Real Estate Question

Must be different in your neck of the woods. In my area FSBOs don't expect to pay any realtor fees thats why they are FSBOs. I am a re investor so I have an idea what my market allows.

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Boldly going nowhere.

I understand your area may be different. Here, FSBO's know they are competing with listings that are advertised on literally hundreds of sites (I am a member of both the OLS and NWMLS and pay fees for this). My listings go on both, are also on the largest internet search site on the Olympic Peninsula. I also put them on Zillow myself, and they are auto-uploaded to hundreds of real estate sites. No FSBO can compete with this. Since they can't, it is much harder for them to sell their properties. Further, they don't get as much here since Buyers are very savvy and expect to pay much less when they buy FSBO's. If I am spending many hours with my Clients doing the research and showing them properties, then doing wayyyyy more research once I write up offers? I provide a valuable service and I am not a salesperson (like most Agents). Of course, you can just click on my blog and see I am very different. Also, I work with the sharpest Broker I have ever met in this business (retired Real Estate Attorney of 20 years). My Clients really do get superior service from us as they deserve it!

On fees, I charge 50% of the commission, which is what a Buyer's Agent usually is paid by a Seller, not the entire commission (I don't believe that is fair to the FSBO).

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Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

All Title Companies do is provide Title Reports and can answer questions regarding the property itself. They cannot give legal advice, cannot provide conttacts, and it is illegal for them to review and advise on contracts. Unless they also offer Escrow services, they don't do that either.

Real Estate Attorneys should always be used if a Buyer is not using an Agent. The Attorney "can do it all," except for provide the Title Report and handle Escrow.

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Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

Christieacres, surely you are not suggesting that a realtor can give legal advice? I have a great realtor that I depend on but don't use him for FSBOs and certainly don't get legal or contract advice from him.
You seem to suggest that one should always use either a real estate attorney OR a realtor. They are two different things in my book and not an either or thing.

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Boldly going nowhere.

In my state a realtor cannot give legal advise.... but we are required to have realestate law education. This allows us to handle transactions in a manner that avoids legal pitfalls. Its one part of our services that few are aware of. The closest thing to practicing law that we are allowed is the writing of a sales contract utilizing a preapproved "fill in the blanks" sales contract. When I first started our office was in dire need of an updated basic contract... the job fell to me to create a two page sales contract, submit it to the state for approval and get things on track. I spent a couple days on drawing it up, submitted it and it came back approved. We used that contract for all of our sales for the duration of my time with the company (11 years) with out a single complaint from buyers or sellers.

ETA: Also note that in my eleven years as top salesman in the office I never once had any attorney prepare a deed correctly the first time through... I always "proofed" their work and had to send them back for corrections.... at least once! I had as good a luck with bankers who routinely couldnt fill out a hud statement correctly.

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"Nothing so needs reforming as other peoples habits." Mark Twain

Why were t=you being sent the HUD-1 and deed? Does Kentucky allow realtors to close loans?

We have owned four properties before buying this one.

In every case, those four properties used realtors. Every time the closing costs and escrow fees were things that we examined closely. The listing agent gets points, the buyers agent gets points, the bank gets fees and some 'mystery person' comes up with 3 pages of other fees that can not be negotiated. I have paid as high as $8,000 aside of the purchasing price, simply to cover all of these other fees.

One of them required a $200k life insurance policy against me, with the bank being beneficiary [this was a $75k property]. The explanation was to pay-off the debt if I died. So I asked for a contract stating that they would pay off the debt if I died. The bank refused to obligate themselves in such a manner. Unless I agreed to pay for two separate $200k life insurance policies, then on one of the policies the bank would agree to obligate themselves to pay off the $75k mortgage.

For our fifth [and final home] we bought a FSBO property. We paid cash and I hired a property-transaction lawyer to handle the process. He did the title-search and title insurance, he wrote a new deed and recorded the new deed. He charges a flat fee of $200 for this service.

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http://www.mofga.org/

http://www.mofga.org/Programs/FarmAp...2/Default.aspx

You all should re-read my posts. I implied nothing. REA's use legal forms and are required to understand them, negotiate, and represent their Clients. That is the simple description. However, they are never allowed to give out legal advice under any situation. Also, they aren't Escrow Agents or Title Officers.

Now, Attorneys give out legal advice, can write and evaluate contacts, but aren't licensed to "show" homes, and can't close transactions (unless allowed to in their states and meet licensing requirements to do so). They aren't Escrow Agents or Title Officers. I was just trying to clear up and clarify there are different jobs done by different professions. There is no one licensed individual who can do it all, as it requires separate licensing and there is conflict of interest in doing more than one job (little is allowed in most states). However, I was a Loan Officer for over 90% of my real estate Clients for 7 years. WA State allowed this. The post before mine did mention an Attorney handling more, but was obviously licensed to do so.

