Buying a house privately

[Insane]

Our landlord has decided to sell the place we are living in. The rental vacancies in our town is 0. I'm seriously not exeragerating either. It will be extremely difficult to find another place for our family of 6! The place we are in is small, but at least it is a roof over our heads.

We've decided if we can swing it, we'd rather just buy this place rather than try and find a new place and move. The owner (who are great people, they aren't shaddy at all!) has offered to sell it to us first. We went to the bank and it looks like it is doable on hubby's salary (I filed a proposal so obviously have crappy credit right now). We've crunched the numbers and it would be pretty much the same as our rent (taking into account property taxes and condo fees).

My question is how do you buy a house privately? I know we need lawyers but when do they get involved? Do we negotiate a price with the owners then go to the lawyer to do the offer, or do we go to the lawyer and make an offer that way? He told me a price they'd be looking for, but hubby things it's a wee bit high and wants to offer a bit less. Should we be working out the price first between us or through lawyers?

[Gsxrboy]

Hello, thank you for posting this question.

I purchased my condo privately as well and from my experience it is better to have all your questions answered by the real estate lawyer. They can help you write up the offer letter, do all of the paper work etc. You should also do a search for listings in the area and try to find comparable homes and the prices for them. You may also call a real estate agent and find out what homes in your area are going for, some of them can even give you a free evaluation (as long as you let them know you are going the private route, you don't want to waste their time)

A great resource I use is www.zoocasa.com or any other website to search for homes in your area, also look at for sale by owner, the website will list homes in your area as well by people who are going the private route.

I would also list anything in the home that may need updating, lets say the furnace is over 10 years old, you may need to replace it in the next 5 to 10 years, factor things like that in the price of the home as well. Good luck and going privately will save you money and you will have pride in doing the paper work yourself.

If you have any questions, post them here.

[tjthemanto]

Check out com free for tips on buying a house privately. It has some of the forms you need to purchase privately, like offer to purchase etc. Ofcourse before you close the deal and sign on the dotted line ask your lawyer to go through all the purchase agreements. Also get a TITLE INSURANCE so that there are no liens , outstanding property taxes , utilities etc on the house. Home Inspection might be necessary to, but since you already live there its your call and you need not do it, as you know how the place is, but some things only professionals can find out like mold , structural stuff etc.

http://comfree.com/buy/steps

Forms and Documents :

http://comfree.com/buy/documents

You might have to customize the above for your own needs.

Also look at the various MLS forms to give you an idea and customize them to your need.

http://www.4condosandlofts.com/realestateforms


http://www.4condosandlofts.com/syndi...dSaleCondo.pdf

[Insane]

3 places on our street (they are townhouses, so pretty much cookie cutter houses) recently sold and we know what 2 of them went for. But what is unclear is should we be hashing out the price with the owners before going to the lawyer to draw up an offer or should we let the lawyers hash our pricing?

[tjthemanto]

3 places on our street (they are townhouses, so pretty much cookie cutter houses) recently sold and we know what 2 of them went for. But what is unclear is should we be hashing out the price with the owners before going to the lawyer to draw up an offer or should we let the lawyers hash our pricing?

The lawyers will just close the deal. They won't help you in negotiating the price..you will have to do that yourself or your real estate agent ( but they will charge you a commission or fee for doing that )

Basically you act as your own realtor or agent ..and send the documents back and forth..i.e the offer of purchase.

[Insane]

The lawyers will just close the deal. They won't help you in negotiating the price..you will have to do that yourself or your real estate agent ( but they will charge you a commission or fee for doing that )

Basically you act as your own realtor or agent ..and send the documents back and forth..i.e the offer of purchase.

Thank you. So we could just sit down, discuss our price (hubby thinks it should be 5-10G less than what they are thinking they want for it) then we go to the lawyers to get it all official?

I'm leery of buying our first place without a real estate agent, but it'll save some money and it guarantees we get it, rather than there being multiple offers.

[Insane]

How does one get Title insurance? Does the lawyer do that?

