As the title says.... We are buying a home without a realtor.  What do we need to do or know?
Get and attorney... don't get one?

Get an attorney to look out for your interests!

Why?  Seller pays the buyer's agents commission if it's on the market.  Unless this is a fsbo deal?  Either way, an agent isn't going take a full commission if they don't have to list, show, etc.

I know arfcom hates Realtors, but why go spend hundred (or thousands) of dollars on an attorney just to write a contract for you?

Where is this?

Columbia MO.  Is where it is at.  It is FBSO.

In the process of selling my place - signing contracts tomorrow
I have an Attorney draw them up.
Saved me ~ $70K VS a realtor

Any reputable Realtor is not going to charge you very much to do the paperwork on this.  If you don't want to be represented, just look for one that will act as a "transaction broker".  If they're going to act as your fiduciary, it's going to cost you a little more because of the liability.  They can act as the sellers fiduciary as well, if you both agree to disclosed dual agency (some agents won't do this though.)

Not to knock lawyers, but they're usually the ones that step in and fix things when they're screwed up.  Or probate, land disputes, etc.  As far as a clean easy sale, yeah they can do it, but it's not much work.....so is it worth it to take it on??  Unless they're bored or hungry, it's going to be a minimum retainer and you're paying up front......whereas an agent only gets paid if the deal goes through.  I'm not trying to talk you out of a lawyer, just saying you and the seller might be able to save some money with and agent doing all the paperwork for you (whether acting as an agent or a transaction broker.)

$70k commission???  

Most would have done it for much MUCH less.

DOn't know of any that are less than 5% , most around here are  6%+

Maybe they will negotiate lower but that is their stated rate.

Even an auctioneer who just comes in and sells the place wants 3-4%

It all depends on how much work an agent has to do.  6% may be standard because the average property is only $180,000.  When you're talking a property that is $1M+, that's another story.  There can be significant marketing costs......luncheons, full page magazine ads, professional pics, drone pics, national advertising, staging, furniture & art rental, etc.  The agent or brokerage fronts a lot of this and unless the house sells, they lose it all.  The idea is that they're going to pay for themselves by getting a much higher price for your house through that marketing.  Even then, they can be a 4-5% or a flat fee.  But, half that goes to the buyers agent.

So, maybe you got what you wanted, but maybe an agent could have gotten $100K more for it (thus would have more than paid for themselves.)  Just saying.

Around here you're LUCKY to get a few CLEAR pics on a company website.  I couldn't believe the absolutely HORRIBLE pics many companies have on their website. My 5 year old grandson takes better cell phone pics

I do know a few good ones, know a lot of poor to crooked ones. Sounds like you are one who goes the extra mile for your customers.

I've bought and sold properties with and without realtors involved.  Honestly realtors in most cases make the transaction more difficult.  Not all, but a very large percentage don't do much to earn what they get paid.  Since your buying though it shouldn't make much difference to you if you use one or not as the seller is paying all the fees to the realtor(s).

With that said I used an attorney to draw up contracts on the first couple transactions I did without a realtor.  It was around a few hundred dollars if I remember correctly.  After that I realized their wasn't a whole lot to the sales contracts, so I used what the lawyer provided the first few times and then made small changes to make it apply to the transaction I was doing at that time.

Let me make you aware of some of the issues I've had with realtors in the past.

1. So I was trying to buy this house that was bank owned (repo) and I knew it was listed on the market.  I called the realtor several times a day, several days straight and she would never return my call.  I left messages stating I wanted to make a full price offer on the property, I even went as far as to talk to other realtors in the same office letting them know I wanted it, and even called another realtor after getting no where so they could make my offer for me.  That realtor that was working with me couldn't even get anywhere with this broad.  After the run around for several weeks come to find out this lady was dodging me as she had a preferred investor that she worked with, who just happened to be her boyfriend.  He bought the property.  There was a lot of he said she said but this lady is still doing business today even though she's a slimeball.

2. I negotiated a percentage with a realtor on a piece of property that she wanted to list for me.  This property was priced very reasonably and I expected it to sell quickly.  For whatever reason I wasn't getting many showings and couldn't figure out why as I knew I had it priced pretty good.  Come to find out apparently realtors can detail out what commissions go where.  So let's say a realtor agrees to sell a property for you for 4%.  They listing agent may decide they are keeping 3 percent and that the coop fee (buyers agent) only gets 1%.  So in that instance other realtors will not show your property as they want their potential buyers to buy a house where the coop fee is 3-3.5 percent.  Long story short I was ignorant to the fact of how these commissions get manipulated by the listing agent.  Lesson learned.

