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How to handle offer on house, months before expected
Old 11-15-2008, 10:20 PM   #1
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How to handle offer on house, months before expected

My parents moved to a retirement facility near my brother and I in September. The original plan was for my brother and I to continue cleaning out and fixing up the house over the winter and put the house on the market in the spring. We were going to contract with an agent to handle the sale (we are all now 250 miles from the house).

However, during our visit back to the house last weekend, we were contacted by a friend of a neighbor to look at the house. After the tour, they indicated they might want to purchase it "as-is".

Our questions are: What do we do now? Who do we "hire" to represent our interests and when? Do we wait for them to make an offer (no money has been discussed)? If this doesn't pan out, then we'll go back to the original plan.
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Old 11-15-2008, 10:47 PM   #2
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You can save a lot of money by doing this without a RE agent. You can hire people for a slight fee to handle the title search and other required hoops to jump through. But if you aren't comfortable with that, you should be able to find one who could represent both parties, and save at least half the fees. It should be much easier with them wanting to buy as is. You'd have to work with them to make this happen, of course. And it would obviously depend on the offer. But a slightly lower offer without agent fees can be a win-win for both parties.
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Old 11-16-2008, 12:11 AM   #3
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It won't be completely accurate for pricing, but you could look at Zillow and Trulia for comparable houses in the area--I think on Trulia you can find what houses sold for (may also be true on Zillow) and the program even lists comparables for sale and already sold.
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Old 11-16-2008, 12:18 AM   #4
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I would interview a couple of realtors and have them do a "Comparative Market Analysis." This way you have a good sense of where the fair price should be. It's much more accurate than any online program. If you like any one of the realtors, you can use him or her, as Harley suggested, to facilitate the transaction. This will probably save you around 3% of the sales price in commission. The agent still gets paid, so you are not taking advantage of him or her. If the deal falls through, you can use the same agent to list your house.
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Old 11-16-2008, 05:27 AM   #5
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I would suggest getting hiring a RE Attorney to handle everything. Contract is the main item and the RE Attorney should be very well qualified to do one. Just be sure he/she can handle the closing (most definitely can and do). The RE Attorney will respond to the lenders requests, as appropriate (WDO - Bug Inspections, etc.,). Since it would be "as is" sale it should be relatively simple transaction. Go to the County Tax authority (on-line) and look at similar homes in that area, discount for what you would have spent to renovate, and you should be able to arrive at a fair price - price will be the most important thing to agree to. IMO you do not need a RE Agent (and I used to be a RE Broker). However, if you do use a RE Agent besure to jack your price up to compensate for the Agent's Commission (but do not be surprised if this factor does not become the "deal breaker" in a competitive market) and remember you will still need some type of legal representation to protect your and your parents interests.
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Old 11-16-2008, 10:33 AM   #6
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What a great opportunity. Probably the hardest part of a FSBO is getting a buyer.

"10 easy steps to FSBO your house"

You could skip straight to the step where you obtain a local form, forward it to the buyer, and have them fill it out. Chances are they'll get a realtor and you can deal with them (at the buyer's expense). Or, if your buyer knows what they're doing, the two of you can just proceed straight to the title company with a signed contract.

Some real estate associations have the forms on their website. Other times you find it linked to a realtor's website/blog.

If you're uncomfortable doing it on your own, and not so sensitive to price, then you could contact a local realtor and offer a 3% fee. Emphasize the "as is" aspect and that you just want to get the disclosure & closing handled by them as quickly as possible. I doubt that there are very many busy realtors this time of year...
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Old 11-16-2008, 03:26 PM   #7
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My sister was in a similar situation with her FSBO. She hired a friend/real estate agent on a flat fee basis to hand the legal and paperwork issues as well get input on pricing.

In this environment finding a buyer is big deal so I think any deal with a broker should be contingent on a very low commission if this buyer ends up making the purchase.
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Old 11-16-2008, 04:22 PM   #8
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I agree with OAG. Get a real estate lawyer to handle the whole thing at your end. It will cost less than a realtor, and as to finding the right price, just get the house appraised. If it's truly and "as-is" sale you don't even need to get it inspected and your lawyer can strengthen that part to protect you.