Do any of you see Real Estate Agents in this paragraph? Please stop responding incorrectly to the literal post I did.

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Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

Go talk to the sellers and check the place out, if it's what you want, go talk to your lender and proceed.....and keep the commission in your pocket and off the price of the property

My sister in law works for the largest Title Abstract Co in Tulsa. She has done quite a bit of things for me using her friends who also work there, and she has a few friends who are REAs she sometimes gets answers from

Interesting. It is sort of the opposite here. Most closings are handled by lawyers, though lay settlement agents can if they go through the bonding, training, all that process (some title companies close loans in their offices). The title insurance of course comes from an insurance company. The lawyers can certify title though. Their malpractice effectively becomes the insurer until the statute of limitations runs (5 years) which is shorter than lenders/owners insurance covers. Some banks with do their own closings, but they usually require a lawyer to prepare any of the legal documents other than the HUD. Every state has their ins and out I guess.

The essence if what a title company does is issue a title insurance policy. A title report is required because a title policy underwriter isn't going to issue title insurance without having a competent title report first.

The title policy is all about insuring ownership, but it does not bestow ownership. Only a deed bestows ownership. The reason that a title policy is usually required is that most properties are financed, and a bank won't make a real estate loan without a title insurance policy. If you handed a bank loan officer a deed he wouldn't know what to do with it. He needs to see a title policy from a company he trusts before he believes you own the property.

I don't happen to have a title policy for my home. I bought the home at a public trust deed sale and was issued a trustee deed. I paid cash so I didn't have to spend $500 on a title report & policy. I have the protection of Nevada law, since previous owners have no legal recourse after a trustee deed is issued.

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Ask Me About Linux System Administration

You don't have to get real estate agents involved, and pay commissions. However, they do know the process, they will be able to schedule all the necessary inspections to keep you safe, and they are insured so that if they muck up the process somehow then you won't lose out.

As a minimum you need to put the sale through a lawyer or a title company, but that will only guarantee you get clear title to the land and any rights attached. It still won't necessarily get all the inspections done, and the house might fall down or the roof slide off the day after you've closed. That's where your own personal realtor gives you peace of mind (at a price, granted).

As said. The Abstract Co my SIL works at has in house lawyers, who do title searches, and any other legal needs/
IF the roof falls off, I have to carry home owners insurance anyway, so I should get a new roof. IF I havnt yet done all the doing, and as yet havnt signed the final contract, the roof aint mine, and so I would have to think that it would either fall to the owner to do whatever to be able to sell it.

Anyone, anywhere can call a licensed house inspector on their own, why do the need a REA to do that for them??

Id suppose cause most people don't/wont know where to find one

The yellow pages.

That definitely doesn't work in my area. Before the crash, they would sometimes convince the seller to add the 3% buyer's fee on top of the price and then give them credit so it would show on the HUD that way as a way to make the buyer eligible for the loan when they did not have the money to pay their agent out of pocket. Not so much since the crash.

Not everyone purchases properties for cash at public trust deed sales.

Your post had a lot of accurate information, but some specific to Nevada, not necessarily applicable to other states. Here, it is Buyer beware. If a Buyer purchases a FSBO, without getting a Title Report or Title Insurance, he could be in for a very unpleasant surprise. You can only research so much on your own. What the Title Insurance protects the Buyer from is below the next paragraph.

Yes, the Title Report is different from Title Insurance. The Title Report contains a lot of information, confirms chain of title, will also reflect liens, easements, bundle of rights, and so on. The reason why the Title Report is so important, is that it is supposed to reflect any "clouds," (i.e. issues with liens, etc...). If the property doesn't have "Clear Title," a Lender won't lend on it, and it can't be sold. No one should purchase property without a Title Report. That said, the Title Insurance guarantees the Title to be free of clouds:

Errors or omissions in deeds
Mistakes in examining records
Forgery
Undisclosed heirs

I recommend all Buyers getting a Title Report and Title Insurance, utilize an Attorney (if not using an Agent), and having Escrow close the transaction. Otherwise, if it is allowed in your state, use an Attorney certified to close transactions. This insures the purchase is Recorded, Title is clear, and there are no surprises afterward.

One of my last Clients bought a property with a mobile home on it. She is going to give the mobile home away (I referred a gal in need for this) when she builds. That all said, there was an issue that came up, discovered by the Escrow Officer (Title missed it). When she brought it to their attention, it had to be resolved prior to the Closing. The property had gone through two owners before it was discovered there was a lienholder (!!!). The Escrow Officer got this taken care of.

Over the years, I have heard about so many nightmares that could have been avoided, simply by ordering a Title Report, and paying for Title Insurance.

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Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

Here is a very informative site, beneficial for everyone who would like accurate information on Title Reports and Title Insurance (why you need them):

http://www.homeclosing101.org/whyneed.cfm

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Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com