Buying a House through Private sale

[rileyjo]

I am house hunting in an area which has very few real estate listings. There are expensive waterfront homes and also raw land for sale but in my price range, very little is available and gets snapped up quickly. Rentals are non existant during tourist season.

I have bought about 10 houses in my life. I have bought Power-of-Sales, listed houses and have bought raw land and built on it. I have been a landlord and a tenent. I was self employed for many years, so I know how to work with banks and be aggressive in a market. I have always worked with a real estate agent.

I have an opportunity to purchase a home through private sale. They are discounting it to cover what using a real estate agent would have cost them. I have a good working relationship with both my bank and my lawyer. What pitfalls should I be aware of?

[highlandview]

Have your attorney review the contract before you sign it. Have them hold your earnest money in an escrow account. Don't give them the earnest money until you all sign the contract. Apply for your loan and start the inspection process immediately.

[luvrulz]

And if you have a friend in the RE business ask them what paperwork is necessary. We have done for sale by owner and it's worked for us and saved us both on the selling and buying ends. What worked here and in Florida might not apply to Canada so find someone that knows and fill out the forms they advise. We redid them on our computer and everything was tidy and legal. Worked great!

[Maura]

You probably know what paperwork is involved: the bid, the acceptance, the deed, and the title insurance. You need to give them a bid in writing, with the bid contingent upon inspection. Once they accept your bid, you have a professional inspect the premises. You decide if, in spite of the problems the property has, you feel you still want the property, then you continue with the deal. You want to draw up, or have your attorney draw up, a deed (or whatever legal document you use in Canada). The deed should show the CORRECT legal description, how much is being paid, and how the property is owned if it is to be owned by more than one person. The seller should be paying the legal fee and you should be paying the legal fee, but don't sweat it if you end up paying both fees. You will want title insurance (might be called something else in Canada) to guarantee you have a free title. It shouldn't be expensive to have all papers signed and witnessed in an attorney's office.

You might want a surveyer to shoot a line on any property lines that you are unsure of.