3. This didn't happen to me but it did happen to my mother in law.  My mother in law was interested in listing her farm (at the time I wasn't in a position to purchase it otherwise I probably would have ended up with it, I wasn't really investing in real estate at this time).  She contacted a local realtor, one of the more well known ones around.  This realtor came and and convinced my newly widowed mother in law that 7% was the going rate on 1/2 million dollar farm.  She said things like "well we will have to get soil samples together, previous years crop yields, pictures, etc".  She went on and on about how much work she would have to do in order to list this property and how it was going to be no small task.  My mother in law agreed and the very next day she had a full price offer from a buyer.  Come to find out this realtor had a buyer before she even had the listing, she knew that she had the property sold before she even listed it.  I don't necessarily have a problem with this but I do have a problem with the fact that she lied about how much work she was going to have to put in in order to try and justify her high commission rate.  My mother in law was naive at the time and although I hate to admit it I was too, I was fairly young.  I felt bad as I should have done a better job protecting her interests but ultimately this realtor should have been more forthcoming.  My mother in law stuck by her word and sold her farm, as I told her it would be justifiable to just let the property set on the market for the next 6 months until the contract ran out but in my opinion it wouldn't be right as far as standing by the agreement she had signed with that realtor.

Sorry for the long rant I just wanted to share those few stories

Edit:  I always use a title company in every transaction, I'm assuming you knew this though

There are tons of contracts out there you could use.
I used one my dad had used to sell his house and tweaked it, no agent or attorney necessary.

I have had a potential deal go south because of an agent misrepresenting herself.

Our current house was listed with an agent, we didn't have a "buyers agent", and she freaked when I wanted to write an offer.  She didn't know what to do or how to handle it.. She alone almost cost the seller a sale.  She also told us one of her agent friends had "warned" her about us looking at houses in the area without, gasp, an agent.  She told her we couldn't be serious or afford what we were looking at. . Stupid bitch.

Two weeks ago my wife and I stopped in an open house and as we were about to pull away in the car the agent came sprinting down the street to hand us his "market research" to justify the asking price of the house. . The house easily needed $70k worth of work.

We are currently in the very beginning of a house hunt and I'd say close to 90% of the listings have had one, with about 80-85% having had multiple listing price drops.  If I had hired an agent to sell my house, I would be pissed.  Aren't they supposed to know the market and be able to price a house where it will get reasonable offers?

I have only bought two homes but in that time I have interacted with a multitude of agents.  I have only run into a select few that I would be willing to do business with.  I haven't met Delorean, he seems like a decent guy from his postings here so hopefully he is an exception to what I have encountered.

Like Abradley said, defiantly use a title company. They are the ones who will do the closing paperwork and you want to make sure the title is clean, the last thing you want is to buy a house then find out they owe uncle Bob a $100,000. I would also make it contingent on a home inspection, better to know any issues upfront.

How many purchases have you made in your life that are this big?

Why not use a lawyer to protect that investment\commitment?


Title company\search is 100% needed as well.

You've encountered some bad ones.

1 - A relationship always has to be disclosed.  Usually it's if the agent has a financial interest in the property, or a family member does.  Boyfriend is borderline, but any ethical agent would have disclosed that in the listing or sellers disclosure.....or to the seller on the buy contract.

2 - All commissions have to be disclosed.  So when you agreed to a 4% total commission paid to the listing agent, right after that it should have had how much of that was going to be paid to a buyer's agent, subagent, or transaction broker.  The standard percentage for the average house to a buyer's agent is 2.7% in Missouri (which is 45% of the total commission.)  But you're absolutely right, many agents would not show the property because they're not going to make any money off the deal after they pay franchise fees, and split with their broker.  That's why the "AssistToSell" places were very short lived.  By not paying a buyer's agent commission, they were trying to get the buyer's straight to them so they could act as a disclosed dual agent on all their listings for 3%.  Not a bad idea, but it didn't work.

3 - Once again, another jerk agent.  Even though the contract says that the listing agent gets paid a 6-7% commission to deliver a ready, willing, and qualified buyer (whether or not they have an agent), it comes down to how you're going to sleep at night.  $35000 to sell a property that all I did was throw it on the MLS--I would feel VERY guilty.  If I represent the buyer and seller in the same deal, I will often discount everything in order to help close the gap between the buyer's offer and seller's counteroffers.  Even though I'm taking on twice the liability and twice the amount of paperwork, it's usually easier for me not to have to deal with the risk of dealing with a bad agent.

