Home Buying in 91354>Question Details

Mystery, Home Buyer in 91354

How do I buy a house privately?

Asked by Mystery, 91354 Tue Feb 2, 2010

I know this will probably be a hot-button topic for a lot of the realtors out there, but I want REAL advice here. What exactly is involved in buying a house privately, without a listing agent or a buyers agent? How do we go about filling out the correct forms? IF we need to eventually short sell our current home, will the paperwork related to this transaction come back to haunt us somehow? I would appreciate any advice. Thanks!

Help the community by answering this question:


Don't do it! To much liability. Realtors have the expertise....that's why their the professional. Realtors also have insurance. You are listed as the Mystery Home Buyer...it's the Seller that primary bears the cost of the Professional Broker fees. There is no benefit to you.

Nancy Troxell
Nancy Troxell Realty Group
661 810-5600
Web Reference: http://scvrelocation.com
1 vote Thank Flag Link Thu Feb 4, 2010
I just glanced through the other responses posted here..........and for a profession that is sometimes maligned by the public, how nice it is that reatlors are so willing to help..... that so many here took so much time and care to give thoughful advice and suggestions..........Mystery, I hope you appreciate the time and effort many put into their answers

Kudos to all of you! .................And thumbs Ups , too!
1 vote Thank Flag Link Thu Feb 4, 2010
I agree with Mack's first response................I, along with others, respect your right to buy a house privately".......I won't try to talk you out of it, and, you haven't hit any hot button........but I find it interesting that you want "REAL" advice here (in contrast to fake advice??) from agents whose services you don't want.

There is a word called "chutzpah"......if you don't know what it means, look it up.
I think it takes real chutzpah to ask the very people whose services you don't want to pay for.............to explain to you in great detail how to perform a task they do on a regular basis as part of their business.

If you want to do something, privately, on your own............then, by all means, do it on your own!

Best wishes..............
1 vote Thank Flag Link Tue Feb 2, 2010
- I know plenty of investors who buy houses privately all the time.

Sure, Don, but they didn't go onto Trulia and ask, "How do I do this?" Either somebody SHOWED them or they did a few the more regular way and then learned enough to go it alone.

Y'can't learn everything by reading about it.
1 vote Thank Flag Link Tue Feb 2, 2010
Hi there Mystery, not sure what your motivation is in attempting this. But this would be similair to going to court in a lawsuit for the full value of your home without an attorney or any representation. Sure you can legally do it but what % of succes do think you may have. If you are a qualified attoney maybe you could pull it off but if you had no formal legal training what % of success do you think you may have

I would suggest you talk with a real estate attorney and CPA if you are considering this avenue

Wish I could help you though

Kind Regards
Michael Barron
First Team Real Estate
1 vote Thank Flag Link Tue Feb 2, 2010
Not a hot button topic for me at all.

I know plenty of investors who buy houses privately all the time.

Some don't even use lawyers.

However, since you're not an investor (and because even investors should have lawyers), find a good real estate lawyer. He or she will be able to do all the paperwork for you, or direct you to someone who can. It's that simple.

As for your next question ("IF we need to eventually short sell our current home, will the paperwork related to this transaction come back to haunt us somehow?"), ask the real estate lawyer.

I'm a bit unclear on what you mean by "current home." If you mean the home you're buying, whether you used a Realtor or not shouldn't matter.

If you mean the home you're now living in (and that presumably would become a second home or rental once you privately buy another one), then you might find it more difficult to short sell the original home. It wouldn't be your primary residence any more. The lender might want to look at other assets you have. And it might also wonder whether you in fact had encountered a "financial hardship" that would justify the short sale. Again, that's information that's best answered by a real estate lawyer.

If you think that there's even a small chance that this new purchase would result in a short sale down the line (of either property), then my own advice would be: Don't buy. Don't go looking for trouble. But that's your decision.

Hope that helps.
1 vote Thank Flag Link Tue Feb 2, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
HI Mystery,
It sounds as though you are considering short selling your home privately.
I wont say it cannot be done. I will say it is difficult to be done.
banks generally speaking are already suspicious of all short sales.
If it is not an arms length transaction you may be looking for an attorney to help you.
If it is a transfer amongst someone you know and not in the open market you might look for a criminal attorney for fraud. I am not going to give legal advice except to say consult a real estate attorney to transfer real estate.
You should consult an attorney and a CPA if your home is underwater to find out which option you wish to choose.

