Buyer wants to pay cash (appraiser, negotiating, commission, mortgage)
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Are you even in an attorney state? Just curious. Most states do not use attorneys in real estate transactions- it all falls to the title company. Attorney states- Georgia, North Carolina, Massachusetts, South Carolina, Delaware, Alabama, New York, can't remember what other ones I'm missing....
Regardless of whether or not you are in an attorney state, I agree with Brandon Hoffman. You need a real estate agent. It seems you are a bit out of your realm.
To me, a cash sale would be king. No worry about financing falling through. No worry about appraisal meeting the sale price. No waiting for the buyer to sell their house first.
You do not need a real estate agent to buy or sell a house but if you don't use one hire an attorney with real estate transactions as their area of expertise.
In the Bay Area, and even in Portland, cash sales are not uncommon.
I like the idea of cash but want all the legal documents prepared by a real estate lawyer who handles closings to protect us against any future issues of all kinds including personal injury due to some structural failure. I won't be able to force them to buy home owner's insurance. I want to be protected. Similar to the standard bill of sale when you sell a car. Release of liability.
wow, you really need to get better informed. Homeowner's insurance purchased by a buyer has no relation whatsoever to whether that buyer could sue you after the purchase for a structural failure.
Not to mention that you are also completely wrong about cash buyers. Most people prefer them because home financing can always fall through - the house may not appraise, the buyer could lose their job or do something asinine like go out and buy a new car the week before closing on the house and no longer qualify. Cash transactions can be done quickly - when I sold my place, it was a cash buyer and we had the closing 13 or 14 days after we were under contract. No appraisal, they waived an inspection, no muss, no fuss. That's a huge benefit to most people regardless of whether you end up with money in your bank account either way.
The closing process doesn't change based on the method of payment - if you live in a title company state, they will handle it even with a cash buyer, and if you live in an attorney state (or just want an attorney anyway), you are completely free to get one.
These investors who offer cash. Do they realize that a cashed check recevied from a bank on a mortgage is the same as cash? Offering cash does not impress me at all.
It makes an offer stronger (less need to worry about it appraising, inspections) and there is no concern about issues with the mortgage. It also means the house can close faster.
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Originally Posted by howard555
Someone in the neighborhood where a home is located is interested to buy the tenant occupied dwelling. Since they live nearby they want it for their parents. They said they could pay cash and would like to tour the home and they were in no hurry, even a few months from now. He and his wife both have good jobs. He has been to over 12 different countries and likes the south and that implies they may have lived in the north USA.
It's also near their church. I think they are legal US citizens.
What does that have to do with anything?
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Originally Posted by howard555
They should be able to get a mortgage with their incomes and with the cash to pay 20% down.
So can most people making a cash offer. It doesn't mean they want to. Think about it; If I went to my banker and said, "I want a mortgage of $200K." He sees that I have $550K in an account with his bank, and probably income to provide that money continually. Of course he's going to give me a mortgage.
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Originally Posted by howard555
He started the conversation and I said well the asking price is not known but it may be at a level that might accommodate a discount of up to 10% for some repair or another and the real estate agent fee is 6%. He said he could pay cash to avoid the agent's 6%.
He doesn't need cash to avoid involving an Realtor...you just need a closing attorney.
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Originally Posted by howard555
Can an agent be avoided on a cash sale?
Or a non-cash sale. You don't need a Realtor to get underwritten for a mortgage.
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Originally Posted by howard555
I would insist on a legal documents and the rest, closing, etc. with a real estate lawyer in town. I want all the legal necessities to cover any future failure of some device like the heating unit, or any damage due to the failure of some part of the home.
Realtor, Attorney, or a contract written on a napkin, you are rarely ever liable for anything that happens after closing, unless you failed to disclose something you know about the property (ie, you know that the roof is leaking and don't tell him.)
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Originally Posted by howard555
The real estate agent shows the home, gets it listed, takes photos, may have an inspector to do the inspection. I know a home inspector.
What are the reasons to omit the need for an agent?
And go with normal home sale legal documents and a lawyer.
You save 6%.
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Originally Posted by howard555
An appraisal might be in the buyers favor so I might like to avoid an appraisal.
Good luck. Even cash buyers want an appraisal. In fact, cash buyers without an agent are definitely going to want an appraisal. Think about it, they didn't get to the point where they have cash money to buy a house by not doing their homework on what they should pay, especially for extremely large purchases like houses.
If you wouldn't consent to an appraisal, every buyer in their right mind would run away unless you're selling it for pennies on the dollar.
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Originally Posted by 2bindenver
How are you going to determine the fair market value?
An Appraisal. Or a zestimate
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Originally Posted by howard555
Then again he has cash and should be able to get a mortgage but there may be some reason they can not. Poor credit maybe but I do not discriminate against people with poor credit and "cash" to buy something.
You miss the point, he may not WANT to have a mortgage.
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Originally Posted by howard555
What are all of the things to consider in this scenario and of course real estate agents are going to promote the need for an agent. Maybe we could use a seller's agent or buyer's agent but not both to save 3%?
You could, but then one of you doesn't have representation, and you as the seller are going to pay for it, and if you have one your buyer will likely want one (which you customarily pay for.) Or you could use a flat fee agent.
But in this situation, where you really only need someone to draw up the paperwork, I don't see the need. Neighbors buying property from neighbors in a non-marketed sale, most often don't use agents. My dad sold some land to the guy that owned the neighboring parcel; he approached my dad with an offer, my dad went to the attorney that had handled the closing when he bought it years ago, and he handled it. I know of a handful of transactions that happen this way, in states around the country.
I'm all for Realtors and the work they do. They don't have an easy job and take a lot of crapola from a lot of people, then get lambasted from people that begrudge their right to make a living simply because they pay for the service and look only at the big figure on the closing contract. But here it isn't totally needed.
To me, a cash sale would be king. No worry about financing falling through. No worry about appraisal meeting the sale price. No waiting for the buyer to sell their house first.
All good points and we agreed before we asked the question.
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Originally Posted by Nell Plotts
You do not need a real estate agent to buy or sell a house but if you don't use one hire an attorney with real estate transactions as their area of expertise.
We know such a lawyer that we have worked with 4 times.
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Originally Posted by gx89
You don't need a realtor you need a real estate attorney. I live 12 miles from NYC and I paid my lawyer like $1300 for my closing.
We have one in mind
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Originally Posted by 2bindenver
How are you going to determine the fair market value?
It's asking a price and the buyer agrees - negotiation.
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I know of a situation where a house was sold with a defect. The inspector missed it. This defect later helped start a fire. I want no liability for any injury to person or property on or after the closing date.
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