Sorry you had such bad experiences.  Their are a lot of "agents" out there that are nothing more than glorified tour guides and chauffeurs, but there's also quite a few that are ethical and damn good at what we do.  I like to think I fall into the latter of that sentence--but the big diff is that I don't need to sell a house this month to pay my mortgage.  I have plenty of other sources for income that allow me to only taking on clients by referral.  In the end, if they're happy and I make enough to buy a new gun, then I'm happy.  I've worked for quite a few folks on this board......including one that I "sold" his property to his in-laws for way under what a lawyer would have charged.  I got my assed chewed for it, but I didn't take a commission split, just charged a few hundred bucks to cover the admin work for the girls in the office.  Told the boss it would pay off later when I represented them when they bought a home.

That's disclosed dual agency if the listing agent is also going to represent the buyer.  It can be a liability nightmare, but it's do'able.  If they're not comfortable, you just refer it to another agent in your office.  But that makes no sense whatsoever, because more than likely her listing contract had a buyer's agency commission worked into it.......it shouldn't have cost you a dime.  When I sold my personal house to a buyer that approached me directly, I paid another agent in our office to handle the sale.  It gets really sketchy how you represent the buyer and seller's best interest equally when you or a family member are the seller or buyer.  I'm about to list an investment/rehabbed house in Maplewood and I might have to do that again if a buyer comes to me directly.  

As far as price drops go, that's normal if a house doesn't have a contract on it in 30, 60, or 90 days.  We can only suggest what the price should be.  Lots of time the seller wants to add 10% to that for "wiggle room", which is a bad idea in my opinion.  House prices at market, will sell in the first week at listing price or above.  Why tack on $10K and compete with nicer houses, or ostracize those shopping in a bracket 10% lower.  Houses that sell within the first 30 days sell within 97% of list price; after 90 days it's 90% but can be lower.  Either way, you can't get stupid on the listing price because the house needs to appraise so the buyer can get a loan.  The situation that you described with the house needing all the work is a prime example of that.  Anytime like that we call for the appraisal first, but you're out $300-400 up front is the bad part.  But that's better than out $300-400 AFTER you spent $400-800 on inspections, survey, title work, etc.  I have a deal like this right now where I'm advising the buyer not to even make the offer, as they want DOUBLE what I think it's going to appraise for.  He still wants to find out and it's his $400.  

Back onto the pricing.....different tactics, but sometimes there's just not a buyer and it needs to sit.  I have one listing out there right now like that.  All the numbers show the price per square foot is right, it's in great condition, and has upgrades (huge kitchen, finished basement, irrigation system, etc.), but it's just not selling after 3 months.  I've had other agents, appraisers, etc look at it to make sure I'm not missing anything--all agree that I have it priced, marketed, and presented properly, there just isn't the right buyer for it yet.  I told the sellers they could drop the price by $10K and hope to pick up a new segment of buyers, but since they're in no hurry and don't need to move, they could also just wait.  They're going to wait it out, and I'll continue to watch what's going on around the neighborhood.

Gimmie a shout if you need any help.  If you're not in STL, I can help you find someone that isn't a total hack.  Either way, not going to cost you anything.

No attorney necessary.  Find contract online.  

Execute contract.  

Contact closing company and provide copy of contract.  

Schedule closing

Line up bank for mortgage.

Close and you're done.

Send MidwestJ case of ammo for saving you big bucks.

Delorean, you give remarkable knowledgeable and accurate advice, IMO. There have been several comments about using a title company as if that gives some significant protection. You might want to discuss title opinions and title insurance and the huge difference in protection to the buyer between the two. With your experience, I am sure you have also run across incompetent title companies. No different than Realtor's, Doctors, Lawyers, Dentists, Plumbers and on and on. Such is life I guess.

Yes, you absolutely want to use a title company.  So many little things can cause issues.  You want them to do a full title search to make sure all the signatures are in place because of past marriages, divorces, death, etc. in the past.  Any bank is going to require to you have this done anyway.  Get title insurance, because if they screw anything up or anyone makes a claim, then their lawyers spring into action and handle everything.  A closing protection letter is something else you want to have--that way if the title company doesn't do their job and absconds with your money, you are protected.

Surveys are something people often say "screw it" or just get a spot survey.  You can still get title insurance, but it won't have survey coverage.  So if your barn, pool, or even house is over the property line, the title insurance is not going to cover you since you didn't get a staked survey for them to record.  That usually isn't a big deal for a subdivision house where there's a recorded plat.  But let me give you an example of something that can happen.  I'll use a house I just acted as a buyer's agent on.

