Who has bought a house by owner?

[TNDemo]

We are considering offering a contract on a house that is for sale by owner. There are plenty of downloadable contracts out there. I am wondering if I need to get a lawyer for safety sake.

It went on the market yesterday. I saw the sign yesterday afternoon, my husband called to make an appointment to see it and the guy called back about 9:00 last night. He said someone had already seen it that day and was on their way bringing over a contract. My husband asked about the particulars (pending, etc.) of the contract he was getting and the guy said he didn't know, he hadn't seen it yet. He said he was going to be out of town today but his wife could show it to us at 6:00 today. So it may already be sold.

He has underpriced it and I think has underestimated the market. I don't think he would be willing to split any money with a real estate agent since he is having this kind of response.

I sold my mother's house by owner a few years ago (long distance) and don't remember anything being a big deal. I even did the closing long distance. I know I need to have whatever contingencies are in there and the inspection requirement and probably a disclosure. I downloaded a form from findlaw.com. Should I get a lawyer and use their form? What would a lawyer do for me?

[ihaveaquestion]

1. Get a lawyer. It's worth it to have them do all the paperwork for you.

[Nicholas D Wolfwood]

2. Definitely get a lawyer

It's way too much money to fuck around with by yourself. Not having a real estate agent is one thing - not having a lawyer is another altogether.

[madmax]

3. Lawyer fees for a house closing are relatively cheap.

I've paid about 350. for a closing. I doubt you paid more than that. Worth it especially if the seller gets flakey.

Good Luck.

[Arger68]

4. Definitely get an attorney.

Also, I don't know if your state requires a home inspection or not, but I'd get one no matter what. It could be the best money you ever spent. I have a real estate license and strongly recommend this to all home buyers!!!!!

[Malikshah]

5. We bought our house via BuyOwner

We did the www.buyowner.com route-- it's a bit different than FSBO that you describe

The BuyOwner site might have some paperwork available, or may be able to answer some of your questions.

[DancingBear]

6. Get a lawyer! Get a lawyer! Get a lawyer!

I hope I've made myself clear. :)

Seriously, over the years I have bought several homes FSBO (For Sale By Owner) as investment properties. I have a pretty good knowledge of real estate, and I would NEVER proceed without an attorney.

Lawyers do work such as title searches, mortgage liens (example: perhaps there is a contractor who never got paid, and has put a lien on your house-to-be), mortgage prep, litiigation/mitigation if necessary (perhaps the home inspection will show things that need to be attended to, and there is a "differece of opinion" re: costs, amount of repair, etc.), and countless other things.

DO NOT EVEN CONSIDER following through on any type of FSBO (or conventional realtor) purchase without an attorney who specializes in real estate.

[qb]

7. Definitely hire a good independent house inspector.

We bought a house by owner, and are very happy with it, but I think they did it that way to get around some disclosure issues (They said their realtor friend actually suggested they sell it "by owner", but they made it sound like "You guys have done this before, I think you're ready to do it yourselves.").

Luckily, our inspector noticed a small drip from the pressure release pipe on the boiler and low pressure. The boiler needed major work to even be safe.

He also saw indications of exhaust leaking from the top of the water heater. It turned out the entire exhaust stack had collapsed inside the chimney and had to be replaced.

Luckily, we caught this in time and the sellers had to have the work done (over $2,000).

We found out a year later that they fudged the square footage numbers because much of the 3rd floor ceiling is too low to be considered "liveable" space.

One final suggestion: Most contracts have a statement that says anything that is attached to the walls during the showing stays with the house. Make sure everyone is aware of this. We've bought two houses, and both times the sellers have felt compelled to rip out the beloved improvements they've made (shelves, curtain rods, light fixtures, etc.) even after this wording was made clear to them. By the way, we hunted them down and got compensation.

(Edit) Advice on dealing with lawyers: Plan ahead before meeting - get all of your questions figured out and keep it as brief as possible. We didn't really pay attention, and of course our lawyer was in no hurry. We got charged way more than we expected.

[AlCzervik]

8. You really must

hire a real estate attorney and make sure you get a really good inspector and a termite inspector as well.

[tjwash]

9. Get a real estate paralegal to do the paperwork for you.

Trust me, we have done several real estate transactions, and the only one we did not get legal help drawing up the paperwork with, turned into an ugly court battle a year later.


I give myself an asshat for that one...

[ZenLefty]

10. Many title companies require an attorney on a FSBO

I don't know which state you're in, but if you place a FSBO order with a title company in Denver, they require an attorney's opinion letter giving their blessing on the contract, at the very least. In addition to this, they will charge you about triple the nominal closing costs. (It was $650 at one company I worked for, but that was several years ago, and is probably higher now.)

And if you're thinking about going without title insurance: DON'T!!!!! Request an ALTA 1992 Owner's Policy with extended coverage. Typically, the seller is required to pay for this. Also require the seller to provide an improvement location certificate or survey, dated within 6 months. Have an engineer inspect the property, make sure you have enough time for the inspection period and any objections in the contract, make sure the earnest money terms are to your liking, etc.

If all goes smoothly on a FSBO, then there's no problem of course. But whenever a problem arises, that's when things get really hairy. In these cases, the subsequent court costs far outweigh the money that would have been spent on an attorney beforehand.

I've been in real estate over ten years now (I generally handle commercial transactions now). I really wouldn't recommend a FSBO to anyone who hasn't been through the process many times.

[radwriter0555]

11. I have done it, and it worked perfectly, I hired a real estate PARALEGAL

who slid everything through every nook and cranny LIKE BUTTUH.

We closed in less than 30 days, not a single hitch. FIRST we sat at a dining room table, each making our specific wishes and goals known, talked for less than 1 hour covering pertinent points, and voila, it was DONE.

We worked with a known and reputable escrow service, with known and reputable bankers, and it was easy as pie. The paralegal was FANTASTIC, being a licensed real estate broker as well, but NOT for either of us. We agreed to each pay her $1000 for her services.

I won't buy or sell any other way.

[radwriter0555]

12. GET A GOOD BUYERS HOME WARRANTY!!!!!!!!! That is THE single most

critical document you can rely on, for at least a YEAR.

You can get your whole house re-plumbed with it, all the electrical fixed, appliances fixed, etc. The seller pays for it, about $300, and it's worth a MILLION BUCKS. Definitely renew each year as well.