Buying a House - help us not screw this up...

[Exodor]

So the wife and I finally found a good home in the Portland area in our price range.

It's a for-sale-by-Owner, and since we never signed with a Realtor, both parties in the transaction are winging it sans "Real-Estate Professionals".

We signed the Earnest Money Agreement last night and got the financing lined up.

Has anyone purchased a home without the aid of a realtor? Are there any pitfalls we should avoid? Are we crazy?



Any help is greatly appreciated - I have no buyer's remorse (after spending 4 months looking at houses, I KNOW we're getting a great deal), but I do worry about something going haywire since we're newbies...

[LordMortis]

I think I'd still come up with realtor arbitor. There is shit ton of paperwork to be dealt with and filed with the title and loan and city and county and state peoples. A lawyer would probably be better, but would also probably be way more expensive than you want to play with.

I signed papers for four hours when I bought my first house and I couldn't begin to tell you where they came from or what I was signing anymore.

[dedewhale]

I just sold my house (in NJ) without a realtor, had no idea what i was doing but my lawyer walked me through the process. One pitfall in NJ is that I needed to get a CO (cert. of Occupancy) in order process the deal. Had to do that with my local down.

[Sunderer]

You need:

Inspection by structural engineer
Inspection by a bug man
Title Policy (varies from state to state - Title Co. will take care of this)

Buyers normally pay for first two. Seller (in my state) normally pays third.

Hope your earnest money contract deals with potential repairs.

[Sunderer]

[Obligatory disclaimer] Anything I post here is not legal advice, blah blah blah, you may not rely on it, yada yada yada, laws very from state to state, your laws may be different. I'm not a real estate lawyer (although I sold my own house).

[Odin]

As a Realtor, I strongly recommend you get a realtor.

However if you're dead-set against the idea, you should at minimum secure the services of a reputable attorney who specializes in Residential Real Estate. Don't get a generalist or a family attorney who mostly does wills and speeding tickets. Get somebody who knows the paperwork, knows what to look for, and won't screw it up. Around here, you should expect to pay around $500 for such services (vs as little as $250 for a lawyer who just does the paperwork and is useless if anything goes wrong). Your area may be different, but remember that you're saving a significant chunk of cash by not paying Realtor's commissions. Don't be afraid to put some of that cash back into the cost of securing a solid attorney.

Good luck! These things can go very smoothly or be horror stories. Here's hoping yours will be the former.

Sith

[Sunderer]

I'm trying to figure out the connection between family attorneys and speeding tickets. Heck, I don't even do wills.

[Austin]

Not much to add of any help but I also have been thinking of selling without a realtor. I actually am not in the market to sell right at this moment or anything but looking at a future sale and thinking about paying a realtor 6% really hurts. 6 freak'in percent! Anyway, when I sell I won't be in a rush and will give it a go solo for a few months. (unless for some unforeseen reason I am in a rush than... who knows)

[Odin]

I'm trying to figure out the connection between family attorneys and speeding tickets. Heck, I don't even do wills.

Sunderer, around here it's common for small attorney practices to handle all sorts of things, but (for those who aren't personal injury ambulance chasers) a lot of their routine business comes from handling wills, estates, and representing their clients in traffic court (usually by calling the prosecutor's office). No offense intended, I was just trying to draw a line between Real Estate specialists and the lawyer equivalent of "general practitioners." The practice of law may well be handled differently in other parts of the country.

Sith

[Exodor]

One piece of information I left out in the OP - I work for a title insurance company and have 8 years of industry background - so I already know the title to the house is fine and there are no wacky encumbrances/ easements/ CC&Rs.

So far things have been smooth. I'll be able to get a great reference from people at work for the inspection, and since the closing will be where I work, well, that'll be easy.



I guess I'm just concerned because it's been so painless so far - it makes me wonder why people use realtors in the first place (other than the obvious help in finding a house/ finding buyers)?

[MHS]

People use realtors for the one time in a hundred where things go wrong. Plus, a really good realtor will eliminate a LOT of the work for you... unfortunately, the ratio of really good realtors to lazy ones is not in your favor.

Good luck with the house! Exciting stuff!

[LordMortis]

Well, it sounds like you already have the inside track then. I don't imagine there are many here that could tell much more than you don't already know or can't find out by screaming over your cube (down the hall).

[Odin]

Not much to add of any help but I also have been thinking of selling without a realtor. I actually am not in the market to sell right at this moment or anything but looking at a future sale and thinking about paying a realtor 6% really hurts. 6 freak'in percent! Anyway, when I sell I won't be in a rush and will give it a go solo for a few months. (unless for some unforeseen reason I am in a rush than... who knows)

Statistically, For Sale By Owners sell for 7-10% below market value (either by pricing their home too low or too high or during negotiations with the buyers). You also put yourself in the position of having to deal with potential buyers who aren't pre-approved and may not be qualified to buy, with buyers who aren't serious and are just "window" shopping homes to get decorating ideas, etc.

Also, if your area's realtors use a Multiple-Listing Service, you won't be in it, so all the buyers working with realtors (the buyers who tend to be well-qualified and well-informed) may not see your home at all, thus reducing the number of people who might make offers on it.

