Advice? Buying An Owner Financed FSBO

[Mike C.]

We are looking at a SFH, a FSBO with owner financing. Seller is our friend, has already moved out, and just wants it done and gone without usual prep for sale, etc. So its "as-is" and seems priced accordingly.

We are in agreement on most of the terms:

• As is condition (built 2006, one owner).
• We set up and pay for all needed services: inspector, appraiser, closing attorney, etc.
• Price (but pending inspection and appraisal).
• 30CONV, 5.0% APR, escrow T&I as usual.
• We will, in good faith, agree that after we "own" the equity resulting from various factors (a broker friend suggested this takes 6 months for many lenders), but no more than one year from closing, we will make every reasonable effort to refi that and/or other property and so buy out the seller's interest at the refi closing.

In our limited buying experiences, realtors have handled the buying agreement and established mortgage lenders have handled the mortgage agreement. Oviously we need an attorney for this.

Here's our procedure list so far.

• An inspection to verify condition.
• An appraisal to verify value.
• A real estate attorney to make our offer contract.
• Obtain ratified contract.
• Attorney: Title search, owner's title insurance, set up T&I escrow, and other details to close.
• Set close date.
• Close.

Questions:

1) In our previous buys it seemed the realtor did one thing and the lender another--in this case the attorney will perform all the functions of both?

2) What other tasks must be done that the attorney might not handle?

3) What is a ballpark price for what the real estate attorney should cost for this here in the Hampton Roads area of VA?

4) Is this all generally the correct approach to the matter?

Any advice about any of this will be much appreciated.

[Tom Gimer]

Call some local title companies. Most will have a Virginia-barred attorney on staff who can handle this for you from A-Z... to me it sounds like a perfect flat-fee situation in the $1500 range (exclusive of closing).

Ignore the what people are saying about this being a bad deal for your friend... that is irrelevant. This is a killer deal for you if the numbers work. Who cares if friend has to hold paper for a while if that's what he's agreed to do.