Paperwork process for FSBO transaction?

Question

I searched, and there are a number of topic about FSBO. However, most only discuss about the marketing aspect of the process. Can anyone has gone through this explain to us the paperwork process? Let' say that we have found a property we like, and the owner agree to sell. Do we just pick an title company, and have them handle the transaction?

Marc Winter · Answer

@Albert Ng

Let's back this up a bit.  Before you, as the buyer, pick a title company or attorney, you need a valid agreement for sale.  Your earnest money deposit should be held by your title company in escrow until closing or termination of the contract.

The buyer has the option/right to select the title company unless it is an attorney state, in which case the buyer's attny would select who will do the title work.

That being said, until you know the ropes a bit more, the earlier suggestion about speaking with a competent real estate attorney is valuable advice as per @Nicole Holcomb.

Nicole Holcomb · Answer

@ Albert Ng

Lawyers Title is the title and escrow company I used in the FSBO transaction. I see how that could be confusing if you are not familiar with the company name Lawyers Title.

Nicole Holcomb · Answer

@ Albert Ng

I am currently a licensed agent but before I was licensed I participated in a FSBO in So-Cal where I was the buyer. I got the California Association of Realtors Residential Purchase Agreement and filled it out with the agreed upon purchase price and terms. I let the seller choose an escrow/title company and I delivered the signed contract to the escrow company (we used Lawyers Title). The escrow officer was great and walked us through the transaction and let us know what we needed to do each step of the way. Reach out to a couple escrow/ title companies and let them know what you want to do and ask the best way to proceed.

Best of luck to you!

Jon Thompson · Answer

I would use a reputable real estate attorney. That's what I've done on the selling end when doing fsbo. Lots of legal concerns here in NY, and for the flat $450 or whatever it's worth the peace of mind.

Jonathan Minerick · Answer

@Albert Ng Do a google search for a "Transaction Coordinator" in your area. They will usually run ~$450-$600. They have access to the correct forms. Assuming the parties agree to the terms, the Transaction Coordinator can draw up the paperwork and get everything going in the right direction. Note that they will not provide advice, though they can often explain options.

Steve Morris · Answer

"The buyer has the option/right to select the title company unless it is an attorney state, in which case the buyer's attny would select who will do the title work."

In OR, the seller pays for standard title insurance to:

1) Protect him from recourse and

2) Enure buyer has some warranty on title that he gets.

So I'll take the flip side, since seller pays, he gets to choose first.

Unless he picks a really bad escrow person, I don't have a problem.  In OR, the state insurance comm sets title insurance rates, so price shouldn't be a diff.

Steve Morris · Answer

"Let' say that we have found a property we like, and the owner agree to sell. Do we just pick an title company, and have them handle the transaction?"

Please, please, please, get an atty to handle the transaction or at least draft paperwork.  You have too much at stake - At least for the first time.  You may have issues other than price and title arise.

In OR, all a title company will do is handle money and address title issues for a fee.  They are dis-interested (not on your or the seller's side).

Dylan Vargas · Answer

@Albert Ng Welcome! California has so many items that need to be covered statewide and locally. I would use a Realtor. Most FSBO will offer to pay the commission for a "Buyers Agent" even if the commission is reduced. California is very litigious with regard to real estate. If the FSBO seller will not give a commission you should look at a Real Estate Attorney. Either way I would use a Realtor or Attorney if you dont have the knowledge. Just be prepared for the risk if you DONT use a Realtor. It never hurts to ask the FSBO about a buyers agent commission. All they can do is say no. Good luck and keep us posted.

Albert Ng · Answer

@Nicole Holcomb

Thank you for the detail response. You mention “Lawyer Title”, is that the title company’s name?

Paperwork process for FSBO transaction?

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