Author Topic: Have you ever bought a house from someone without a RE Agent?  (Read 4185 times)

AMustachianMurse

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A friend of a friend (no real personal ties with this person) is wanting to sell his house and As you may have seen from a previous post I live in a city where it seems prohibitively expensive to buy. However his house is amazing in the fact that it has a very nice 2br 1ba guest house, that is renting for $1200, and others in the area are renting up to $1500, while 3 bedroom 2 bath houses in the area are renting in between $2000-$2500 .  Houses in the area have been selling for around $500k lately, and I was wondering if we settle on a price is it reasonable to just hire some RE Lawyers to do the due diligence and avoid all the RE agent commissions?  Would something like this save both the buyer AND seller money?   

I did some calculations on http://www.mtgprofessor.com/, at house prices of $500k, and $550k, and found that with a 3.5% down via FHA and 30-year Fixed Rate Mortgage, their calculator spit out $2747 and $3018/month for Principal+interest+mortgage.  So presumably if I could get a price that is sub $500k it would be a good buy assuming that the house doesn't have any major costly repairs to be made. 

FWIW, I would be living in either the house, or the guest house and rent the other. 

totoro

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #1 on: June 03, 2014, 08:55:09 PM »
I've done it twice.  I also recently acted for friends that were making an offer so that I could get the commission and pass it back to them - lawyers can do that where I live.

You; however, don't need a realtor at all.  No reason to pay the commission.  Find the offer to purchase form for your state, fill it in, have a lawyer review it, send it to the seller.  If he accepts you are good to go once conditions are removed.

As for purchase price, only the market will be able to set that.  He may prefer to list it and take his chances in the market than sell it to you for under $500 000.  He may also get an appraisal or have realtors come through and give a market assessment. 

Erica/NWEdible

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #2 on: June 03, 2014, 09:11:07 PM »
We sold our prior home to neighbors when we moved. They were renting, loved the street, loved our home, and we did the transaction with just the escrow company, no real estate folks. They got a great price and we got more than we would have with agent because seller pays all those fees. Everything about the direct deal was very positive. Seller fees on a $500k house could run 30k - avoid that cost, split the savings down the middle and you can get a real win/win situation. Good luck!

AMustachianMurse

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #3 on: June 04, 2014, 08:18:29 AM »
Nice, thanks for the advice you two.

Mississippi Mudstache

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #4 on: June 04, 2014, 08:27:42 AM »
I bought my current home FSBO. The previous owner was great to work with and everything went off without a hitch. I plan to sell FSBO when we move. No reason to pay a ridiculous 6% fee when I'm capable of doing the work myself. My Dad has sold every house he's owned himself as well, so I'm pretty comfortable with the process.

Cpa Cat

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #5 on: June 04, 2014, 08:44:24 AM »
We bought ours direct from the builder. There was no realtor. The bank basically told us what to do. It was totally painless.

Fishingmn

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #6 on: June 04, 2014, 10:52:39 AM »
I'm a Realtor for what it's worth.

Yes, you can absolutely do it without a Realtor in the situation you described. The only challenge is to make sure you are paying the right price. If you have really good comparable sales I'd say go for it. Just realize that it's certainly possible that one of the parties would have come out better had they had someone calculating values and negotiating on their behalf. You will be getting an appraisal so at least the bank will double check that you aren't paying too much.

We bought ours direct from the builder. There was no realtor. The bank basically told us what to do. It was totally painless.

This may not be the whole story. At least in my area a majority of any decent sized builders doing more than 5 homes a year is going to have a licensed agent representing them. If you dealt with them you were just giving both sides of the sale to the builder's agent. Any decent builder knows that they can't afford to get a reputation for encouraging buyers to bypass a Realtor to buy direct to save money. The builder would immediately be blacklisted by Realtors who are engaged by the vast majority of buyers. While buying a "to be built" home usually doesn't involve a lot of negotiations it's still good to have a Realtor assisting since the builder is going to charge the same price either way in the vast majority of cases.

Cpa Cat

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #7 on: June 04, 2014, 11:18:12 AM »
We bought ours direct from the builder. There was no realtor. The bank basically told us what to do. It was totally painless.

This may not be the whole story. At least in my area a majority of any decent sized builders doing more than 5 homes a year is going to have a licensed agent representing them. If you dealt with them you were just giving both sides of the sale to the builder's agent. Any decent builder knows that they can't afford to get a reputation for encouraging buyers to bypass a Realtor to buy direct to save money. The builder would immediately be blacklisted by Realtors who are engaged by the vast majority of buyers. While buying a "to be built" home usually doesn't involve a lot of negotiations it's still good to have a Realtor assisting since the builder is going to charge the same price either way in the vast majority of cases.

Well, I guess he didn't care. He was the one who specifically proposed selling without an agent and then he gave us a discount on the selling price. It was just some house he built and was sleeping in while he built his real house (it was not built at our request, but it was less then one year old). But he had built a good portion of the other homes in the neighborhood - so I have no idea why he didn't have a realtor.

Maybe he was already blacklisted. ;)  He was kind of a weirdo. All he had was a mattress in the bedroom and then a room in the basement chock full of kid's toys (despite having no children). And he told us how he liked to soak in the tub. But whatever. We bought his house - I recall somewhere along the lines, we found out that there were all sorts of liens on it, but he cleared them up.

rebel100

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #8 on: June 04, 2014, 12:15:32 PM »
I don't think anyone has yet mentioned the possible need for a title search and subsequent title insurance.  You want to be sure you are indeed buying exactly what you think your buying.  A survey and home inspection may also be required especially if your going to be financing any portion of the purchase.

I don't think you need a realtor, but a few hundred dollars to an experienced lawyer (real estate attorney), some cash for a title insurance policy, and good guidance from your lender are probably in order.

I live in Florida and can find a lawyer to draw up a simple sale and check the fine points of the deal for less than $1000...money well spent IMO.

totoro

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #9 on: June 04, 2014, 12:22:16 PM »
Who does their own conveyancing?  Title insurance or survey are required as part of bank financing and are part of the standard conveyancing checklist and offer form.  A realtor is not required and does not do the conveyancing.

AMustachianMurse

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #10 on: June 04, 2014, 09:50:41 PM »
How do you find the price homes have sold in the past?

gt7152b

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #11 on: June 05, 2014, 10:57:15 AM »
How do you find the price homes have sold in the past?

Zillow is a good website for this.

TreeTired

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #12 on: June 05, 2014, 11:26:01 AM »
A friend and neighbor mentioned to my wife that she liked our (bigger than hers) house and we should call her if we ever wanted to sell.  Fast forward - we had been looking for a bigger, grander, more  appropriate (LOL, back in the day) house ourselves, and when our lowball offer was accepted we immediately called our friend.  She came over and we signed a standard form contract.   I did first call our good friend and top realtor in town to ask what she thought about the price. Her advice,  "Take it!"    Years later we listed our house with this same realtor. 

Anyway,  that sale went off without a hitch.  We had a willing buyer and a willing seller.

rebel100

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Re: Have you ever bought a house from someone without a RE Agent?
« Reply #13 on: June 05, 2014, 12:51:30 PM »
How do you find the price homes have sold in the past?
I can locate recent sales (many of them) via the local property appraisers website, not foolproof but works most of the time.  A friendly realtor can provide "comps" for a property for free or for a few bucks.  You might try a google search for the local real estate investment club...my local club has an array of folks that will provide comps and even perform other services to newbies looking to play in the real estate arena.  I have no idea how this will play out in a whales vagina...