Harold Sharpe
So Cal Homes Realty
(951) 821 8211
1 vote Thank Flag Link Tue Feb 2, 2010
I don't want to buy Bobby Flay's cookbooks, you know, I just want to know what the recipes are and what equipment he uses and how to prep the food and have some serving suggestions.

I think I speak on behalf of the Professional Real Estate Community, in that We respect your desire to buy a house without the services of a licensed Real Estate Professional.

So, I will not offer those services here. I will suggest, however, that if Professional Real Estate Licensees will not help you for free, that kinda leaves only the non-professional, which isn't really all so much help.

Please understand that We Cannot Advise You on how to Fill Out any kind of forms, whatsoever, unless we're involved in brokering the sale, in which case we can only advise you on the forms that we're authorized to use. Regardless of how much we'd like to help you.
1 vote Thank Flag Link Tue Feb 2, 2010
Dear Mystery,
There are liabilities involved in the transfer or Real Property.
You will need to hire someone to help you. If not a realtor then a Real Estate Lawyer. Problems will most certainly cause headaches for you now...and down the road.
1 vote Thank Flag Link Tue Feb 2, 2010
Hi Home Buyer,
It sounds like you may have a home to short sale 'IF we need to eventually short sell our current home' my husband and I specialize in pre foreclosures, short sales. If a home owner needs to proceed with a short sale they Must be represented by a licensed Realtor. The banks will not accept private party contracts there are laws to protect home owners who are experiencing a hardship from predatory people trying to cut corners with real estate transactions. We offer a free no obligation consultation to show you all of your pre foreclosure options, believe it or not sometimes a foreclosure maybe the best route for a home owner to take. Unless you have a well trained above average agent who understand pre foreclosures you may get the wrong guidance.

That also segways into buying a home without a Realtor. People have many motives for selling a home, as police officer's my husband and I have seen many cases of fraud. Without having a licensed Realtor properly guiding you through a real estate transaction you could open yourself up to being taken advantage of, even if it may be someone you know. Is this person selling the home selling it at fair market value? Are they offering a home warranty? Are they being honest about the properties condition? You need to see the property profile on a property to make sure the bank is not foreclosing on them. There are so many disclosures to go over with a fine tooth comb. You need an agent who knows the area even the tract, there are tracts in Santa Clarita which have had a construction defect lawsuit. There may be other details which affect the condition of the home which may not be disclosed if you do not have a Realtor by your side.
When you are taken to the emergency room with a life or death injury wouldn't you like to be treated by a Doctor who has the training, skills and license or would you like to be treated by a physicians assistant? You want that professional who knows how to treat you and get you back on your feet again not some who is literally practicing on you.
Real estate is a families single largest purchase/asset would you like to know you own a house for the best price with a full understanding of your new home, not a couple months down the road you discover a toxic case of mold growing which clearly was covered up by the previous seller?
We would love to sit down with you and show you all of your options, the opportunity to earn your trust and business.
1 vote Thank Flag Link Tue Feb 2, 2010
To buy a home now, with the thought in your head that you may have to short sell your home in the future: When you go to get qualified for a loan right now, the lender will want to see that your current home has 30% in equity, on top of that, prior to closing on the next home, they'll want to see a Lease agreement for 1 yr signed & then new tenant's security deposit in your bank account.

If you have no equity in your current house right now, but still have the down payment money needed for the next purchase, you will also have to show that you have the income to support both the new payment & your current one, regardless of your obviously renting your current home.

If you CAN support both payments. Buy your next home, then wait a few months and short sell the other. Banks are still taking a risk with the regulations that allow this nice little loophole. Things will also be a little easier if you never refinanced your current house & you still have your original purchase money loans, with no equity loans or HELOCS.

Once you've already closed & are settled in to you new home, short selling your other home won't affect your new purchase. You'll take a credit hit, but it will be better than letting it go to foreclosure. **Depending on who your mortg. is with, it is possible to do the short sale without missing a payment.

I know you got bumped on another property where you Realtor sold it to a 'friend' instead of you. That does stink. You should still use a Realtor when you buy your next home, I know this time around you'll interview that agent a little bit better, ask good questions and make sure you don't end up with a snake in the grass.

