I'm looking at a FSBO and dont have a realtor yet. I spoke with the owners and they were very adament that they'd drop 3% off the price if we dont go through realtors.

My problem is that I'm trying to buy a house and minimize out of pocket expense. I dont have a large downpayment to put down, and will need the sellers to pay closing costs as well.

So if I have a real estate agent that the sellers would have to pay, that would likely limit the amount of negotiating power I have in trying to get them to pay closing costs as well, right?

4/13/2010 10:29:03 AM

Assuming you are comfortable with the negotiations, all you really need is a lawyer. Something seems fishy about the fact that they are so adamant about you hiring a buyer's agent considering they already offered to drop the price by the same amount they would likely pay the agent.

4/13/2010 10:40:34 AM

^where do you get the impression they are adamant about him having a buyer's agent? All I am reading is that they are telling him they will lower the price by 3% if he DOESNT use one and I don't see anything to indicate that they are encouraging him to use one...

Anyway, what is your^^^ question? If you get a buyer's agent they are basically saying you are paying for it. They have a price with a buyer's agent that includes roughly what a buyer's agent would want to get paid so you are essentially paying for it and they have a price without a buyer's agent where neither of you are paying for the services of course since you didn't use one.

You wouldnt be reducing your negotiating power since you would be the one paying for the buyer's agent's services in this kind of scenario. At the same time, if you can do your own solid research on the area, make sure the price is fair, the neighborhood isnt in "transition", etc. then you can be saving yourself some money by not using a buyer's agent in this FSBO situation.

[Edited on April 13, 2010 at 10:51 AM. Reason : ]

4/13/2010 10:44:49 AM

i bought an FSBO. i did all the negotiating - even got some of the dude's furniture.

i brought in a family friend who is a realtor just to help me out with all the administrative stuff - interacting with the lawyers & mortgage co, the inspection, checking up on the warranties, etc.
i'm an idiot with administrative stuff, it was my fist purchase, and it was someone i'd known for a long time and trusted.

in the end she got her 3% from him, and i even built a valuation and comparables tool (a fancy spreadsheet) that she could use with her future customers.

4/13/2010 10:46:37 AM

if you're a first time homebuyer, I wouldn't recommend buying a house without a realtor.

4/13/2010 10:53:35 AM

^^^ Maybe I am reading it wrong, but for them to tell him up front that they will lower the price (coincidentally by the exact price most agents charge) if he doesn't use one seems like they would prefer an agent not get involved. If they are essentially paying 3% either way, why would they proactively mention that and not just let him make the decision on his own?

I do agree that he doesn't necessarily need a buyer's agent, though, if he is comfortable doing the administrative stuff and negotiating on his own. I would say that if they are already being cheap about hiring a seller's agent and they don't want to pay for your agent if you had one, then good luck getting them to pay for closing costs too. They are either operating on a small margin or not all that motivated to sell just yet. Worst they can do is say no if you ask though.

4/13/2010 11:03:28 AM

Ah ok, maybe this edit would clear things up:

Quote :

"Something seems fishy about the fact that they are so adamant about you [not] hiring a buyer's agent considering they already offered to drop the price by the same amount they would likely pay the agent"

Without the negative, I read it as you thought they wanted him to have one which didnt make sense to me.


But of course they prefer agents not get involved, thats why they are doing FSBO in the first place. Most people that do this often don't want agents on either side so this scenario is extremely common in FSBO to my knowledge. And they aren't planning on paying 3% either way. I guess a clearer way for them to handle this would have been to offer the house at a certain price and then add ~3% if someone wanted to use a buyer's agent (ie pass the cost onto the seller). But with this limited information on hand, this seems pretty common to the little I know about FSBO sales.

If I am wrong though, someone please correct me.

[Edited on April 13, 2010 at 11:10 AM. Reason : ]

4/13/2010 11:08:27 AM

They were NOT telling me to get an agent. They said they were willing to knock 3% off if I did NOT use an agent.

They also mentioned about 3 times in our conversation that they were "very motivated" sellers. So I'm thinking I could pretty easily talk them into covering closing costs.

I guess my main question would be "Is it feasible to think I can close on the house WITHOUT an agent?" I feel like I am pretty organized and could pull this off.

4/13/2010 11:14:28 AM

The bank won't loan you more than the house is worth anyway so as long as you feel comfortable with the situation then all you need is a lawyer and a thorough inspection. Check out comps in the area, if it's in Wake county you can see recent sales in the area and average the price per square foot, land value etc. There will be comps in the appraisal but it never hurts to look for yourself.

Did they mention why they were motivated? That to me sends up red flags unless they have a good reason.

4/13/2010 11:29:23 AM

Yeah, I've done my homework on the neighborhood and the house...I feel like I can make a qualified offer.

