selling property without real estate agent

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semperlux
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selling property without real estate agent

Post by semperlux » Thu Jan 05, 2017 1:35 pm

I have a family member who is selling his rental apartment to an acquaintance. They have both agreed on a price, and they both do not want to use a real estate agent to avoid the commission since the price has been worked out. However neither of them have bought or sold property without an agent before.

The acquaintance asked a friend who told him they just need to find an escrow / title company, & they can take care of everything for them. However, will the escrow company draft the sales contract? From what I researched, people usually hire a real estate lawyer to do that.

Has anyone ever bought / sold property using only an escrow / title company without an agent or lawyer? The property is only $125k so both parties do not want to incur too much cost on the transaction.

Appreciate any input. Thanks.

Gropes & Ray
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Re: selling property without real estate agent

Post by Gropes & Ray » Thu Jan 05, 2017 1:41 pm

Yes, you can just use a closing company. If you can find the form realtor's contract, a reasonably intelligent high school student should be able to fill it out, and maybe a closing agent could too. The closing company handles the title insurance and the paperwork. The mortgage broker will help with the appraisal and shifting money around. Your friend will need to get an inspection. I can't think of much else, and I just bought a house without a realtor in November.

Tal-
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Re: selling property without real estate agent

Post by Tal- » Thu Jan 05, 2017 1:53 pm

Yes, you can. And in this case, it probably makes sense to do the deal without an agent.

The two parties will need to develop and sign a contract. A standard real estate contract is available via Google, but you could also draft something in Word and be just fine.

You should specify:

Price
Closing Date
Closing Costs (e.g. who pays escrow agent)
Consider an inspection and timing (done at buyer's cost)
Consider an earnest money deposit (some escrow agents will need this)

Once a contract is signed, reach out to a title company and get an agent on the phone. Then, see if the contract meets their needs.
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Rupert
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Re: selling property without real estate agent

Post by Rupert » Thu Jan 05, 2017 1:55 pm

In some areas, sales of real estate typically involve attorneys. In other areas, attorneys are rarely involved. Ask the closing agent what the practice is in your area. They likely have an attorney on staff or on call to draft legal documents necessary for the closing anyway.

brad.clarkston
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Re: selling property without real estate agent

Post by brad.clarkston » Thu Jan 05, 2017 1:58 pm

Yep it's pretty easy depending on your state.

Talk to your mortgage banker (not the front desk guy but the closer) he will know everyone in the business in your local area and will probably help find you a closing agent or two to call.

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Watty
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Re: selling property without real estate agent

Post by Watty » Thu Jan 05, 2017 2:04 pm

What is required varies by state and some states require that a lawyer be involved.

Hiring a lawyer that is familiar with your local real estate should not be that expensive since it is routine work and most of it will be done by their paralegal staff. I would suggest doing using one even if it is not required in your state. One thing to watch out for is that all the required disclosures are correct since some states have very strict laws about this that a title company might miss. If something like a lead paint disclosure is not signed then the it could come back to haunt the seller years from now. Since this is a rental there may be some building code or safety inspections, business permits, etc that need to be done when a commercial property is sold.

If the apartment is currently rented then I would also want to use a lawyer to make sure that everything is OK with the lease being transferred to the new owner.

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Bob B
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Re: selling property without real estate agent

Post by Bob B » Thu Jan 05, 2017 2:05 pm

Just pay a real estate lawyer a couple of hundred dollars and they will take care of everything. Do not get involved with a RE agent. That is what I did when I sold my mother's condo as her executor. I already had a buyer (another resident's son) and just needed somebody to do the paperwork and look out for my interest. He (the lawyer) also came to settlement with me. Total cost was in the $200-$300 range.
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freebeer
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Re: selling property without real estate agent

Post by freebeer » Thu Jan 05, 2017 2:10 pm

Tal- wrote:Yes, you can. And in this case, it probably makes sense to do the deal without an agent.