I think you can download some standard contracts on LegalZoom.com should you choose to buy a FSBO house.

I'd be happy to interview agents in your area (Valencia) to find a good one for you to work with OR give you a list of questions you could ask them, to find a good one yourself.

562-430-3053 cell
1 vote Thank Flag Link Tue Feb 2, 2010

Definitely a hot button topic for some Realtors, but not a bad question at all.

I'll start by asking you a couple of questions if you don't mind. Perhaps they will help you get to the bottom of your question as well and help you make the right decisions down the road.

1. Exactly why do you want to do it privately? Perhaps to save associated fees? Curiosity? Lack of trust in some real estate agents? Other....?

2. Why would you want to side-step the many years of hands on experiences (successful and unsuccessful) that some Realtors represent? I learned from my family a long time ago that when you embark upon business ventures to take advice from those that went out ahead of you and made costly mistakes--mistakes which I can avoid thanks to their council.

I would really be honest with yourself and find out why you want to embark upon this task. Maybe you already know why. In which case, it may be more important to address those issues first before deciding to take on the task.

To get more direct to the questions that you asked though, I'll try and answer, but given the potential complexity and dynamic nature (in the 5+ years that I've been in the business, none of the transactions were identical, continuing experience and education and broker/peer support is vital) of a real estate transaction, there is no way that this forum could allow me or any other agent to walk you through "what exactly" is involved without an agent or really even come close.

Each state has different contract law, real estate laws, disclosure laws, etc. Filling out the correct forms depend entirely on where you live, what you are selling/buying and the terms and conditions that each party is trying to agree upon. In any case, when you as a buyer or seller wind up in a legal dispute about the transaction or disclosure items if not worse, the courts will determine the prevailing party based on the terms and conditions agreed to in the contract. Are you willing to bet that you or your transaction counterpart have the 'contractual prowess' to protect your interests? If you're not, then go no further.

If you needed to short sell you current home, the bank, the one who actually owns your home but lets you live in it, will REQUIRE that it is listed on the open market by a licensed Realtor. Why do you think the bank would want that? Is it possible that they bank has it all wrong and liquidating a non-performing asset should be handled by someone who as little to no real estate experience or marketing capabilities? No, they know that there is an industry of people who are specialized in the transfer of real property.

If you bought a home without the help of an agent and then needed to sell that home as a short sale, there would be nothing in the original purchase contract that would come back to haunt you. At least nothing that I can remotely think of.

As I mentioned, real estate transactions are dynamic and have many moving parts: financing, inspection, disclosure, marketing, market analysis, timing, negotiations, title perfection, just to name a few.

This isn't to say that you CAN'T successfully buy and sell your own real estate, many people do it very successfully, but they have the experience and savvy to do one of these types of business deals.

Here are a couple stats that you can use to help with your decision. I'm not going to tell you how they apply, I'll leave it up to you and your resources to figure out why these stats are important :) :

90% of buyers start their search online
85% of the homes they see online are involved in some sort of IDX feed (in other words they are being fed to those sites by a local MLS)
Now, more than ever, buyers are using agents to help navigate the process and represent them last I checked 70+%

My advice, spend some time getting to the bottom of why you want to represent yourself in real estate transactions, then once you've identified why, post your reason and I'm sure you can get more Hotbutton feedback about it! :)

Whatever you do, good luck! At any time, feel free to contact me for to discuss some of these issues. Hopefully you can garner some good info from me and hopefully I can garner some good info from you too!
1 vote Thank Flag Link Tue Feb 2, 2010
Mystery this is not a hot button for me. What you would want to do is get in contact with a Real Estate attorney. They can fill out all the paperwork and make sure that things stay legal.
My question is why do you think that you may have to sell your current home as a short sale? To get a home loan anymore most lenders have equity requirements on your current home to prevent the senario that you are talking about.
Web Reference: http://www.Find1Home.com
1 vote Thank Flag Link Tue Feb 2, 2010
As a buyer, you do not pay the Realtors commission. The commission is paid by the seller of the house. The only person saving money by not using a Realtor is the seller. As a buyer, I would have a Real Estate Professional of some sort help you out as their is alot of Disclosures that the seller needs to provide you to protect you to make sure you know everything about the property. If you don't know about the required forms, the seller would not have to provide it to.