Most of a realtor's value is to educate buyers and sellers, analyze the sale price, qualify and screen the buyers, market, and handle the paperwork. You don't need all that, so why pay a big commission for it?
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Old 11-16-2008, 06:52 PM   #9
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I agree with OAG. Get a real estate lawyer to handle the whole thing at your end. It will cost less than a realtor, and as to finding the right price, just get the house appraised. If it's truly and "as-is" sale you don't even need to get it inspected and your lawyer can strengthen that part to protect you.
Most of a realtor's value is to educate buyers and sellers, analyze the sale price, qualify and screen the buyers, market, and handle the paperwork. You don't need all that, so why pay a big commission for it?
I'm sensing that some parts of the country have (or commonly use) real estate lawyers and some don't.

You're thinking that the last thing you'd want involved in a real-estate transaction is a realtor, while I'm thinking that the last thing I'd want involved in a legal transaction is a lawyer...
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Old 11-16-2008, 07:36 PM   #10
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I'm sensing that some parts of the country have (or commonly use) real estate lawyers and some don't.

You're thinking that the last thing you'd want involved in a real-estate transaction is a realtor, while I'm thinking that the last thing I'd want involved in a legal transaction is a lawyer...
Full disclosure: DW is a realtor.

In some states, only lawyers can execute real estate contracts while in others so can Realtors - I may not have the exact terms down, but it's something like that. I think you're right that there's a fair amount of variation from state to state as to customary practice.

But if the house is all but sold, the price agreed upon and all the OP has to do is close the deal, sounds like a lawyer would be cheaper than a 6% commission. Nice problem to have in this market.
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Old 11-16-2008, 07:46 PM   #11
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Our family lawyer charges $800 to $1200 for a closing including reviewing contracts before signing etc. Even if you have to pay only 3% to a realtor to handle the sale, if the house sells for $100,000, that's $3,000. Agents probably are used to people using them to get price points and then not signing up with them, but if I weren't going to need their services to sell the house I don't think I would get them involved.
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Old 11-16-2008, 07:49 PM   #12
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First of all don't get to excited. If no money has been mentioned talk is cheap. We sold our old house 2 years ago. If I had a dollar for every one that said this is the place for me. I'd have 15 bucks at least. Call them and say here is the price, I thought you would like to know. And let them call you back.
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Old 11-16-2008, 08:12 PM   #13
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First of all don't get to excited. If no money has been mentioned talk is cheap. We sold our old house 2 years ago. If I had a dollar for every one that said this is the place for me. I'd have 15 bucks at least. Call them and say here is the price, I thought you would like to know. And let them call you back.
Hmmm, there may be a clue in this as to why you didn't get follow through from potential buyers.

IMO, if someone is going to give you money, you should be nice to them.
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Old 11-16-2008, 10:11 PM   #14
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Originally Posted by Rich_in_Tampa View Post
Full disclosure: DW is a realtor.

In some states, only lawyers can execute real estate contracts while in others so can Realtors - I may not have the exact terms down, but it's something like that. I think you're right that there's a fair amount of variation from state to state as to customary practice.

But if the house is all but sold, the price agreed upon and all the OP has to do is close the deal, sounds like a lawyer would be cheaper than a 6% commission. Nice problem to have in this market.
I can remember using a lawyer in South Carolina many years ago, whether we needed one or not, but not in CA or Hawaii. Considering the median single-family home price here is $600K I'd be happy to pay $2-3Kto a lawyer instead of 3% courtesy to a realtor.

Of course that's why we prefer FSBOs.

