Investor · Rochester, NY · Member since 2013 · 130 posts · 36 votes
Hello,
I was wondering if anyone can list the steps to follow when purchasing a sub 25K property cash, for sale by owner. Can i do this without an agent? My current requires a minimum of $2000 commission. The property is listed at $21k and i've communicated with the seller. I know i need an attorney. What else? I plan to have an inspection to find out what needs repairs. p.s. owner mentioned that he plans to leave the country on Jan 15th. When i said this was a red flag, he stated that his attorney would provide title after closing.
I was wondering if anyone can list the steps to follow when purchasing a sub 25K property cash, for sale by owner. Can i do this without an agent? My current requires a minimum of $2000 commission. The property is listed at $21k and i've communicated with the seller. I know i need an attorney. What else? I plan to have an inspection to find out what needs repairs. p.s. owner mentioned that he plans to leave the country on Jan 15th. When i said this was a red flag, he stated that his attorney would provide title after closing.
Thanks and HNY!
Meg
You can definitely close without an agent. If this property is in NY, you should have your own attorney and a title report completed prior to closing. DO NOT RELY ON HIS ATTORNEY FOR TITLE AFTER CLOSING.
Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
6y
I'm in the process of buying directly from a for sale by owner seller. His attorney drew up the contract, my title company reviewed it. I think your worst case scenario is you pay for the attorney, organize your title company and building inspections. Good luck.
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
6y
@Meg K., was that $2k minimum commission quoted to you to list a property or for this specific situation? They might have a $2k minimum to list a property like this, but they might only charge half that to represent you on a FSBO (for sale by owner) deal like this where you have already found the property.
I was wondering if anyone can list the steps to follow when purchasing a sub 25K property cash, for sale by owner. Can i do this without an agent? My current requires a minimum of $2000 commission. The property is listed at $21k and i've communicated with the seller. I know i need an attorney. What else? I plan to have an inspection to find out what needs repairs. p.s. owner mentioned that he plans to leave the country on Jan 15th. When i said this was a red flag, he stated that his attorney would provide title after closing.
Thanks and HNY!
Meg
You can definitely close without an agent. If this property is in NY, you should have your own attorney and a title report completed prior to closing. DO NOT RELY ON HIS ATTORNEY FOR TITLE AFTER CLOSING.
I was wondering if anyone can list the steps to follow when purchasing a sub 25K property cash, for sale by owner. Can i do this without an agent? My current requires a minimum of $2000 commission. The property is listed at $21k and i've communicated with the seller. I know i need an attorney. What else? I plan to have an inspection to find out what needs repairs. p.s. owner mentioned that he plans to leave the country on Jan 15th. When i said this was a red flag, he stated that his attorney would provide title after closing.
Thanks and HNY!
Meg
Meg,
My steps would be as follows:
1. Set the terms of the contract to writing, just as a regular purchase through a real estate agent would do. Make sure you note the fixtures, inspection dates and any other contingencies you may be listing. I would have a contingency that the property cannot close without clear and marketable title delivered 7 days prior to the anticipated closing date. I would also deal with the escrow agent at this step to make sure that we know who is handling the money at close.
2. Do your inspections and apply for title through a title company. You can expect to spend the bulk of the money you're going to spend in this transaction here.
3. Since you know the owner is leaving the country, I would demand a Power of Attorney from the Owner to be delivered to you prior to him leaving the country. I would say something like POA to be delivered by January 13, 2020 or Buyer is excused from performance with full refund of deposits. You need to know who the power of attorney is, and what they're able to do. Furthermore, no good title company will allow you to close without delivering that POA if the Owner won't be present.
4. Do your wires, close the transaction and exchange keys.
I think you can probably do this transaction for about $1800 assuming $1200 for the title and $600 for the attorney. You may end up paying closer to $2,200 if you don't have a good inspector with whom you have a strong working relationship.
As other posters have said, I wouldn't take title insurance after closing for all the apples in the orchard. Title Insurance is your proof that you're buying something real and not getting scammed. I wouldn't, and many states don't allow you to, buy or sell real estate unless proof of good and marketable title is supplied.
Investor · St Louis, MO · Member since 2017 · 250 posts · 181 votes
6y
@Meg K. if this property is a for sale by owner, you do not need an agent to assist you with this transaction. However, if this is your first rodeo, it may not be a bad idea to hire an agent to advise you properly through this process. If you are purchasing this property with cash, the steps are simple:
1. Get the property under contract
2. Send the contract to your title company or attorney with your EM
3. Do your inspection and appraisal if you choose to
4. Sign the docs and close on the property.
Your attorney should walk you through any steps in between. I hope this helps, let me know if you have anymore questions!
Investor · Rochester, NY · Member since 2013 · 130 posts · 36 votes
6y
@Kevin Sobilo Previously i was planning on purchasing a property with a bank loan...so the property word cost more than 50k. The agent stated her minimum commission is $2k. I came across the FSBO and think it will be a good deal. Haven't discussed with agent :)
I'm in the process of buying directly from a for sale by owner seller. His attorney drew up the contract, my title company reviewed it. I think your worst case scenario is you pay for the attorney, organize your title company and building inspections. Good luck.
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
6y
@Meg K., ask the agent. I'm betting they would do it for $1k and that the $2k was the minimum total commission to list a property. I could be wrong because every market is different.
I'm in the process of buying directly from a for sale by owner seller. His attorney drew up the contract, my title company reviewed it. I think your worst case scenario is you pay for the attorney, organize your title company and building inspections. Good luck.
When you say title company..what do u mean?
A title company does all the work getting the title transferred into your name, I suppose is a way to describe it. They do a lot of the legal, background stuff and are probably cheaper than a lawyer. What magic exactly they do, I'm not sure. And when you use a particular one regularly, they will start dropping their fees. Unless you're in Texas; the last one I used there claimed it was against the law for them to negotiate their fees. I feel it was BS though.
You can always call one to find out exactly how they describe their process.