The two parties will need to develop and sign a contract. A standard real estate contract is available via Google, but you could also draft something in Word and be just fine.

You should specify:

Price
Closing Date
Closing Costs (e.g. who pays escrow agent)
Consider an inspection and timing (done at buyer's cost)
Consider an earnest money deposit (some escrow agents will need this)

Once a contract is signed, reach out to a title company and get an agent on the phone. Then, see if the contract meets their needs.
I STRONGLY recommend against non-lawyers drafting something custom. And also against using some "standard real estate contract" found online not developed for your state. What "some people I know very well" (cough, cough) have done with success multiple times is to use the local MLS form agreement and addenda (crossing out, with initials to confirm, anything inapplicable such as sections about RE agents and their commissions). These can usually be found via online searching especially if you know the codes. This is technically a copyright violation but it's done all the time and the chances of that causing a problem are probably close to zero, the MLS is just trying to protect its monopoly with scary copyright language. And escrow agents and everyone else in the process are going to be super comfortable with the local MLS form vs. custom agreements even if drafted by a lawyer (and if not drafted by a lawyer, or an out of state MLS form, may not even accept them). Personally I would - unless in a state that normally uses RE lawyers in property sales - trust the local MLS form to cover everything according to the latest applicable statutes more than if I paid a lawyer $2K to draft something special, unless I knew that the lawyer had the local MLS form in front of them (in which case why pay the $2K).

You appear to be in CA, which is not a state that typically uses RE lawyers in property sales, The MLS form codes are here: http://www.car.org/legal/standard-forms ... ard-forms/ . Assuming this is a standard residential agreement, you can google for "RPA­CA form PDF". You ideally want the latest version but the CAR like college textbook publishers revises their forms frequently in part to discourage use of out of date forms more easily found online.

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semperlux
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Re: selling property without real estate agent

Post by semperlux » Fri Jan 06, 2017 3:15 am

Thank-you all. You just saved my family member a whole lot of trouble & money. Love this forum.

Will likely go for standard MLS contract and a title / escrow company given the recommendations here.

Thank-you !

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jfn111
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Re: selling property without real estate agent

Post by jfn111 » Fri Jan 06, 2017 7:04 am

Another thought, if you know a local R/E agent they will probably do the paperwork for you for $200 bucks. It would take me a couple of hours to gather the information about proration of taxes, security deposit for renters, outstanding city ordered work orders, etc. Then I would collect electronic signatures and send the file to the closer in a format they are used to working with.
I'm not to proud to work for $100 bucks an hour. :happy YMMV

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semperlux
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Re: selling property without real estate agent

Post by semperlux » Fri Jan 06, 2017 9:21 am

That's a great though. Will have to look into that.

How do people go about looking for a dependable escrow / title company? Word of mouth? Yelp?

BW1985
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Re: selling property without real estate agent

Post by BW1985 » Fri Jan 06, 2017 12:29 pm

semperlux wrote:That's a great though. Will have to look into that.

How do people go about looking for a dependable escrow / title company? Word of mouth? Yelp?
I google'd it, there were only two in my area so I just compared prices and got my preferred one to price match the other.
Chase the good life my whole life long, look back on my life and my life gone...where did I go wrong?

BW1985
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Re: selling property without real estate agent

Post by BW1985 » Fri Jan 06, 2017 12:32 pm

jfn111 wrote:Another thought, if you know a local R/E agent they will probably do the paperwork for you for $200 bucks. It would take me a couple of hours to gather the information about proration of taxes, security deposit for renters, outstanding city ordered work orders, etc. Then I would collect electronic signatures and send the file to the closer in a format they are used to working with.
I'm not to proud to work for $100 bucks an hour. :happy YMMV
If you went this route I'd make sure you were 100% clear with the agent of what was expected from them, how they will be compensated and sign an agreement stating that. Also to carefully read everything you sign. I could foresee hiring an agent to do as described above but the somehow end up being your agent and owe'd 6% at closing. You wouldn't want that kind of misunderstanding.

