FSBO Deals 10 posts by 5 users

Posted: 05/29/2008 at 05:25PM

Depending on the State the property is in, the closing can be done by a title/escrow company or an attorney. I do recommend you have an attorney on your team to look over the contract if you are not experienced.
A purchase contract can be available from any re agent, title company, as well as attorneys. Some states have their own standard contracts and others allow any written purchase contract. Remember that all items are negotiable in any purchase contract, regardless if they are " standard" or not.

Posted: 05/29/2008 at 07:22PM

Let's go through some basic assumptions:

1. If the seller is unprepared have a " basic" contract with you.*
2. If the seller is prepared, he'll likely have a contract. DO NOT SIGN ANYTHING (particularly a RE contract) that you don't understand.
3. If you " think" the seller has a reasonable price (most fsbo sellers DON'T in my opinion) try some basic negotiation verbally.

I would suggest you stroll into a Realtor's office and tell them you're thinking about buying a house but you have a bad phobia about signing contracts. Ask them to show you the contract they use and to walk you through the basics of it. Nod appreciably at appropriate times and ask if you can take a copy home. In some states contracts are available online (in fact I think CO has them), and there are many similarities among the various states' contracts.

Go to your library and look up some RE books and see if they show contracts. Go to your local JuCo and see if they offer any RE courses. Quite often they will have lots of them because agents always need to take courses to maintain their professional standing.

I think most states' contracts run to abotu 8 pages or so, as every time someone sues about something the contracts get longer in order to try to prevent that misunderstanding from happening in the future. That doesn't make them hard to understand (prof athlete contracts are generally 60 or more pages long) just that you need to break them down into their basics. Here are the basics:

1. The parties to the contract; seller (him) and buyer (you).
2. The subject property; 123 Main Street, but it will always be identified with the LEGAL description-Lot 1, Block 2 of Running Rat estates, etc.
3. The consideration; that is what your giving him, usually money, generally desribed as, " Ten Dollars and other goods, etc, ie; a mortgage loan in the amount of $100,000" .
4. When the transfer is to take place.
5. Agreement of the parties; both signatures.

I've actually taken a contract with no more information than this to an attorney and/or a title company and had them do their thing.

The rest of the 8 or so pages is legal, financing and " warrant" considerations. Such as what happens if there is a cloud on the title, if he doesn't actually own what he says he owns, what happens if you can't get financing, or you can get financing, but in order to do so the lender wants some work done to the property, what happens if he, or you default.

By the way, in an introductory contracts class it's pretty easy to spend a few classroom hours (plus a ton of homework hours) on each of the following:

Offer
Acceptance
Defensible Title
Agreement

In a " basic" contracts course for Realtors I'd say you'd spend about 16-20 hours on the state promulgated form.

Go to your state's real estate commission site and see if you can download a form. If not I think CO has one.

Lousiana has a lot of different laws on RE (and a lot of other things too) but the other 49 states' rules basically evolved from the English Common Law-in other words what the law was in England at the time of the American Revolution, as amended by precedence and statute.

Good luck, study up and come back at us.

all cash

Posted: 05/29/2008 at 09:29PM

Have an attorney draw up a purchase contract for you with all the regular contingencies you want/should have to protect YOUR interests. Once completed, you now have your own contract for future use which can easily be edited accordingly. Just a suggestion.

Posted: 05/30/2008 at 08:14AM

Any titile company that wants your business will give you a packet of info that will likely include a sales contract. Just let them know that you're an investor and looking for a good title company to work with to handle all your business. They'll bend over backwards for you.

Posted: 05/31/2008 at 01:18AM

Back in The Day, and after attending numerous guru courses and purchasing several good REI books, I studied through it all making copious notes, tagging all the interesting points, and then took it all in to my attorney. We spent about 6 hours discussing pros and cons of each element, and in the end I specified which clauses I wanted to use. He then drafted a series of contracts for different scenarios utilizing, and massaging, the selected components. I reviewed and used these contracts for many, many years. I had a contract for buying on land contract; selling using a deed of trust; a rental agreement and house rules; purchase offer; lease-option; and a couple other miscellaneous contracts. Working with the attorney to draft these docs gave me a good opportunity to understand each element, and they served me well for a number of years with only minor modification. It was time and money very well spent!

Needless to say, each agreement was clearly labeled " STANDARD" Deed of Trust, or whatever, and was structured to benefit me as much as possible within the law. People assume " Standard" is standard, and they rarely questioned any aspect of the language in the contracts. This includes specified time frames, who is responsible for what, and many other items that can really work to your advantage.