Even if you happen to buy a house from a friend, I would still try to have someone look over all of the paperwork to protect yourself. Escrow officers are needed and they can help to some degree but they are mostly a neutral third party. Deals can still be made while still protecting you. Before becoming a Realtor, we sold our house to a co-worker of my husband but our Realtor on our new purchase helped us out making sure we didn't find ourselves in court later.

If you have more questions or you would like me to explain the process in more detail, feel free to contact me via email or phone and I will answer all questions with no obligation.
1 vote Thank Flag Link Tue Feb 2, 2010
Hello Mystery,

Why would you not want to use a REALTOR to help buy your next home. We work for you to get the best price possible. This does not make sense trying it on your own. We are here to help.

If I need my car fixed, would I try to fix it myself , No...(unless it's really simple). I hire a Pro, it's to save my time (aka money).

As you said, your question might be a hot-button, it's not.. If you need help, we are the ones you call. I've been doing this for 20 years and very few people are successfull in doing this all alone. This is the biggest purchase you'll every make, do the right thing.

Call me at 818-885-5615 or 661-505-8787
Marc Schwartz DRE#1074603
Prudential California Realty

PS. Doing a Short Sales is a 100% hire an agent to complete!
Web Reference: http://www.MarcSchwartz.com
1 vote Thank Flag Link Tue Feb 2, 2010
As Joan mentioned, when selling your house by owner, seek the expertise of a real estate attorney to ensure that you are protected regarding your legal documents.

If you are looking to buy without the help of a real estate agent, I would strongly suggest that you reconsider. I specifically wrote on this topic on my trulia blog. Feel free to refer to it.

Good Luck!
1 vote Thank Flag Link Tue Feb 2, 2010
I am a Realtor and am scared to death to buy a property without being represented by a Realtor! Your Realtor should be there to ask the questions you don't know to ask or are ashamed to ask. We as Realtors are paid to represent you as a buyer and thus will do whatever it takes to protect your best interest.

Buying without a Realtor may lead to buying a home that does not have clear title, may have mold issues, may be located in a hazardous zone, may have termite issues, may have neighborhood problems that would have been disclosed. Problems can occur with or without a Realtor but chances are you will have more of a recourse having your rights promoted and protected by your Realtor.

Buyers and sellers are more apt to do things on each others word and a hand shake. The stronger negotiator will be at a strong advantage. Your Realtor, as a buyer, gets paid by the seller. You will most likely not save money and put more money into the seller's pocket. A great Realtor will return more value by negotiating for you, keeping you out of court and being your go to person for the rest of your life!!!

Looking for a "Great Realtor" call,

Tony Lewis
RE/MAX of Valencia
Member RE/MAX "Hall of Fame!"
http://www.TonyLewis.com - Learn about Valencia, Stevenson Ranch & all of the Santa Clarita Valley.
Web Reference: http://www.TonyLewis.com
1 vote Thank Flag Link Tue Feb 2, 2010

Contact a local attorney and see how much they charge to facilitate a sale. Will also need to run title, get a mortgage, home inspection and do some conveyancing.

So your next step would be to call an attorney and see what they charge.

1 vote Thank Flag Link Tue Feb 2, 2010
If you were going to buy privately, at the very least you need a real estate attorney. In my part of NJ, even with an agent, attorney's are almost always used.
I'm wondering- do you have a specific house in mind? I have no idea what the percentage of For Sale By Owner's are by where you are but you are going to be picking from a small percentage of all homes on the market out there.
If you are in a potential short sale situation now, how would you finance a new house?
Generally speaking, its perfectly possible to do a real estate transaction without an agent as long as you get as much knowledge on the process from start to finish before you begin. However, it seems you have other things you need to get in order first before you attempt something like this.
1 vote Thank Flag Link Tue Feb 2, 2010
Any one can buy or sell home on their own. But you are running a high risk. If you are buying or selling 10-20 homes a year in the same area, you may not need any Realtor at all. If you are a buyer, you have nothing to loose, you not paying Realtor commission, and they will give you every information you need to make the best decision on home buying. If I am a buyer, I will definitely call a Realtor or an agent.
1 vote Thank Flag Link Tue Feb 2, 2010
M Dean - this question was asked back in February.

