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If the buyer and seller negotiate directly and settle on a price without the assitance of a realtor, who then oversees the transaction? I already know that the mortage and title people will do their respective parts, but in a FSBO situation, do both parties usually hire a third party such as a real estate attorney to oversee everything? If that's the case, is it customary for both parties to use one attorney, or does each hire their own?
How much different will the entire transaction be without a realtor? I've heard that after the negotiation phase and an agreement is made, most of the work is then transferred from the realtor to the mortgage and title people.
If the buyer and seller negotiate directly and settle on a price without the assitance of a realtor, who then oversees the transaction? I already know that the mortage and title people will do their respective parts, but in a FSBO situation, do both parties usually hire a third party such as a real estate attorney to oversee everything? If that's the case, is it customary for both parties to use one attorney, or does each hire their own?
How much different will the entire transaction be without a realtor? I've heard that after the negotiation phase and an agreement is made, most of the work is then transferred from the realtor to the mortgage and title people.
Is there a "standard" procedure to these FSBOs?
You're in a "title company state". I'm in an "attorney state" so your transaction will be different than those I assist with.
...and before I attempt an answer, let me say that coming to terms on price is an important but limited part of the whole picture...There are also many contingencies which benefit one party or the other.
In Vermont, the seller's attorney provides a warrantee deed and assists with providing permits requested by the purchaser's attorney, and the purchaser's attorney performs a title search and makes sure the purchaser isn't getting a property with clouds on the title.
The Realtor(s) advise the parties about who might best answer various questions and who might NOT be the person to answer certain questions: ("how might I lose my earnest money deposit?" "can I refuse to proceed if I'm not satisfied with the result of my professional property inspection?" suggest questions for the seller and buyer to ask thier attorneys, professional property inspectors, appraisers permit specialists and so on ("does my condo unit have a storm water permit?" "does it need one"? "should I have gotten a permit for that deck?" "Do my smoke and carbon monoxide detectors meet code?" "Can I ask the seller to put a GFI in the second bath?" "Is there a valid CO for my home?" "Does my town require one?" and watch to make sure the interests of thier clients are protected and that important dates don't pass without satisfying the contingencies.
The Realtor(s) assist the parties in knowing which documents need to be prepared for marketing, satisfaction of loan conditions, closing and protection against various kinds of liability...and answer many dozens, perhaps hundreds of questions per transaction.
In my state, it's unwise to go it alone as a seller (a good Realtor should be able to market the property for enough to offset the commission and then some...otherwise why would there be any Realtors left?) and even more foolish to be a buyer without the aid of a good buyer's agent Realtor (buyers are bringing the commission dollars to the table - they should be getting the professional client level representation they are paying for).
If you use attorneys, you'll each need different attorneys. Ask for references from family members and friends for attorneys, and ask the attorney's office a lot of questions on the phone before you engagage one (how much do you charge? What do you do for people in my situation?). If you get told they'll be sending you a bill for an initial consultation...you've got the wrong attorney. Look hard and you may find an attorney who does almost nothing but facilitate RE transactions ...and who charges a flat fee. This is not the case everywhere, but it is in my town. The two transactions I closed today each created stacks of paper 3&1/2 inches high (I couldn't help myself...I measured ) You don't want to pay an attorney by the hour to make a pile like that. I worked for several hours a day for 6 weeks on each pile.
When I sold my last house as a FSBO. We signed the agreement and took it to the title company. They held the escrow and did the rest from there. Actually, it was pretty simple and smooth. Honestly, I really thought it would have been more difficult.
When I sold my last house as a FSBO. We signed the agreement and took it to the title company. They held the escrow and did the rest from there. Actually, it was pretty simple and smooth. Honestly, I really thought it would have been more difficult.
Yeah you can do it without a realtor or if you have no clue with a realtor...it isn' hard at all. You need a home inspector, a title company and if you think you need a "real estate lawyer"...and maybe a mortgage broker...a realtor is more or less like a car sales man or a travel agent...
Bentlebee, I am a Realtor. Part of my job is to protect my customer from abusive contracts that are one sided. Another part is to protect to be sure all required disclosures are signed and that all parties fulfill their part of the contract. It doesn't matter if I represent the buyer or the seller. There are issues beyond discussing a price to contend with. What happens when things go wrong? And, trust me, they do! If escrow is at the title company and someone backs out, now you need an attorney to go to court to get it back, that is if you are entitled to it. Realtors do much more than list a property and hope that it sells or take a buyer to see a listed property!
Hi Dee! I agree that realtors do more than list or take buyers. Much more? Hmmmm. That's debatable. It's not been my experience that they do. And if the deal falls apart, the realtor doesn't do anything to get your earnest money back (or released to you if you're the seller). They will say, You need to get an attorney. They don't give (and rightfully so) legal advice on that, or really any other thing. In CA, they legally can't. So advising on contracts is very, very limited. If the transaction is complex, they will almost (if they're any good at their job) always advise involving an attorney.
So if you've got a buyer and a seller already matched and price agreed upon, then the value of having a realtor involved is greatly diminished.
My advice to the OP is to just google "Selling my home myself in <insertstatehere>." There is a ton of information on how to do it. You can also, for a small fee, get all the disclosures and forms off the internet and fill them out.
In my state, everything is handled by an escrow company. Find the biggest and best escrow company and ask for their most senior escrow officer to handle your transaction. Tell them up front, I'm new at this. Here is my contract, earnest money deposit, and disclosures. What do I do next? That's their job and they're hurting for business right now too and will be happy to have yours.
Good luck!!
And if you have any questions, post them here and people are VERY nice here and will be willing to help you.
MsFancyPants, all the dentist does is pull the tooth and I wouldn't do that myself either. To each their own. In our state, if all you had to do was have buyer and seller agree on price, life would be easy but we have many other mandatory things to do in the transaction.
Some people can buy or sell on their own but most can't. Many get taken advantage of by the other party. In fact someone recently showed the contract the seller wrote. The seller forced all transactional closing costs onto the buyer, which is not customary in our state unless all parties agree. The buyer ended up paying much more to close than need be and even paid the sellers doc stamps because they didn't know better. OF course, since the buyer agreed, there was no recourse. I hate it when that happens. With good buyer represenatation, that would not have happened.
Coastie as long as the buyer and seller are reasonable folks FSBO's can be very easy and smooth transactions. I also think as long as buyers and sellers use a form generated by an attorney, such as Steven Ness, those transactions are fine.
FSBO transactions become nightmares with the handwritten contract on the yellow legal pad paper.
As MsFancyPants said there are many resources out there for FSBO's and how to do things yourself. A real estate attorney doing a quick review to make sure you don't do something to harm yourself is a good idea.
Dee2e, I agree that many buyers don't represent themselves well, but it gets old for agents to make assumptions that all buyers are incapable of making good decisions for themselves. Some actually read and research, and do just fine without us. Let's not disparage that group of folks for actually being informed.
Our job is to help those that don't want to do those things for themselves or don't feel comfortable doing so. Bentlebee makes numerous negative comments about real estate agents and has for a long time...not worth your time to argue.
Silverfall, don't put words in my mouth. I never said all buyers are unable to make decisions for themselves. Thank you.
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) You don't want to pay an attorney by the hour to make a pile like that. I worked for several hours a day for 6 weeks on each pile. 
