FSBO

[Elmorton]

Has anyone ever bought a house that was for sale by owner? What was your experience? What were your expenses to do this? What surprised you/was different about the process that was different from working with a realtor?

 

[applequeen]

We did... and I was surprised at how easy (and fast it all happened... from the date we made the offer to the date we closed was 2 1/2 weeks).

For us it was easy but we sort of knew the owners (we are friends with their granddaughter and learned about the house through her) and they really wanted us to buy the house. They were a very family oriented couple who have sort of adopted us into the family since buying the house.

I bought one of those "Home Offer" fill in the blank forms from Office Depot and made a few changes to it to suit our needs (inspections and that sort of thing) printed it out and we took it to them and all signed it. I should say that I had my sister (an attorney) look over it to make sure it was OK and she found no issues with it (those contracts are so general and very simple). In our case the purchase was very straight forward and there were no issues. No one was living in the house so we could close whenever we wanted to. We paid all closing costs (except for the seller''s portion of the title insurance). We were getting a great deal on the house so we were fine with paying all of them (the couple had actually received a verbal cash offer for quite a bit more than ours but since they wanted us to have it they refused that offer).

I called a local attorney''s office to arrange the closing and they (and our mortgage company) took care of the rest. I''m a control freak by nature and I was sort of freaked out that I didn''t (couldn''t) do more!

Maybe you could go ahead and find the attorney for closing and ask them to look over the contract before you present it.

 

[dancingqueen]

I only have a minute before I''m off to lunch, but wanted to quickly respond since I''m familiar with the market here (assuming you are looking in the QC)...

I have sold four homes FSBO and just recently purchased a home the same way. The website QCFSBO is excellent! I can''t say enough about it. The last home we sold cost us less than $1000 in attorney fees compared to the estimated $15,000 in realtor fees??!! It''s a no-brainer to me.

In all my experiences the paperwork was simple and the biggest "hassle" was scheduling appointments with people for showings. I never held open houses. I figure if someone is truly interested, they will call to schedule a time to see it.

This recent purchase was pretty easy too. Make sure to agree up-front about closing time vs possession time. We had a little bit of a "disagreement" with the sellers about that, but it was quickly resolved (and you have those same issues with realtors involved anyway). I have no problem negotiating on my own behalf.

I have to run, but feel free to ask any other questions!

 

[Elmorton]

Thanks for the info!! I''m glad to hear that you both have had good experiences - I agree, it seems like a no-brainer when you realize how inflated houses are because of all the extra realtor fees. I couldn''t figure out why more people don''t do this, so I assumed there must be a "catch."

Anyway, I DO have some more questions

How much are closing costs (and what are those, anyway? I always thought that was realtor fees or something)?

Where have you found your lawyer and what are typical fees?

Is it generally easier to negotiate with the seller? A house we''ve looked at online (and driven by, it''s sortof in our neighborhood) seems to be a flip, so I''m a little worried in that regard - I''ve noticed on the website we''ve been looking at that several are owned by a company, and I''m worried they would be inflexible. Also - how do you negotiate? Do you just stand in the living room and say, "Hey, I''ll give you X?" or is it a more formal process? DH and I used to watch those home purchasing shows on HGTV and TLC all the time, and it seemed like the negotiation process was a very formal ordeal when it was with a realtor.

Is there anything else we should know before looking at a FSBO?

DQ, DH and I were SO turned off by the Ruhl and Ruhl wars around here and realtors that seemed to know NOTHING about the houses they were showing, so we''ve started looking at QCFSBO - the photos and info on that site are so much more complete than anywhere else, too. Is that how you''ve found your house/s?

 

[applequeen]

It freaked me out that it seemed to be so easy. I just kept thinking that we must have left something out... but we didn't. Really after the offer is made and accepted the lender and the attorney do the rest.

Closing costs are a variety of costs (any realtors want to help me out

).... things like various fees from the lender and the attorney (you really dont' get a choice about these), appraisals, prepaid insurance or property taxes, etc. It can also include any "points" you buy for your interst rate and that sort of thing. I think that the estimate that I've heard is something like you should estimate that closing costs will be 3-4% of the purchase price of the home. In our case that estimate was pretty close. You may want to check on the title insurance since in some cases the seller needs to purchase some (our sellers didn't realize this)

I found the attorney in the phone book (yellow pages). When I called them I asked for an estimate of what their charges would be and they were able to provide some figures for me. I called my sister who told me that (based on what she thought her firm charged) they seemed reasonable.

We'll probably go the same route with any house we buy or sell in the future. Now that I've been through the process I can't imagine paying someone to do something I can do so easily myself.

 

[dancingqueen]

Closing costs on the buying side include appraisal fee, inspections, title and mortgage recording fees, etc. If you are getting pre-approved for your financing, they should be able to give you an estimate before hand. We just sold our last house in June and the buyers worked through a realtor and paid her fee so in that situation, their closing costs (on the buying side) included realtor costs. If you are working with a realtor, and want that realtor to represent you on a FSBO sale, it’s possible if the seller (or you) are willing to pay the fees. Again, I prefer to do it myself and work with an attorney. I’m not sure I answered the question about closing costs, but I would definitely talk to the bank and get an estimate.

I initially found our attorney through a referral at work. (I don’t think there is any reason to not post this online since it’s a positive comment) We use Gallagher, Millage and Gallagher and work with Dave Millage. On the buying side, I only used him to review our “Offer to Purchase” contract. The mortgage company will use their own attorneys for the actual closing. We had the option to also have our own attorney present at closing, but I did not feel that was necessary.

The negotiation process does tend to be more “formal” when realtors are involved, but it doesn’t necessarily have to be. You could absolutely stand in the living room and discuss terms, and then once everything is agreed upon, put it all in writing. In our last purchase, we looked at the home on a Sunday afternoon and decided we wanted to buy it immediately. I called the sellers on Monday evening and said that we wanted to see it again the next day and we were prepared to make an offer at that time. We presented the written offer to the buyers at the time of our second visit.

I wouldn’t be worried about a “flip” house. I would negotiate the same as any other home. You mentioned homes owned by companies? As in relocation companies? If so, they are typically listed with realtors and you would make the offer through the listing agent or through your own realtor. If you are referring to homes for sale by builders, etc., again I would negotiate with them in the same manner as any other home.

In case you are not aware, you can do a lot of research on the Scott County tax assessor’s website. It lists all the sale transactions of homes so you can see the last time it sold and price.

I used QCFSBO to sell my condo and my husband’s (when we first got married) and then we just used them again in June to sell our house. The site is great and the pictures are so much better than the local realtor sites. Our current home was not even officially “listed”. The sellers had just put a sign in the yard and were planning to try that for a few weeks before doing anything else and we snatched it up right away!