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Regular Contributor
wc_netzero
Posts: 106
Registered: ‎07-24-2007
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Private transactions?

My parents may purchase a house from a friend of a friend of ours in the south bay area.  If they come to agreement, they would like a private transaction.  Any specific suggestions on how to make sure that each side is still properly represented and protected, without incurring the 2.5% commission on each side?  For example, if real estate attorneys are good ideas, do you have any you would suggest?  Or if real estate agents are willing to do this type of transaction on an hourly or limited pay basis, any suggestions on who?  Many thanks for your thoughts.

Gold Regular Contributor
sheriff
Posts: 2,343
Registered: ‎06-01-2012
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Re: Private transactions?

[ Edited ]

You can use a real estate attorney.  You don't need an agent.  You probably need an escrow and title company.  I don't know if it would be a good idea to get separate real estate attornies for each party.  How well do your parents know these people?

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SamShuehRealtor
Posts: 930
Registered: ‎10-27-2008
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Re: Private transactions?

[ Edited ]

Suggest to order an appraisal for bench mark purpose. Both sides can negotiate an agreed price. As for condition etc, it will be as is. The amount of disclosures can be prepared by a realtor. I may be available on an hourly /project basis doing contract but the price is between the two parties.

Sam Shueh

Regular Contributor
wc_netzero
Posts: 106
Registered: ‎07-24-2007

Re: Private transactions?

[ Edited ]

Thanks for the suggestions everyone.

 

Sam - would you think a single realtor would be appropriate here, or should there be two agents/attorneys so that each side has its own?  And how would I contact you if things work out - should I just send you a private message?

 

They don't know each other well.  But friend 1 is a close friend of ours, and friend 2 of friend 1 is a close friend of friend 1.  So it feels like everyone is on the up and up because of the close connections in the middle.  They are still talking.  The holidays are slowing everything down, and no one is in a particular hurry.

Gold Regular Contributor
sheriff
Posts: 2,343
Registered: ‎06-01-2012
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Re: Private transactions?

If you trust everyone involved, do an appraisal to help you set the price, get comps from redfin, then settle on a price.  Have a home inspection done to make sure everybody knows the condition of the house.  If everyone is satisfied then get an attorney or agent to help with the paperwork.

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SamShuehRealtor
Posts: 930
Registered: ‎10-27-2008
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Re: Private transactions?

[ Edited ]

I suggest you get as few over-charged professionals involved. Unless there is a lack of trust or an estate sale then it will involves lawyers. It will be costly and confusion as hell on a simple private transaction involing two parties. In this case there are already 4 parties(friend 1+2). 

 

I work at Keller Williams Cupertino Office. Every week there are sellers near by who sell their own homes the home sellers can handle the marketing, hang a sign FSBO (no agents or re-lawers pls).  The sellers know how much they want and buyer will offer or haggle. A realltor merely prepare and oversees the written contract and disclose what they both need and coordinate title & escrow. 

 

You should be able to find my contact from Redfin just hover my name click (private msg- on right side) or Google me for phone#.   Sam Shueh

 

PS:  Best is to get the dialog going esp on condition and price. You can get the approx. price from Redfin. 

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sheriff
Posts: 2,343
Registered: ‎06-01-2012
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Re: Private transactions?

I respectfully disagree.  While you might be able to get a fair price without an appraisal, going in without a home inspection is the best way to lose a friend because there may be things wrong with the house that nobody knows about, which may lead to lingering resentment or even a failure to disclose lawsuit.  Home inspections are not that expensive.

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Neptune__
Posts: 453
Registered: ‎11-01-2011
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Re: Private transactions?


sheriff wrote:

I respectfully disagree.  While you might be able to get a fair price without an appraisal, going in without a home inspection is the best way to lose a friend because there may be things wrong with the house that nobody knows about, which may lead to lingering resentment or even a failure to disclose lawsuit.  Home inspections are not that expensive.



They're buying it from a friend of a friend, so they won't be losing a friend if the deal goes bad.

 

They should do whatever they would do anyway.  If it's an old home, get an inspection.  If it's a fairly new home, I personally skip the inspection.  Hire an attorney to inspect the paperwork.  I'd skip the appraisal if you feel comfortable with the price.

 

The whole RE buying process is so goddamn inefficient.  The inefficiency supports this entire industry of title insurance companies, escrow companies, agents, appraisers etc etc.  It's lame.  Where else do people buy things with so much process overhead?  I have purchased an automobile that costs more than the average home in the US and I didn't get title insurance, open an escrow account, do an appriasal, blah blah blah.  The RE buying process is garbage

 

 

 

Regular Contributor
wc_netzero
Posts: 106
Registered: ‎07-24-2007
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Re: Private transactions?

Well, at the end the potentially seller decided to keep hold of the property for some additional time, in the belief that it will go up further.

 

It seems that, at least at the townhouse and lower end, I see a lot of people who don't want to be landlords, who would normally sell when they purchase a new property, holding onto second or third properties right now and renting them out.  The low interest rate is making that possible (cash flow positive or at least cash flow acceptable).  I am guessing that's a big reason why inventory is so low as well.  Everyone is trying not to miss the run up.  

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Jil
Posts: 3,136
Registered: ‎10-24-2011
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Re: Private transactions?


wc_netzero wrote:

Well, at the end the potentially seller decided to keep hold of the property for some additional time, in the belief that it will go up further.

 

It seems that, at least at the townhouse and lower end, I see a lot of people who don't want to be landlords, who would normally sell when they purchase a new property, holding onto second or third properties right now and renting them out.  The low interest rate is making that possible (cash flow positive or at least cash flow acceptable).  I am guessing that's a big reason why inventory is so low as well.  Everyone is trying not to miss the run up.  


You are right. This is the situation at BayArea right now. Let the shadow inventory believer's note this...This is the real shadow inventory will not come to market anymore.