I have an interesting scenario that I need some advice on. I am a licensed realtor in California, and I have a transaction where all parties are in the same family. My sister is the buyer and our father is the seller. My sister is going to purchase the property from my father at fair market value, so the arm's length restrictions will not apply (and lets assume they won't for the conversation).
I don't want my parents to pay commissions on the deal, and I'm trying to figure out the cheapest/most effective way to go about the sale. The options I am thinking of are:
1. Use myself as the buyers and seller's agent, take 0% commissions, and complete the transaction that way. With this system I will have a broker fee of about $1000
2. Use a For Sale by Owner approach and just use the documents you can purchase online.
I have no experience with FSBO, so my question is would it be cheaper to use the FSBO documents that can be purchased for $49.99 on some of the websites (won't name them) and have an attorney do a quick read over, or just go with the 0% commission and have the broker fee of $1,000?
Is it possible to use the Realtor Docs (CAR Forms) on a for sale by owner transaction? If not, which document package would you recommend? One website has the CA Real Estate Home Sales Package with the following:
1. Contract for the Sale and Purchase of Real Estate 2. Sellers Property Disclosure 3. Natural Hazard Disclosure 4. Lead Based Paint Disclosure 5. Smoke Detector Compliance 6. Earthquake Safety 6. Mello Roos Disclosure/supplemental property tax 7. Additional disclosures that may be required by city or county
Essentially it sounds like it covers the majority of the disclosures that the CAR forms have. Does the above package sound complete? And once this package is signed by buyer/seller, can we just take it to escrow/title company to complete the sale?
Thanks again for any insight into this. FSBO is a new territory so I'm trying to get a better feel for it.
If there is no money involved have dad grant deed to sis the property, go to your local recorders office and record ... done. If there is money involved and sis doesn't trust dad, or sis wants a title policy, go to your local escrow office and have them draw escrow instructions (no contracts) and close. This is a principal-to-principal transaction, what is all this car form stuff, why do you think you have to be involved at all? I know CA likes to put their butt between private parties but I don't think it has (yet) gotten to the point you suggest.
@Richard F. walk into any escrow company and hand them a napkin outlining what you want. They will create the note.
Before you do anything, consult with your broker. You could have some license discipline issues out of this situation and it's not worth that in order to save someone a little money and keep peace in the family. Those are admirable goals but very difficult to achieve in the real world.
They can use the forms, you can help them, no need to actually "represent" anyone. Don't make it harder than it is. Ask your broker if you wish.
Curious as to how you went about this situation and how did it pan out? I could use some guidance.
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