I didnt speak with them long enough to ask their motivation in moving, but she was pregnant and about to pop...I can image they were looking for a larger house, or at least a house with the nursery on the same floor as the master bedroom. This one is not.

The house is only 5 years old, so I'd imagine that TYPICALLY nothing major is wrong with the house...obviously a home inspection should help me out here.

4/13/2010 11:32:50 AM

One more thing: Walk (or drive) through the neighborhood at different times on different days. I know it sounds like a lot but it'll save you the hassle of buying a house in a neighborhood you don't like.

4/13/2010 11:44:43 AM

Good call...I'll go for a walk this afternoon perhaps.

I've gone running through this neighborhood a few times with my GF, as her apartment is very near. It's a quaint little neighborhood.

4/13/2010 11:56:02 AM

I know a good real estate attorney if you are interested.

4/13/2010 12:32:33 PM

Quote :

"i bought an FSBO. i did all the negotiating - even got some of the dude's furniture. i brought in a family friend who is a realtor just to help me out with all the administrative stuff - interacting with the lawyers & mortgage co, the inspection, checking up on the warranties, etc."

Ditto, but make sure you read the contract to purchase in great detail. There are a lot of provisions in there that you want to make sure you understand fully before you sign it. Don't let them talk you into any provisions that seem fishy. One that comes to mind is the section that says you can terminate the purchase agreement if the inspector finds a certain amount of needed repairs (dollar amount) to the house. You definitely want to make sure you're covered if the unexpected happens or the house isn't all it's cracked up to be.

[Edited on April 13, 2010 at 12:40 PM. Reason : l]

4/13/2010 12:40:09 PM

yea you dont need a realtor at all. just be sureeeeeeeeeeeeeeeeeee to read the contract over and over again to make sure there isnt anything in it that way.

I'd honestly drop the cost of my house 3% if someone didnt use a buyers agent...the sellers have to pay the agent and go through that whole hassle of dealing with a third party..its bullshit and wayyyy easier to just work with the person that wants to buy the house assuming all your finances check out.

go for it...get a lawyer that you respect to read over the contract and do the title work for you and youre set.

4/13/2010 3:34:27 PM

Quote :

"My problem is that I'm trying to buy a house and minimize out of pocket expense.I dont have a large downpayent to put down, and will need the sellers to pay closing costs as well."

Just don't buy the house. Why don't you just do the bank a favor and save them from going to the effort of foreclosing on you in the next year?

4/13/2010 4:22:02 PM

^ I almost said something similar but not as harsh ha.

Bobby, what kind of % do you have available to put down that you are saying isnt that large? and when you say you will need them to pay closing costs, do you mean that at the small % you have to put down you literally don't have the money at all to pay closing costs?

With that being said, are you pre-approved through a lender for the amount you are willing to spend on this house?

[Edited on April 13, 2010 at 4:55 PM. Reason : ]

4/13/2010 4:27:52 PM

Quote :

"I spoke with the owners and they were very adament that they'd drop 3% off the price"

isn't this whole line of thinking based on the assumption that they won't budge on the price?

considering they're "motivated sellers," it seems like they're ready to negotiate on the price anyway. so then the question becomes do you think you're as good at negotiating on the price of a house as someone who has done it 50-500+ times before? and this is going to be your first time at the plate?

I mean sure you could *think* you're saving money by not having an agent, but the truth could be that if you had of hired an agent you would have got the house for a whole lot less than you did...and have had issues found by the inspection corrected better, or been better compensated for those issues.

I'd say you look around for an agent who will be willing to provide some sort of À la carte services such as negotiations and anything else you'd like to add in. I'm sure they're out there...

4/13/2010 4:45:51 PM

I'm going through the buying process right now, and I can't imagine trying to do all this stuff for the first time without agents on both sides. There is a mountain of legal documents, paperwork, inspections, negotiations, and so many little details and backdoors that I simply would have had no clue about if it weren't for having an experienced agent.

If I had it to do again, I *might* be willing to do it myself, simply because I know what to expect and I know what's expected of me, but with the amount of sheer time and energy it would take to do all that, it's really an unappealing option. One first-time buyer to another, roll the 3% into your loan amount and rest easy knowing that you have some experience looking out for you. It's a fairly complicated process to truly cover your ass when buying property, and it's not something you want to screw up with an investment this big.

/my $.02

4/13/2010 7:23:13 PM

We did a FSBO as a first time. It was not as bad as some people make it seem. We met the inspector and they met the appraiser. There is a contract online. They paid 5k towards closing plus gave us extra. (Some closing cost sellers are not allowed to pay) They gave us these under the table.

We picked a lawyer and they drew up the papers and the mortgage broker gave us a packet and we were done in an hour.

4/13/2010 7:50:06 PM

Well, I'd just be cutting it close if I put down my deposit AND paid closing costs. No doubt that I COULD pay it if I had to.

