patrick.net

BayArea says

Patnet,

I need some help understanding how to navigate an FSBO home purchase. I have no experience with this and want to make sure I’m on top of the basics.

Can you guys share some tips on how to navigate the offer, what tools to use, who to work with, etc so that I remain protected.

Thanks.

Attorney is all you really need if you're handy and can spot issues with a properties physical condition. But if you want piece of mind an inspection helps, but it generally is a waste of money as they'll just tell you an outlet is wired wrong even though it works fine. They're as bad as brokers and find tiny issues to justify their fees. Like "holy shit, the furnace filter is dirty as hell and that 'might' cause problems with the furnace in 10 years...." Most have zero idea on big issues like if there are structural issues. Some do, most don't.

The attorney will do this, but make sure you get signed disclosures on the condition of the property from the seller. That way you can sue them later if there's a major defect they were hiding. Attorney will help with the contract. They might charge a bit more if you're not using a broker as they're doing more work and they're dicks, but if they do it ain't 5-6%. Be on notice though that your attorney may be a broker and could feel entitled to get more. A good chunk of real estate attorneys are also brokers. Maybe reference your states department of professional regulation database to be safe that they're not a broker.

If not a cash purchase, pre-approval as well from your lender. If cash, have proof of funds. Helps with the offer, but on a FSBO isn't as important if there's a trust level between you and the seller without crookers involved. Just make sure you can actually close on it. Earnest money ready to go as well.

The whole industry is a fucking shit hole of scumbags. So just watch your back. Fortunately you took the broker out of the equation, so you got rid of a lot of the shit wads. I'm a non-practicing broker.... ;)

TL:DR - Call your own attorney and explain the situation. They'll have paperwork and guidance. DON'T let the seller's attorney help you at all.

Back to the inspection thing. If you have one, don't hesitate to ask for credits or a price reduction if there's big problems. If you're handy you'll see it so just reflect that in the original offer. Given there are no brokers a cover letter to the offer stating why you think it's worth X and the reasons can sometimes help. Could offend them, but at the same time neither of you are dishing out 6% of purchase price.

Good luck. Either way, you need to get an attorney, that's unavoidable. They'll guide you as well if not better than a broker could. Only pay what you are comfortable with and hopefully you get a good deal with the extra % being cut.