felt bad for their paralegals and secretaries because I know I was a giant pain in the butt because I didn't know what in the world I was doing and I made their jobs difficult. Fortunately, I did know a realtor and she gave me some advice from time to time. State 2 is just way more complicated than State 1 on a good day, and if it hadn't been a family transaction, there's no way I'd have wanted to handle it on my own. It just wasn't like State 1!! FSBO just isn't a "thing" here and it is hard to navigate the system when no one is used to dealing directly with the homeowner, like they are with State 1. That said, we did muddle through. :)

[arivecchi]

We just did this last year. We have a good real estate attorney and we used redfin to find comps. The title company can also handle the closing documentation.

[AnnieW625]

A good residential RE attorney will be able to provide all references for inspections, etc. . and frankly, because they work with the bank lawyers all the time, are usually better at getting the transaction finalized quickly.

Yes, but attorneys are not used in all states. They are not used in California. I was just stating that just in case the op lives in CA or somewhere else where attorneys are not used. It has been 10 yrs. since I last tool a real estate class and 8 yrs. since I bought a home, but I don't think it has changed much and you never hear about attorneys completing sales here. Thought I would mention it just in case.