do you really need a realtor (RE agent, appraisal, negotiating, agent)

[cngc]

we have a house we are interested in that is for sale by owner. they told us how much they paid, but dont know if that is true or not. the tax records indicate they paid a little more and they commented that they actually got it less than what is listed on the tax records. Ok, we have been approved for the loan. the mortgage lender states they will arrange the appraisal and the termite inspection if requested, title search. We are arranging an inspection if the contract is accepted by the seller. realestate Lawyer is being researched. What else do I need to do. I was working with a realtor who was showing us homes, but never found one by them. This house we are interested just kindof fell into our laps and really think it will be a good fit for us. Just a little nervous here since this is our first home purchase. I know the contract is pretty straight forward and if the inspection finds repair needs, we can back out of the contract. Any suggestions?

[olecapt]

Originally Posted by cngc

we have a house we are interested in that is for sale by owner. they told us how much they paid, but dont know if that is true or not. the tax records indicate they paid a little more and they commented that they actually got it less than what is listed on the tax records. Ok, we have been approved for the loan. the mortgage lender states they will arrange the appraisal and the termite inspection if requested, title search. We are arranging an inspection if the contract is accepted by the seller. realestate Lawyer is being researched. What else do I need to do. I was working with a realtor who was showing us homes, but never found one by them. This house we are interested just kindof fell into our laps and really think it will be a good fit for us. Just a little nervous here since this is our first home purchase. I know the contract is pretty straight forward and if the inspection finds repair needs, we can back out of the contract. Any suggestions?

Hey you are simply being your own RE Agent...and you have a fool for a client.

[gbone]

Originally Posted by cngc

we have a house we are interested in that is for sale by owner. they told us how much they paid, but dont know if that is true or not. the tax records indicate they paid a little more and they commented that they actually got it less than what is listed on the tax records. Ok, we have been approved for the loan. the mortgage lender states they will arrange the appraisal and the termite inspection if requested, title search. We are arranging an inspection if the contract is accepted by the seller. realestate Lawyer is being researched. What else do I need to do. I was working with a realtor who was showing us homes, but never found one by them. This house we are interested just kindof fell into our laps and really think it will be a good fit for us. Just a little nervous here since this is our first home purchase. I know the contract is pretty straight forward and if the inspection finds repair needs, we can back out of the contract. Any suggestions?

Rather than repeat hundreds of posts that have already been made on this subject I would suggest you go read them. The fact that you are on here asking anonymous people for advice on your first home purchase leads me to second OleCapt's comment. Curious as to why you would dump your realtor at this point? It's usually between this point and closing that a good realtor earns their money. Although I am a realtor, I'm not one who says that everyone needs a realtor to take them through the home buying process. There are some buyers who are very experienced and knowledgable about the process and have good negotiating skills who are comfortable handling the transaction themself. Based on your post I wouldn't put you in this category.

[Gretchen B]

Originally Posted by cngc

we have a house we are interested in that is for sale by owner. they told us how much they paid, but dont know if that is true or not. the tax records indicate they paid a little more and they commented that they actually got it less than what is listed on the tax records. Ok, we have been approved for the loan. the mortgage lender states they will arrange the appraisal and the termite inspection if requested, title search. We are arranging an inspection if the contract is accepted by the seller. realestate Lawyer is being researched. What else do I need to do. I was working with a realtor who was showing us homes, but never found one by them. This house we are interested just kindof fell into our laps and really think it will be a good fit for us. Just a little nervous here since this is our first home purchase. I know the contract is pretty straight forward and if the inspection finds repair needs, we can back out of the contract. Any suggestions?

Just be a little careful about the repair issues. It will depend on the contract and the state you live in, but in most states you can't just "back out the contract if there's repairs needed". Usually there's some stipulations and time frames that have to be strictly adhered to.

If this is the house for you and you're comfortable with the price and the escrow process, then go for it. If not, then perhaps you can hire a buyers agent to represent you and request that the seller pay his commission (which would be about 1/2 of what it would be if he was also having agent representation).

Usually the area that I see FSBO buyers and sellers make the biggest mistake is on price. Sometimes the seller significantly overprices his home, and other times the seller prices his home at a ridiculously low price. Seldom do I see FSBO homes sell at market value. Hopefully you know the area home prices inside out and know that the contract price was within that "comp" range. You're protected somewhat with the appraisal, but appraisals aren't foolproof. I've seen 2 appraisals for the same home, done within a month of each other, come in over $50,000 different in price.

My last word of caution is: READ YOUR CONTRACT THOROUGHLY. Make sure you know what is required by the Buyer, and also what is required by the Seller. Oftentimes (and even occasionally with agents involved) one party will unintentionally overlook a requirement of the contract. It's always up to the other party to make sure the first party is "toeing the line". You have to be prepared to speak up if something isn't right. Having an agent as a go-between can sometimes save a contract when the buyer and seller aren't seeing eye to eye.