[screamy]

Yes, you can just discuss and agree to the price together. I would suggest (in the strongest possible terms) that you run a title search (your lawyer can do it for you, as can many private search companies) BEFORE you get in to any negotiations with them. Sometimes liens get registered against properties and aren't disclosed ahead of time.

Also, make sure that you document your conversations with the other party in writing (and take notes while you're in the meetings, use active listening, repeat stuff back to them to ensure everyone is completely on the same page, etc.) and ensure you have "subject to confirmation of clear title and satisfactory home inspection" in the offer email. Once they write back confirming their agreement, then go to the lawyers and get them to draw up the agreement of purchase and sale.

Just remember, the lawyers will not give you advice, unless you ask for it (and pay for it). They'll just process the sale for you. I'd also advise that you get a lawyer lined up before you get too far down this path. Having to scramble for one isn't fun.

I'm excited for you!!

[tjthemanto]

How does one get Title insurance? Does the lawyer do that?

Yes the lawyer can do it for you.

When I bought my house I paid the lawyer about 700 bucks all inclusive i.e taxes , disbursements , title insurance etc to close the deal.

[tjthemanto]

Does your bank need an appraisal of the house or something ? Also get a pre approved mortgage if you can , where they will hold the interest rate for you for 90-120 days

[marstec]

I know you've been living in this house, but it's always a good idea to get a home inspection. It should catch things that you might have overlooked, which could save you money in the long run. If you find stuff that needs fixing, you can be more flexible about the final price. Since the owners offered it to you first, sometimes that makes it hard to go down a lot in price. Good luck, hope everything works out for you.

[Gsxrboy]

Before you negotiate the price of the house, please speak with a real estate lawyer. They will have the paper work for the home owner to sign once they agree on the price, simply agreeing to a price without a signed piece of paper is crazy. You do not need a real estate agent to do this transaction, everything still has to go through a real estate lawyer anyways. The only thing an agent can do for you is cash their commission cheque!

[MortgageQueen]

Well, I think you've got some very good advice from your fellow Scer's which always makes me proud. I love that this group is so generous with their time and advice . . .so kudos to all of you above!!
I think you can probably avoid a realtor but definitely should have a reputable real estate lawyer to guide you through this. if you have to pay a few extra bucks more then the next guy, that's not the baddest thing because you are saving the realtor fees don't forget.
Title insurance - a must! but any lawyer knows that.
INspection- preferrable . . . but you can do that on your own. Owner won't pay for it anyway, so why bother bringing it up?
When negotiating, keep in mind you will be SAVING owner considerable cash by no hassle of advertising and extra fees for HIM (i.e. realtor) so you have some room to negotiate there.
My biggest concern thus far is your financing. . . Since you said you have crappy credit, how is your hubby's??? Also,a lender WILL require an appraisal (most likely) Have you made any enquiries yet? Be careful about Lenders pulling your bureau!! Once it's been done a few times, the rest will back off.

[i_forget]

Sorry...someone correct me here if I am wrong or if something has changed...

When I bought my first home, I did not pay ANYTHING to the Real Estate agent. The commission my agent received was split 50/50 with the agent of the woman that owned the house that I bought.

I did have to pay for the lawyer to do the title search and paper work, and the home inspection is always a good idea.

So I am not too sure why you would want to do a sale with them privately....the only one saving money would be the owners because they would not have to pay real estate commission fees.....

[ashedfc]

Sorry...someone correct me here if I am wrong or if something has changed...

When I bought my first home, I did not pay ANYTHING to the Real Estate agent. The commission my agent received was split 50/50 with the agent of the woman that owned the house that I bought.

I did have to pay for the lawyer to do the title search and paper work, and the home inspection is always a good idea.

So I am not too sure why you would want to do a sale with them privately....the only one saving money would be the owners because they would not have to pay real estate commission fees.....

True, there's no R/E salesman making any commission; this is the reason why you get a good bargain (a substantial discount) to the price if you deal privately..
Seller pays the commission normally, but in this case they will be saving about 5.5% so they can pass on some of it to you.. as the buyer..