Before I got into Real Estate, all of this sounded like so much rhetoric to me. Now that I'm dealing with buyers and sellers all the time, I see how true it is. When I approach For Sale By Owners with the offer to list their property, I do it with a clear conscience knowing that I truly have the best tools to get them top dollar for their property in the shortest time possible.

YMMV

Sith

[Gizah]

I'm trying to figure out the connection between lawyers that represent injured people against insurance companies and attorneys that engage in the unethical practice of "running cases" or "ambulance chasing". Are all of the personal injury attorneys in your state unethical? I highly recommend filing a complaint with your state bar immediately.

[Odin]

I'm trying to figure out the connection between lawyers that represent injured people against insurance companies and attorneys that engage in the unethical practice of "running cases" or "ambulance chasing". Are all of the personal injury attorneys in your state unethical? I highly recommend filing a complaint with your state bar immediately.

Based on the nature of their commercials, they seem pretty sleazy to me. Of all the things I have going on, the last thing I'm interested in doing is spearheading a reform movement for sleazy lawyers in my area though.

Sith

[Exodor]

Statistically, For Sale By Owners sell for 7-10% below market value (either by pricing their home too low or too high or during negotiations with the buyers). You also put yourself in the position of having to deal with potential buyers who aren't pre-approved and may not be qualified to buy, with buyers who aren't serious and are just "window" shopping homes to get decorating ideas, etc.

I can vouch for this one - the house we're buying is quite underpriced. We've been looking for quite some time, and we've yet to see a house in this good of shape (it's completely move-in ready - new water heater, furnace - doesn't even need any cosmetic fixes) for this price.

Not that I'm going to complain!

The sellers are obviously working their way through a "Sell it Yourself" packet, which actually makes more more comfortable - they're not experts out to screw us, they just didn't want to pay a realtor's commission.

Before I got into Real Estate, all of this sounded like so much rhetoric to me. Now that I'm dealing with buyers and sellers all the time, I see how true it is.

I appreciate the input Sith, and I hope you don't take offense to what I've said about realtors. If I was selling, I'm pretty sure I would use a realtor to increase the number of buyers who see the house.


But as buyers, we had a horrible experience with the first realtor we dealt with. We met him at an open house, and after he got our information he started sending us listings via email. We found a house we LOVED, but by the time we got financing pre-approved someone else had put in an offer.

Our realtor never gave us any advice - we kept asking about this property, if the seller had accepted the offer etc., and all we were told is "It's gone". That's fine - but at least answer our questions!

Then, when we got pre-approved by the lender Mr. Realtor recommended to us, we never received any paperwork saying so - it all went to Mr. Realtor. I think it was a sneaky way of trying to tie us to him - a way that we later found out was illegal, since the lender is required by law to send that letter to us.

Thank God we never signed any contract with this "realtor" - we just kept doing the open house thing, and this past Sunday we stumbled across the absolute perfect house.

8)

[Odin]

No offense taken. Realtors come in lots of different flavors, from competent and honest to lazy and sleazy. I'm of the honest and lazy sort myself.

Years ago when I bought my house, I was let down by my realtor and my lawyer, and was royally screwed by the seller and their lawyer. They ended up staying in my house for a month beyond when they were supposed to and didn't pay me a dime for it. It's hard to know who's reputable and who just wants your money.

As a buyer, you're in a much better positon to succeed without a Realtor than if you were selling, so as long as you get your inspections done and have a good lawyer handle the paperwork, you should be fine. Good luck!

Sith

[EvilHomer3k]

Go get Home Buying for Dummies.

When we bought a new house (and sold our house) the banker did all of the paperwork except the offer. It was the same way for the first house we bought as well. If you are willing to do the work yourself, a realtor isn't necessary. It is just like anything else, though. You have to put the work into it to get the most out of it. You CAN install carpeting in your new house yourself but if you don't do your research ahead of time, you could end up in trouble.

My experience with realtors has been less than satisfactory, to say the least.

For the most part, the bank will make sure you everything you need is taken care of.

*Be sure to get an inspection by a good inspector - anything they find wrong with the house you should ask to have fixed before you move in.
*have the house checked for termites
*pay attention to the walkthroughs (especially the final one) - ask to take pictures and have them signed at both walkthroughs

If this is a starter home, make sure that it will have good resale value. You want a house that is close to schools (but not right next to a school). Something in the middle of a good neighborhood (not the edge). A house that isn't overimproved for the neighborhood. Something that you can easily fix up (if it isn't already done). You can always fix up the house you can't fix up your location.

If possible, take a look at the assessed value of the home. Then, do a comparables search. The county assessor should be able to help you. Look for houses with the same approximat finished square footage, same no of bedrooms, baths, garage size, and yard size in the same neighborhood. See what they sold for and compare them to what you're getting. Where I live, you can do a comparables search at the county assessors web site.

Finally, dont get married to this house. Be prepared to walk away if you need to. There will always be another house that is comparable or better. [/b][/list][/list]

[noxiousdog]

Only thing I can add is to listen to Sith Lord about the attourney.

With a realtor it's optional. Without, it's a very bad idea to skip it.