It's your call. Only you can make the decision whether to "go it alone" or not. You may very well end up with a sucessful transaction and a great price on a home you love. Whatever you decide - I hope things go smoothly for you!

[macroy]

I've never been part of a FSBO - but doesn't the seller usually pay the commission? (not trying to derail the thread here...)

[Brandon Hoffman]

I pretty much agree with OleCapt here. It's easy to show homes, any fool can open a door. A good agent earns the commission from offer to close.

[palmcoasting]

Take the contract to the attorney before you all sign it. Make sure you understand the ins and outs of the contract and the process. The attorney can explain all of that to you, it's what you'll be paying him/her for.

[Captain Bill]

Originally Posted by macroy

I've never been part of a FSBO - but doesn't the seller usually pay the commission? (not trying to derail the thread here...)

When a home is listed through a realtor it is customary for the seller to pay the commission. FSBO's try to sell the home on their own in order to avoid the commission.

If the buyer goes to the FSBO through an agent, then the seller may agree to pay the commission, otherwise it is up to the buyer to pay the commission.

Bill

[Captain Bill]

Originally Posted by cngc

we have a house we are interested in that is for sale by owner. they told us how much they paid, but dont know if that is true or not. the tax records indicate they paid a little more and they commented that they actually got it less than what is listed on the tax records. Ok, we have been approved for the loan. the mortgage lender states they will arrange the appraisal and the termite inspection if requested, title search. We are arranging an inspection if the contract is accepted by the seller. realestate Lawyer is being researched. What else do I need to do. I was working with a realtor who was showing us homes, but never found one by them. This house we are interested just kindof fell into our laps and really think it will be a good fit for us. Just a little nervous here since this is our first home purchase. I know the contract is pretty straight forward and if the inspection finds repair needs, we can back out of the contract. Any suggestions?

What it sounds like happened here, is that you were looking for a home independently, while at the same time using a realtor to show you homes.

Now you've found a FSBO home that interests you, but since the FSBO probably won't pay a commission, you don't want to pay it either, so you want to dump your realtor.

Down below, I'm going to respond to your questions, but I must also be honest and speak frankly, because this sort of thing happens to realtors all the time, and it is an unfair waste of the realtors time.

When you saw this home why didn't you call your realtor and ask him/her to talk to the seller to work out a deal, instead of cutting him out after having spent time and money showing your homes?

Many people are extremely quick to state that the realtors fees are too high. But none of those same people will ever mention that so many people use realtors to get everything they can for free from them and then dump them when it comes time to buy. Sometimes it's to use Sister Jane who just got her license, and sometimes it's to go buy a FSBO house.

Apparently you've dumped your realtor, and now you've come to a realtor forum and ask for free advice from more realtors, instead of paying the realtor whose time you used to complete the job.

It's a classic example of why all realtors should have a buyer/broker agreement and/or charge a non-refundable retainer fee which is credited back to the buyer at close of escrow.

As I promised, I'll now try to answer your question. At this point you can:

• go to your realtor and work out something with her, or;
• go to an attorney and work with him/her.
• go it alone

Those are the options and the choice is yours.

Here are some things you need to consider:

• The attorney will not do a market analysis for you because it is not in his area of expertise.
• The attorney will not negotiate the contract for you except with an additional hourly fee
• The attorney may want to draw up her own contract instead of using the standard real estate forms for your state, which in many states have been designed for equal protection of the buyer and seller. This contract will be designed to only protect you. (That's why you hire an attorney.) Consequently, the seller will object to the language and you will have to pay your attorney for each modification until you reach an agreement.
• The attorney will review the Prelim for you at an additional fee
• The attorney will not work you through the critical escrow time lines
• The attorney will not work up a BINSR for you
• The attorney will not work with the home/pest inspectors and be on site when it's being done.
• The attorney will not review the inspection reports except for an additional hourly fee
• The attorney will not do the miriad other things that have to be done during the escrow period
• The attorney will not be on side with your for the final walk through inspection.
• The attorney will not be at the closing/signing with you, except with an additional fee.

You mention that the contract is straight forward, as if there is nothing to it.

I don't know what contract you're looking at, or what state you're in. The Arizona contract is a 9 page contract which can have many addendums and counter offers. While it may appear on the surfact to be straight forward, it is anything but simple.

There are so many areas in the contract that can get you into trouble if it isn't handled right. Same with the counter offer language. Realtors spend one full day in license class studying it. In Arizona, after they get their license they spend another day in what's called "Boot Camp" which again covers the contract. And that really only gets them familiar with the basic pages.

In the GRI advanced real estate classes, they spend a full two 6-hour days in class studying it. Then they are told to read it every day for one full year so they can really learn it and keep their clients out of trouble.

Good luck,

Bill

[PghREA]

You have been given good advice. I hope you follow it!

Good luck.