Home Buying in 07631>Question Details

Otis, Home Buyer in 07631

Found a house that's for sale by owner. They don't want realtors involved. What do I do if the seller just wants to make the deal with?

Asked by Otis, 07631 Sat Sep 24, 2011

lawyers? Been looking at houses for a couple of months with the help of a real estate agent, I'm a first time buyer. I found a house on my own that's for sale by owner, but they just want real estate attorneys. They are willing to give me an extremely low price before they officially put it on the market because the house requires a lot of work. I'm inexperienced with the home buying process and I feel like I need someone helping me that will be on my side of this deal but I don't want to lose the house. I'm hoping for an FHA 203K loan and started working with a mortgage broker regarding financing. What should I tell my agent?

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I see a red flag in that they don't want a realtor protecting your rights as a buyer! There's something to be said when you're looking at buying a fixer upper and the sellers don't want a professional involved. You have a right to inspections and should use every outlet available to check this place out! I would not go without a realtor, even if it means you have to tack on the commission to the purchase price. If they're willing to sell it to you at "an extremely low price" something just sounds fishy! Keep your guard up and I would play hardball, tell them that you don't feel comfortable proceeding without your realtor, and explain that they would only be paying for one side of the commission since they're choosing to go unrepresented. maybe they'll come around if they think you'll walk away if they don't agree. They can either pay one side of a commission now and sell it to you, or they can pay both sides of a commission when they officially put it on the market! Another idea would be to kindly ask your realtor to perhaps take a reduced commission since you found the home on your own and have been doing most of the communicating with the sellers. The most they can do is say no, but in this economy, after the work they've put in with you thus far, I can't imagine they'd let you walk away. Good Luck!
Web Reference: http://www.carolinaone.com
2 votes Thank Flag Link Sat Sep 24, 2011
I agree with Fred, Mack. et. al. Tack on your agent's fee. If the FISBO seller isn't willing to do that, run, and run fast. What your agent does for you substantially offset the cost of paying them. Do NOT buy a FISBO home without an agent, no matter what. You will regret it later.
1 vote Thank Flag Link Mon Sep 26, 2011
Caveat emptor.

It is interesting that you're asking agents for advice on handling your agent.

Shouldn't you be asking why someone would want you to forgo using a real estate professional? I understand that the seller is showing their appreciation because you would save them the cost of marketing. Does that mean you're getting a fair deal? Not necessarily.

You should probably talk to a few contractors, if that's not your area of expertise. An agent, however, is going to be able to tell you if you're going to pay too much for a home. You're probably aware that agents often pair up with other professionals to work on fix and flips. It seems like this would be an example of where agents like this could be of service. Unless an attorney is also a real estate agent, you're unlikely to get this valuable perspective.

Many of us have backgrounds in the home construction industry. We know the questions to ask and this knowledge comes in handy when negotiating.

Are you sure you want to proceed without an agent? You say you are inexperienced. You should consider this move a bit longer.

SuZ
PML
of Longmont, CO
1 vote Thank Flag Link Sat Sep 24, 2011
You should tell your agent, as Fred says, come help me buy this house. They're not offering a commission, so we can tack your commission onto the sales price so I can finance it.

Attorneys are great for a lot of things, but I think a team comprised of a mortgage broker, inspector, attorney, and contractor is understaffed.

All the best,
1 vote Thank Flag Link Sat Sep 24, 2011
I agree with Fred. You pay your agent to represent you. Make sure you get a good inspection and have that as a contingency to the contract. Your agent can recommend a lender who specializes in the different types of FHA 203 loans. Be careful, you don't want to buy a money pit.
1 vote Thank Flag Link Sat Sep 24, 2011
Tell your agent that you will hire them to act as your agent and pay them.

You said it, you are first time buyers. You can't let the seller dictate the transaction. You need representation and a great recommendation for a lender that really knows the 203k.

Best of luck!

