No Escrow???? (real estate, insurance, condos)

[maverick974]

As many of you know, I'm in Oregon with hopes of selling my home here and moving to the east valley someplace. I got an offer on my place late yesterday and I'm confused.
Our asking price is 229K. He offered 190K as-is. No inspections, no escrow, no anything. He basically wants to hand us money and we vacate. Why would someone offer something like that? Is that customary? Is it legal?
I will ask my realtor but I'd like your unbiased opinions.
Thanks.

[sunsprit]

While not customary, this type of real estate transaction is legal in many states (you could simply give the buyer a quit claim deed to the property in exchange for their good funds and vacate the property on an agreed closing date), but Oregon is an "escrow closing" state for real estate transactions, so you'll need to complete the transaction through a title company.

As the buyer has indicated an ability and willingness to buy your property without inspections or being conditional upon an inspection, that's a plus to you.

If you don't have a listing contract on the property, then you can deal directly with a title company and the buyer.

If you have a listing agreement with a realtor at this time, then you are obligated to honor that contract and fee schedule with them, even if you have brought the buyer to the table. If so, your next call should be to your agent so that they can process the transaction ... if the buyer's offer price is acceptable to you.

[Captain Bill]

I suggest going through the standard escrow process with your listing agent and the title company. Then things will be done correctly and above board.

Handling things outside of the title/escrow company is not the norm, and is not safe. What if the money the buyer gives you is not good? (Bad check, counterfeit dollars, etc)

By using an escrow company the funds delivered to pay for the property must be immediately available, (wired funds to escrow is the norm to insure the funds are immediately available) so that when you sign the title away, the title company gives you a check that you know is as good as cash.

[randian]

Originally Posted by sunsprit

Oregon is an "escrow closing" state for real estate transactions, so you'll need to complete the transaction through a title company.

Oregon is an "escrow state", as opposed to a "lawyer state". All that refers to is who customarily handles real estate transactions. No state, not even Oregon, requires a title company as a condition of recording a deed. So long as your deed satisfies the signature, witness, and notary requirements for your state, and is properly recorded (you can easily do this yourself) you don't need a title company, lawyer, or even a contract. Buyer gives cash, seller gets deed, all done.

The only purpose of the title company is handling funds and title insurance, the latter being a ripoff since (a) they're charging to insure their own work, and (b) at around a 90% profit margin it's grossly overpriced. I don't know about Arizona, but in Florida you cannot, by law, charge less than a minimum amount for title insurance. With profit margins like that it guarantees tremendous profits for title insurers at the expense of consumers, and it prevents newcomers from taking business away from incumbents by undercutting their prices.

[Captain Bill]

Regardless of what some people may consider a rip off by title insurance, the escrow company provides a valuable service. They insure the title that you provide for the buyer. And it is you that must provide clear title.

If the buyer hands you cash, and that cash is counterfeit and you don't know it, then you have lost your home. If they give you a check and the check bounces you have still lost your home.

Follow the advice of the professionals and go through a title company so that everything will be done properly. The funds that the title company provides you will be good funds.

If there is an issue with the title (and you don't know that there isn't) then the title insurance takes care of it.

Do it the right way, or take a heavy risk.

[randian]

Originally Posted by Captain Bill

If the buyer hands you cash, and that cash is counterfeit and you don't know it, then you have lost your home. If they give you a check and the check bounces you have still lost your home.

I didn't say title companies were worthless, I said title insurance is a ripoff.

Those are all functions of escrow. Title insurance is a separate function, and is separately charged for. The escrow function, in an age where trust between parties is hard to justify, is quite valuable.

[maverick974]

Ok, a little clarification. I talked to my realtor and either I misunderstood or she miscommunicated. More than likely I misunderstood. The guy will do escrow but doesn't want inspections or any improvements. He wants the place as-is. Go figure. People amaze me. Why would someone want to buy a house with no inspections?
I'm not going to argue. I countered and hopefully we can come to terms and I'll finally be able to move to your fine state.

[mjd2k]

I've bought a few houses and especially condos with no conditions. With condos, I was confident any stuctural issues would be handled by the hoa. With houses, I did a visual and was confident in my ability to spot major defects. I made offers with no conditions to entice the seller to accept my lowball offer or if it was a competitive situation. I haven't been burnt yet. If they countered, I re-countered with a some conditions.

[MrRational]

Originally Posted by mjd2k

With houses, I did a visual and was confident in my ability to spot major defects.

This. ^^
People who can pay cash for homes are rarely uniformed newbies.
--

OP: They'll also rarely do a lot of back and forth with counter offers.
Unless the $190K (vs $229) is just completely out of the question...
don't be surprised if he withdraws that first offer.

Also...
If this no-contingency deal goes through are you ready to move out quickly?
Maybe real, real quick?

[Zippyman]

Originally Posted by maverick974

Why would someone want to buy a house with no inspections?

A regular "home inspection" doesn't have much value for someone who is knowledgeable about housing in your area. Issues that buried under drywall/carpet/tile aren't covered in a "normal" inspection anyway. If a buyer can see the major components of the home (roof/foundation/heating plant), and know what they're looking at, an inspection is often a waste of time and money.

Personally, I think regular inspections give a buyer a false sense of security. Even with an inspection, a property my wife bought a few years back had an uninsulated room (that had been refinished into living space),and a "warrantied" basement that leaked (but the warranty wasn't valid because the previous owner still owed the company money).

After paying to re-remodel the living space, and paying again to get the basement dried up, the $400 "inspection" she paid for was a waste.