Profile picture for KristaPierce

Buying a house that's not officially on the market

We spent this summer looking at houses and crunching numbers to see what we want vs. what we can afford. We have decided that it makes more sense to buy than to continue to rent. And that it would also be nice to stay in the neighborhood we currently live in.
After renting the house we are in for 2 years we talked to our landlord and he is willing to sell us his house (YIPPEE!). However, we have run into a slight problem (I think). Our landlord wants to save money by using a transaction broker rather than each of us having our own agents. We are first time home buyers and don't really know what we are doing.
Is this a good idea for us?
Will this actually save a significant amount of money?
Will we still be able to get the things that we want like closing cost paid and home warranty?

  • October 04 2013 - US
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Answers (6)

Hi Krista, by not using agents YES the seller will be saving money. When a buyer is represented by an agent, the agents commision is paid by the seller, so you are saving the seller money. 
Using an agent that looks after your interest is priceless. I do suggest getting a lawyer to avoid headaches. It may be a small loss now, but you can look at it as a long term investment into having peace of mind years down the road.
  • October 04 2013
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Profile picture for CallTheSisters
Without professional guidance you do not know what your legal rights are in regards to the real estate transaction.  You are putting your trust and your financial future in the hands of your landlord. 

The seller will save money but don't expect those savings to be passed on to you. 

At least engage the services of an attorney. A transaction agent is a glorified secretary and cannot negotiate, give advice or guidance. 

  • October 04 2013
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Profile picture for hpvanc
I would get the contract reviewed by an attorney before I signed it. I don't think there is anything wrong with a transaction broker that is capable of being a truly neutral professional service provider, in fact that is what I would prefer, unfortunately I think the pool of agents capable and having the appropriate credentials to act in a professional service provider capacity is limited.
  • October 04 2013
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- Is this a good idea for us? 

That's up to you!

- Will this actually save a significant amount of money?

Hard to tell, it kinda matters, savings "from what?" 

-  Will we still be able to get the things that we want like closing cost paid and home warranty?

Well, you're going to have to negotiate for it, I'm sure.

Here's the thing. It is EXTREMELY difficult to get an agent to represent you fully in a one-off transaction. They will only get paid if THIS deal goes through; if it doesn't they don't know if you'll buy another place with them or not.

On the other hand, it's easy for your landlord to have an agent represent them, because if they don't sell to you, they'll likely get the listing anyway.

My advice is to ask your lender for guidance.

All the best,
  • October 04 2013
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I'm not sure which State and County or City you are buying because there are disclosures and building or fire codes specific to the area that you have to be aware as well, like Natural Hazard Disclosure that tells you a lot of things regarding the property being in the... i.e. flooded area? fire hazard area? earthquake are?. Also inspections that might be required by the lender and also for your own peace of mind, i.e Home Inspection, Termite Inspections, etc. So, having a Realtor or Real Estate Attorney review your contract or represent you will the best route to take. 
  • October 06 2013
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Krista,
Like the others have said, it is always good to have someone representing your interests and your rights.  That can be a real estate agent, but more importantly you should hire a real estate attorney that you can walk you through the purchase contracts.  While having no real estate agents will save the seller money, think about your peace of mind and what that is worth for you.  If you want an agent representing you in addition to an attorney, you could offer to pay the Realtor if the seller will not.  There are Realtors out that that do "a la carte" type services where you can choose what you want them to help you with and they will provide the costs.  Either way, make sure you are comfortable with how the deal is moving forward.  It's the biggest purchase of your life!  Good luck!
  • October 07 2013
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