Fred
Web Reference: http://fredglick.com
1 vote Thank Flag Link Sat Sep 24, 2011
did you end up buying the house?
0 votes Thank Flag Link Sun Jun 16, 2013
I recommend that you focus on properties that are listed or FSBOs that are cooperating with agents. Regardless of how a seller approaches the sale of their home, they will only attract market value. The issue when they close your agent out of the process is that you proceed without full representation, and particularly as a first time buyer, you will benefit greatly from the support. I find too that when attorneys are handling FSBOs, their fees may be higher, because they are filling some of the void. One important thing you lose is guidance through the offer process - in negotiating price and terms. While the seller is telling you he is willing to offer a very low price, how do you know if it is a fair price without the guidance of market expert....you really don't.

There is nothing stronger than a walk away position - my suggestion it to discuss with your agent - and then to consider telling the FSBO seller you are interested but only if they will work with your agent so that you get the support you need. The seller wants a buyer - and you deserve and will benefit from your agent's expertise, and it sounds to me as though your agent has earned the courtesy.

And in the future, be sure to bring your agent in BEFORE you call or see the home. The chances for your relationship to be recognized diminish greatly if you make contact yourself.


Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Mon Sep 26, 2011
There's nothing prohibiting you from paying a REALTOR for in an advisory role in this transaction.

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Sun Sep 25, 2011
It sounds like you already have the answer to your question. There seems to be some inherent problems with the house. You mention that the owners are willing to give you a low price. It seems like with this fixer-upper, you really should get some professional opinions. Before placing an offer on this house, you should have a realtor go over comparable listings in that area. What are other similarly sized homes in this condition selling for? I don't know if you are really getting a good deal on your end. Be sure to get an inspection done on this property. You have a right to be properly represented especially as a first time homebuyer. If its too good to be true, it very well may actually be! Be proactive and do all your homework before jumping in on this one. Good Luck!
0 votes Thank Flag Link Sat Sep 24, 2011
Many FSBO's try to work this way. Most FSBO's are either frustrated that the home didn't sale with an inexperienced Realtor he listed his home with in the past or he's the type of person who thinks he can do better without a Realtor, usually thinks he wants to do the work himself because he wants to eliminate the comission paid to the listing agent. These transactions can be done but with risk, especially if you are familiar with the process. If the seller isn't willing to work with your Realtor and you still want the protection, and you also mentioned you wanted to go the 203K loan route, you can still use your Realtor and get his fees attached to the closing cost from your end. You should be able to work out a 3% or 2.5% fee for your Realtor assisting you with the closing of your property. In this case, you are still protected with an experienced Realtor, hopefully, that will guide you from beginning to the end of the process.

Best wishes
0 votes Thank Flag Link Sat Sep 24, 2011
I see that you're buying in New Jersey. A Seller's Attorney in NJ will usually charge approximately $900.
But it is the best money you will ever spend. Don't do the deal without one.
The Seller's want to save on commission because the Seller pays the Realtor to do the deal. You won't lose the house if it is meant to be. If it needs a lot of work do not rush to do the deal. You have a right to do inspections.
Good luck
0 votes Thank Flag Link Sat Sep 24, 2011
Classic red flag that they dont want to have a professionl involved and it needs "alot" of work. There is no reason you can not have a buyer agent and make an offer on a fsbo. Your agent which is looking out for your best interests and makes sure all state and federal disclosure laws are met, can not assist you in writing an offer on teh house and include their fee in the price. A lawyer could cost you more than a buyer broker and will not guide you through the buyimng process such as negitiating, home inspection, mortgage, final walk through and closing.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Sep 24, 2011
You can go with a real estate attorney. After all, they write the real estate contracts real estate agents use and they know everything there is to do in a transaction.

1) I suggest getting your own, that way you'll have representation. I live in VA and they charge around $400 to write up the contract and do any negotiations.

2) Ask what their fee for closing is also. Here, it's around $300. (They'll also be able to tell you all of your closing costs). It's usually around 3% if you're getting a mortgage.

3) Be sure to make the contract contingent on a home inspection.

4) A real estate attorney will be able to interpret the contract in case there's anything you don't understand. Something an agent is not suppose to do.

The seller is obviously looking to save thousands on commission. That's probably one reason why their offering you a lower price.

If the home inspection comes back with no major repairs, it may be a good deal.

Good luck.
0 votes Thank Flag Link Sat Sep 24, 2011
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