When I went through my first and only real estate transaction I felt as though the agent/broker and titling company were trying to pull the wool over my eyes at multiple times.
Chase the good life my whole life long, look back on my life and my life gone...where did I go wrong?

123
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Re: selling property without real estate agent

Post by 123 » Fri Jan 06, 2017 1:13 pm

I was involved on two situations on selling property without a real estate agent. In both cases the buyer and seller knew each other so it was no problem at all. Both were in California. In one instance the escrow company wanted a formal offer and acceptance to get things started so I just ordered some standard real estate sales agreement forms (multi-page carbon sets) from the state real estate association. In the second sale the buyer had a lender so the lender had their own forms etc.

In both cases there weren't any unusual problems or issues so things went smoothly. Having a real estate agent involved would only have delayed things because it would create an extra intermediary in most communications.
The closest helping hand is at the end of your own arm.

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jfn111
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Re: selling property without real estate agent

Post by jfn111 » Fri Jan 06, 2017 1:56 pm

BW1985 wrote:
jfn111 wrote:Another thought, if you know a local R/E agent they will probably do the paperwork for you for $200 bucks. It would take me a couple of hours to gather the information about proration of taxes, security deposit for renters, outstanding city ordered work orders, etc. Then I would collect electronic signatures and send the file to the closer in a format they are used to working with.
I'm not to proud to work for $100 bucks an hour. :happy YMMV
If you went this route I'd make sure you were 100% clear with the agent of what was expected from them, how they will be compensated and sign an agreement stating that. Also to carefully read everything you sign. I could foresee hiring an agent to do as described above but the somehow end up being your agent and owe'd 6% at closing. You wouldn't want that kind of misunderstanding.

When I went through my first and only real estate transaction I felt as though the agent/broker and titling company were trying to pull the wool over my eyes at multiple times.
The agent isn't entitled to compensation without a formal agreement. I would use a Facilitator agreement with the compensation listed as X. I've charged between $0 and $500 bucks depending how much work they wanted me to do. The $500 dollar one was a wholesale agreement working with an assigned contract.

BW1985
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Re: selling property without real estate agent

Post by BW1985 » Fri Jan 06, 2017 2:48 pm

jfn111 wrote:
BW1985 wrote:
jfn111 wrote:Another thought, if you know a local R/E agent they will probably do the paperwork for you for $200 bucks. It would take me a couple of hours to gather the information about proration of taxes, security deposit for renters, outstanding city ordered work orders, etc. Then I would collect electronic signatures and send the file to the closer in a format they are used to working with.
I'm not to proud to work for $100 bucks an hour. :happy YMMV
If you went this route I'd make sure you were 100% clear with the agent of what was expected from them, how they will be compensated and sign an agreement stating that. Also to carefully read everything you sign. I could foresee hiring an agent to do as described above but the somehow end up being your agent and owe'd 6% at closing. You wouldn't want that kind of misunderstanding.

When I went through my first and only real estate transaction I felt as though the agent/broker and titling company were trying to pull the wool over my eyes at multiple times.
The agent isn't entitled to compensation without a formal agreement. I would use a Facilitator agreement with the compensation listed as X. I've charged between $0 and $500 bucks depending how much work they wanted me to do. The $500 dollar one was a wholesale agreement working with an assigned contract.
Right, that's why I said to be clear and carefully read anything you sign. One may think they have an understanding but the forms they sign could represent a different agreement, that's all. Be careful is my caution.
Chase the good life my whole life long, look back on my life and my life gone...where did I go wrong?

