Buying house from neighbor without a real estate agent

[Dominic Nguyen]

I was approached by my neighbor if I wanted to purchase their house since they plan to move in the next three months for new job opportunities. It will be an off market deal. To save on fees for both parties, we are planning to handle the transaction ourselves. I plan to form a partnership with three other friends for this deal. 

1. When should I form this partnship and open a business bank account to pool capital?

2. What documents should we be prepared to fill out?

3. Should we work with a lawyer?

4. I assume we should get the property appraised? How else can we get the property valued correctly?

5. Should we remove the real estate agents from this transaction?

The most important question is should we do this at all?

[Jason Wray]

Dominic,

You have a lot of questions which is great but the questions demonstrate this is your first REI and having partners can complicate things if not handled correctly. This is where having a seasoned real estate agent comes in handy. Realtors are well versed in contract law and verbiage to help avoid issues during and after closing.

Agents also work closely with the Bank/Lender to help the buyers and sellers close on time and without issues. The Bank handles the appraisal you cannot order one by law if financing is involved due to AMC rules under the Dodd Frank act. The Bank also communicates with the title company to order chain of title and require lender/title insurance. That will provide you with confidence knowing there are no taxes owned or unpaid liens.

I have worked with Lucia Rushton in DFW multiple times who can great agent and it is well worth using her to avoid painful mistakes!  You can find her on Bigger Pockets as well reach out to @Lucia Rushton