This 20 y/o subdivision house is depicted on a recorded plat.  There's a recorded indentures/restrictions on fences, outbuildings, etc.  About ten yrs ago the owners added a fence, pool, covered porch, extended the driveway, etc.  So the contract has a out clause that allows the buyer to bail if the survey reveals encroachments.  There's also a rider that allows them to bail within 5 days of receiving a copy of the indentures, restrictions, & covenants.  But there's ALSO a line that says that this does not apply to publicly recorded easements, rights-of-way, etc.  So, something I always add is that we have additional time to review those indentures AND any publicly recorded easements and such.  Because let's say the neighborhood or utility has an easement for something through that pool......we couldn't back out as it was publicly records.  But if it was 1 ft over the neighbor's property line, then we could.  Also on this house, I wrote in extra time to get the appraisal done first, then the inspections (building/sewer lateral/radon/pool/irrigation), THEN survey, etc.  I was most worried about the appraisal coming back, so I stacked all the contingencies in order or likelihood they would kill the deal......so the buyer did not drop $2000 all at once and lose it all over one thing.  As things passed, they moved onto the next step.

In the end, the house appraised $2k over asking, sewer lateral needed replaced (but the listing agent and I got the city to cover 80% of the cost), we had a small encroachment with a neighbors fence but not an issue, has some termite damage but listing agent got the pest co out there to warranty it, had to change some contract stuff since the house was owned by a trust, had loan commitment two weeks early, closed two weeks ago.  YES, lots of work on this one, but that's what we're for.  Sellers were both working, moving, and dealing with the pain of a very sick grandchild.  Buyers both worked, travelled, and had a two week old baby.  Show me a lawyer that's going to book inspections, call pest control and sewer lateral companies, drive to the house to get drone photos of the roof for the insurance guy, work with the lenders & title to get the best vs. cheapest loan product, surveyor, home warranty, etc.  Some of us work our asses off for clients.

The other agent in this deal was fantastic.  It was a multiple offer deal, and she said she suggested to the sellers to go with ours since I was working the buyer side--we had a few conversations prior to making the offer, and the presentation and attention to detail on the contract impressed her.  A bad agent can derail a contract just as easy as a bad buyer/seller.  It's not just about the asking price......agent, lender, loan commitment date, inspection period duration, play just a big of a role in multiple offer scenario.  We asked for a lot of leeway on the appraisal & inspection period, offered less money than others, but a bulletproof preapproval from a local lender and a good agent working for a well-known & liked broker submitting it, got the offer accepted over the others.

Thanks ALL....  I think I've got this.... NOW SOMEBODY BY MY HOUSE!

*buy*.

It seems delorean is one of the good guys.  I didn't mean to sound so condescending but after reading my posts it seems I may have sounded that way.  It wasn't my intent.  I've had some bad experiences with realtors, and have formed my own opinions, but they all weren't that bad obviously.  My personal experiences are just a very very small percentage of transactions that take place every day.  There are a lot of people who have done several real estate transactions that still never do one without a realtor involved.  Different strokes for different folks.  Once again sorry if my post was taken in the wrong light.  If your looking for a realtor I'd say delorean is your man if he's reasonably close to you.

Damn grammar police strike again!  Typing too fast!  

No worries, I didn't take it that way......anybody can definitely go it alone on an easy deal, or with an attorney on a difficult one, but a GOOD Realtor can do either.  On the buy side we're usually free, and on the sell side us good ones will get you enough extra money to pay for ourselves.  Just depends on what side of the transaction you are when there's a professional involved.  WebMD has been around for many years, but there are still doctors; LegalZoom but there are still attorneys; essurance but there are still insurance agents;  E-trade, but people still use stock brokers.  It boggles my mind why people think that buying several hundred thousand dollars of real estate is something they don't need a professional for.  There are so many things that can go wrong or be overlooked.  Kind of an insurance thing.  I'm a damn good driver, but I still have car insurance (and not just because the state makes me.)

I'm going to be putting my house on the market sometime soon.  I've decided to use a realator.  Luckily I have a lady that shoots competition that I trust to do it right.  At the moment I'm just fighing my urge to dump money into the house fixing every little thing I think needs done.  I'm probably going overboard and doing stuff that doesn't have to be done.  

I bought a piece of property earlier this year where I didn't have an agent.  The seller's agent ended up doing the dual agent route.  I personally screwed up on it by not getting a survey first.  I mistakenly thought that since it was a "platted" subdivision I didn't need one.  Turns out after the fact that the "plat," was what the county refered to as an unrecorded one.  It meant there was a plat in some developers basement or trashcan somewhere, but not at the county.  Oh, and I forgot to mention the neighbors house was three feet on my property.  Title company coverage, LOL yeah right.  $2,500 later I got it fixed, but my property line looks wonky now.