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jfn111
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Re: selling property without real estate agent

Post by jfn111 » Fri Jan 06, 2017 3:18 pm

BW1985 wrote:
jfn111 wrote:
BW1985 wrote:
jfn111 wrote:Another thought, if you know a local R/E agent they will probably do the paperwork for you for $200 bucks. It would take me a couple of hours to gather the information about proration of taxes, security deposit for renters, outstanding city ordered work orders, etc. Then I would collect electronic signatures and send the file to the closer in a format they are used to working with.
I'm not to proud to work for $100 bucks an hour. :happy YMMV
If you went this route I'd make sure you were 100% clear with the agent of what was expected from them, how they will be compensated and sign an agreement stating that. Also to carefully read everything you sign. I could foresee hiring an agent to do as described above but the somehow end up being your agent and owe'd 6% at closing. You wouldn't want that kind of misunderstanding.

When I went through my first and only real estate transaction I felt as though the agent/broker and titling company were trying to pull the wool over my eyes at multiple times.
The agent isn't entitled to compensation without a formal agreement. I would use a Facilitator agreement with the compensation listed as X. I've charged between $0 and $500 bucks depending how much work they wanted me to do. The $500 dollar one was a wholesale agreement working with an assigned contract.
Right, that's why I said to be clear and carefully read anything you sign. One may think they have an understanding but the forms they sign could represent a different agreement, that's all. Be careful is my caution.
:sharebeer

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Re: selling property without real estate agent

Post by Carefreeap » Fri Jan 06, 2017 3:50 pm

jfn111 wrote:Another thought, if you know a local R/E agent they will probably do the paperwork for you for $200 bucks. It would take me a couple of hours to gather the information about proration of taxes, security deposit for renters, outstanding city ordered work orders, etc. Then I would collect electronic signatures and send the file to the closer in a format they are used to working with.
I'm not to proud to work for $100 bucks an hour. :happy YMMV
+1 Although it might be closer to $500. After selling a home this summer in Oceanside, CA (N. San Diego County) I'm AMAZED at the disclosure packet required to sell property in CA. I'm not joking when I say that between disclosures, listing agreement and sales agreement that my husband and I signed about 40 pages.

My real estate attorney reviewed the CAR (California Association of Realtor) purchase agreement and thinks it's excellent. I think that was hard for him to admit. :wink:
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semperlux
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Re: selling property without real estate agent

Post by semperlux » Sat Jan 07, 2017 3:53 am

From all the comments thus far then, I'm feeling the approach should be:

Use the California Association of Realtor or MLS purchase agreement.
Hire the services of a realtor for $200-$500 flat to take care of the volume of disclosures & not miss something crucial.
Find an escrow / title company to handle the rest.


My family member lives in Orange County, California. He is selling his rental apartment in San Diego County, California. The purchaser is an acquaintance / friend who's been renting the unit being sold for many years & is happy with the place as is.

Should my family member find an agent / realtor / title / escrow company in San Diego County? I have a realtor & title company who I've personally used a few times that I trust & like in Orange County that I can recommend to him, or is it important to use someone local because of local knowledge of disclosures / different local regulations?

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jfn111
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Re: selling property without real estate agent

Post by jfn111 » Sat Jan 07, 2017 7:37 am

semperlux wrote:From all the comments thus far then, I'm feeling the approach should be:

Use the California Association of Realtor or MLS purchase agreement.
Hire the services of a realtor for $200-$500 flat to take care of the volume of disclosures & not miss something crucial.
Find an escrow / title company to handle the rest.


My family member lives in Orange County, California. He is selling his rental apartment in San Diego County, California. The purchaser is an acquaintance / friend who's been renting the unit being sold for many years & is happy with the place as is.

Should my family member find an agent / realtor / title / escrow company in San Diego County? I have a realtor & title company who I've personally used a few times that I trust & like in Orange County that I can recommend to him, or is it important to use someone local because of local knowledge of disclosures / different local regulations?
Anyone with a California license, Realtor or Attorney, should be fine. They can lookup inspection reports and outstanding work orders online. They will just need to familiarize themselves with any unique San Diego requirements for disclosure or inspection. (In MN some cities require a Truth In Housing Inspection for any buildings up to 4 units, larger than 4 units they become commercial properties.)

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