It would be interesting to know how successful Mystery was on his own, or if he ultimately listed with an agent.
0 votes Thank Flag Link Sun Jul 4, 2010
Nice question mystery guest,

I guess my question is why? Why would you want to do this yourself? Do you feel that the bank will see a benefit in not having to pay agent commissions that they will be more agreeable to the short sale? The bank will request that you get an agent, and often times will refer one to you. The amount of liability in a regular sale let alone a short sale are to great and the bank will require that both parties are represented by agents.
I would be willing to go over your questions and concerns perosnally at a time that is convenient to you. My office is in Valencia. Please feel free to call me anytime.

Dean Vincent
Realty Executives
0 votes Thank Flag Link Sun Jul 4, 2010
A short sale is tough enough to do that I would not advise you to try to do this yourself without professional help. A broker experienced in short sales is your best bet, but if you prefer not to use a broker then hire an attorney--a good real estate attorney in your area. They are hard to find in my area. Ask if they specialize in real estate. The reason you need help has to do with fulfilling your legal obligations as the seller, and fulfilling the obligations in those "forms" which is actually a contract. If you don't know what you've agreed to it will be difficult to know whether or not you've fulfilled your obligations to the buyer, and any required of you by statute in your state. Not to mention your contractual obligations to the bank if it's a short sale. Even if you use a Broker, it would be a good idea to also hire an attorney in a short sale. A good one can negotiate directly with the bank's attorneys and likely save you some costs. Brokers can fill out the blanks in a sales contract, and advise you about the market and in negotiating with the purchaser, help you properly disclose to the buyer what's necessary, but we can't practice law and advise you on the legal consequences of a short sale in your particular circumstances. An attorney can, and should be able to chart your best course with the bank to be sure you aren't paying consequences for years to come. There's a lot more to this than simply selling the home. You signed a ton of papers with the bank. You need to be sure THOSE papers won't come back to haunt you. It's not the Broker's you need to worry about.
Web Reference: http://www.seascapes.biz
0 votes Thank Flag Link Tue Feb 9, 2010
Good Evening Home Buyer,

We Realtors , are here to help you, and find you the perfect home for your needs. We are experienced negotiators, and you'de be protected in many ways, liability?. Specially if you are not familiar with thepaperwork involved in a Real Estate transaction.

You said if you eventually need to short sell your currrent home? Then even worst, you'll need more help!!

I wish you, good luck with your decision!

Merlin Barrientos
Realtor Associate
Keller Williams Realty
direct 661 713-8780
0 votes Thank Flag Link Tue Feb 9, 2010
The same way you would prepare to do anything yourself. GET EDUCATED! It sounds to me like you may want to get your Real Estate license. Why not take a Real Estate course so that you really know what you are doing?

Good Luck!

Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Sun Feb 7, 2010
Hi Mystery,

Your question intrigues me for a couple of reasons. First, although there are many situations where a home seller decides to do a "For Sale By Owner" transaction, most FSBOs are more than happy to work with buyer's agents, because not working with a buyer's agent limits your market. It sounds like you are trying to complete the transaction without any real estate agent or their broker involved. More power to you - but my big question is are you willing to take the hit on the sales price of your home, and are you willing to buy a home that is listed with an agent? Second - what is the reason that you are not willing to work with any agents on the transaction? If the money is a reason, you most likely will not save any on the buying side if you choose to buy a home that is already contracted with an agent.

Most real estate agents have access to tremendous marketing resources, to advertise homes out to the marketplace of potential buyers. Additionally, most houses you might want to buy are listed with an agent, and that seller is contractually required to pay their listing agent. So - you will not get a lower price on purchasing a house but you might have to sell your house for a lower price. Additionally, banks are very reluctant to allow a short sale without a listing agent because the limiting of the market may decrease the price that can be obtained for the house.

If you do decide to work without any agents, I highly recommend going to the California Department of Real Estate website and the California Association of Realtors' http://(www.car.org) website to see what paperwork you need, how it must be completed, etc. You will also need to buy the correct forms, as there are many legally mandated disclosures depending upon the type of sale. You will also need to identify title and escrow companies to work with.

Finally, I highly recommend having an attorney look over your paperwork, to see if you have handled all the disclosures properly.

I hope this information is helpful.
Web Reference: http://www.dre.ca.gov
0 votes Thank Flag Link Thu Feb 4, 2010
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