Phone calls and handshakes are all very nice & neighborly, but what really moves the process along is giving the buyer the forms they need to fill out for you to sign so that the two of you can get to the title company. Most buyers don't have the form (or never thought to look for it) so they usually appreciate the assistance-- or by the time they get to page two they realize that they need to seek professional help.
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Old 11-17-2008, 06:07 AM   #15
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I can remember using a lawyer in South Carolina many years ago, whether we needed one or not, but not in CA or Hawaii. Considering the median single-family home price here is $600K I'd be happy to pay $2-3Kto a lawyer instead of 3% courtesy to a realtor.

Of course that's why we prefer FSBOs.

Phone calls and handshakes are all very nice & neighborly, but what really moves the process along is giving the buyer the forms they need to fill out for you to sign so that the two of you can get to the title company. Most buyers don't have the form (or never thought to look for it) so they usually appreciate the assistance-- or by the time they get to page two they realize that they need to seek professional help.
Just curious, when you sell a FSBO, in Hawaii, who does the closing, a Realtor or an Attorney? In VA, where I was a Broker, there was nothing to preclude me from doing a closing, but (mainly due to potential liability; even tho I carried high O&E) we used Attorneys.
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Old 11-17-2008, 07:56 AM   #16
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Just curious, when you sell a FSBO, in Hawaii, who does the closing, a Realtor or an Attorney? In VA, where I was a Broker, there was nothing to preclude me from doing a closing, but (mainly due to potential liability; even tho I carried high O&E) we used Attorneys.
Well, we prefer FSBOs because we don't have to use either one!

Fill out an offer, both sides sign, and open escrow at the title company.

IMO opinion realtors (and lawyers) are the equivalent of financial advisors for ERs. They serve a need whose services can be overpriced and rampant with abuse.
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Old 11-17-2008, 08:15 AM   #17
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I sure agree with that and will not quibble about the title company have an attorney on staff or supervised by.
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Old 11-17-2008, 08:17 AM   #18
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Well, we prefer FSBOs because we don't have to use either one!

Fill out an offer, both sides sign, and open escrow at the title company.

IMO opinion realtors are the equivalent of financial advisors for ERs. They serve a need whose services can be overpriced and rampant with abuse.
I agree with all of that and will not quibble about the Title Company having an Attorney on staff or being supervised by one.
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Old 11-17-2008, 10:08 AM   #19
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Three FSBO Experiences:

1. FSBO'd property in AZ a couple of years ago. Paid $250 for an appraisal. Set the market value after talking with the neighbors, looking at similar properties online, etc. The title company provided all the forms, and handled the closing. Our friendly banker provided the notary services on the docs at N/C. Total Cost for the closing was only about $300. It seemed like FedEX got the lions hare of that.

2. Recently sold my mother's house in MO when she passed away. We had it appraised; cost was $400. and advertised it FSBO. We had several local lookers, then were approached by an out of state buyer who was more comfortable working with a RE agent. We told their agent we would pay him 2% finders fee if he would facilitate the sale- but we were not going to list it with him. We openly factored the $5700 fee into the negotiations. Since the buyer wanted to use the agent, they ended up paying for his services. Most of the docs were sent via email; we only had to FedEX the final contract.

3. Sold property in WY last week, FSBO by word of mouth. I had a market assesment done in May by a RE agent; was thinking about putting it on the market. It took me a couple of months to decide to sell, by the time I got ready to list it, he advised me to wait; since "property wasn't really moving right now". Subsequently, a friend of a friend called me about it; we struck a deal over the phone. I traveled to WY, spent a couple of hours talking with an attorney, and a CPA to discuss the particulars. (I am carrying a contract on it- a new experience for me) ) Cost for this advice was $300. Then went and met with the buyer at his attorney's office to get the legal paperwork drawn up. We agreed to split the doc fees and closing costs. (probably will be $250-$300 each) Again, FedEx will be the big winner on fees.

If you have the time, your local regulations allow it, and have a potential buyer on the hook, you may want to do this as a FSBO. If you just want to get it sold, and don't have a pool of people looking for this type of property then you might be better to go with a RE agent- but look at the discount brokers that have access to the online MLS.

Good luck with this, and keep us posted. Inquiring minds want to know.
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