Yes, I've been preapproved for the amount by 3 lenders. I shopped around for a deal.

4/13/2010 8:58:47 PM

i did this

4/13/2010 9:19:05 PM

Quote :

"Well, I'd just be cutting it close if I put down my deposit AND paid closing costs. No doubt that I COULD pay it if I had to. "

and if you lost your job, would it be more than a month before you couldn't pay your mortgage. I was serious, you have no business buying a home if you don't have ~20% to put down.

Just because you are approved by some dumbass bank, it doesn't mean you can afford to own a home. Not every one of you slack jawed yokels deserves to own a home.

4/13/2010 11:29:59 PM

Quote :

"you have no business buying a home if you don't have ~20% to put down."

I definitely don't think you need to actually put down 20% (though I wouldnt go lower than 10%), but you certainly need to at least have 20%+ of the house's value in cash in the bank + closing costs available to you before I'd even consider purchasing a home (and even that is tight).

I just bought a house last month and I had cash to the tune of 40% of the house's value in checking, savings, an MMAs but I only put 10% down. Yea I know I am paying more per month, but it was worth it to me at the time to keep extra money in the bank.

However, without knowing what % the OP is planning to put down, I will agree that if closing costs are this much of an issue, the OP is probably cutting it a little too close. I certainly don't know all the details though. But trust me, I wanted a house 2 years ago but just had to force myself to wait until I had enough money in the bank to feel comfortable buying.

[Edited on April 14, 2010 at 9:10 AM. Reason : ]

4/14/2010 8:41:51 AM

we bought our house straight off the owner

no problem at all

i ain't even know shit about shit but buying a house was cake-style

anyway 40% of the home's value in the bank good lord

i ain't even have a down payment

[Edited on April 14, 2010 at 8:51 AM. Reason : grammar]

4/14/2010 8:51:43 AM

^well that was wasnt all me for sure, that was two people bringing together savings and I do still have $19k in student loans that kinda offsets that. Part of that is also the fact that my wife is a workaholic at times. She was on scholarship in college and still worked like 30 hours a week (and just saved most).

[Edited on April 14, 2010 at 9:06 AM. Reason : ]

4/14/2010 8:55:27 AM

If I had 40% i'd have over 100k in the bank. IN CASH. That would mind numbingly dumb.

4/14/2010 9:15:16 AM

Well, we didnt spend $250,000 on the house for starters and also, 90% of that that money I had in "cash" was in a MMA. Since that money was going to be used towards a house and my student loans, I didn't want it in anything risky(stocks) or anything that wasnt easily accessible (CDs). Obviously after the house was purchased and I put some extra towards student loans, we are actually investing some now (beyond our Roths and 401ks I mean). Anyway, back on topic for the OP heh.

[Edited on April 14, 2010 at 9:24 AM. Reason : ]

4/14/2010 9:22:41 AM

I would use a professional...especially since this is your first one and especially if you are a buyer. no since in potentially fucking up one of the biggest investments you will ever make in your life over a measly 3%. you will be surprised at the red tape and hassle that you will be responsible for. consider that 3% an insurance policy of sorts.

4/14/2010 9:26:09 AM

^ classic realtor response
"Our lobbying made the red tape so difficult, we are the only guys who can handle it..."

4/14/2010 10:31:43 AM

^stfu not one of your posts in here has been helpful to anyone. GTFO

4/14/2010 2:33:39 PM

Quote :

"you have no business buying a home if you don't have ~20% to put down."

wow, that's pretty retarded

4/14/2010 3:57:10 PM

^ Please attempt to contradict the justifications that you should have 20% in your possession when you go to buy a house, any argument you bring is weak. STFU

^^ I'm the real world motherfucker, cry if you don't like to hear it.

Buyer's realtor has no/limited fiduciary duties to their client, they are always there to screw you. However, I doubt this guy can keep paying a mortgage after he gets laid off in five months, I'm really just trying to help him.

4/14/2010 6:26:41 PM

^ obvious troll

4/14/2010 6:51:23 PM

Quote :

"we bought our house straight off the owner no problem at all i ain't even know shit about shit but buying a house was cake-style"

ditto. we even found the house on craigslist which is hell of a lot of fun to say--"we bought our house off craigslist"

we had a trusty mortgage broker and the seller picked the lawyer. all was gravy.

4/14/2010 8:13:57 PM

Quote :

"obvious troll"

he's either that or a complete dumbass...actually, he's probably both

4/14/2010 8:17:35 PM

its pretty awesome if you can navigate the BS of buying a house on your own successfully...but I would not risk it myself.

selling your house on your own is one thing...buying one is another

4/14/2010 9:38:33 PM

http://www.mydogtess.com/ - $$$$$$$

4/15/2010 8:18:55 AM