How to buy a FSBO Off Market deal without a realtor?

Question

Hey everyone!

I currently have an opportunity to purchase an off market FSBO duplex in a great market. Most houses in the neighborhood are priced way too high to be utilized as a fully serviced rental by a property manager. By buying off market with no realtors it allows me to reduce the asking price by $15k which makes the property cash flow. This is my first time looking at buying a property without being represented by an agent. I have already walked through the property and am interested in making an offer but not sure how to proceed. This will be a financed deal so I am pre-approved and have financing lined up but currently don't have a real estate lawyer or title company.

Can you help me understand:

- before making an offer what should I have in place? Do I need to have a contract from a real estate lawyer already written up,etc?

- once I make the offer and if it's accepted, what are the next steps?

Thanks for your help!

Bryce Litwin · Answer

I have done this a couple of times.  I just got a real estate contract from my attorney and then both parties signed the contract.  We did inspections, had insurance set up, bank approval and then just closed at the attorney/title company office.  It's pretty easy.

Jeremy Sharp · Answer

Hey everyone,

Thanks for the continued feedback and valid points. I've been able to line up a great title company who my property manager referred me to. My biggest concern was figuring out how to determine if a title company is reputable/etc since I have used my realtor's preference previously. I was concerned using any random FSBO contract online for free or from a sketch company that has holes all over it.

This is a good road map for me to go from.

Thanks again

Tom Gimer · Answer

Without knowing all the facts it's hard to tell just how much a mistake would cost.

I wouldn't rush into a contract unless my agreement gave me the ability to walk if property condition, value, tenant situation, etc. was not as expected... and without an agent an attorney would be needed to help structure that.

Owen Dashner · Answer

Ok, please don't take this the wrong way, but you are not ready to buy an investment property yet if you do not even have a FSBO purchase agreement or know how to find a title company.  Pump the brakes for a minute and get your ducks in a row first.

You can contact most title companies in your area and ask for a FSBO purchase agreement.  Several in my area have them on their websites that you can download as a PDF and just print them out.  They are not much different than a PA used by licensed Realtors, they just have the Realtor listing/commissions stuff stripped out.  Most are standard, you just have spots you fill in the blanks, like: buyer and seller names, property address/legal description, purchase price and any other terms like financing, inspections, etc.  You'll also indicate who is handling the title/closing for you, when closing/possession takes place, and what is included in the sale (appliances, window coverings, personal property, etc.).  Also indicate if your offer is contingent on anything, or if you are accepting it in as-is condition.

If you aren't comfortable doing it yourself at first, you can certainly pay an attorney to help you or better yet have a Realtor or investor friend look it over.  Offers take like 5 minutes to write once you know what you are doing.

Jeremy Sharp · Answer

Thanks Kevin! Question for you guys...any advice on searching for a local title company? I've always just used whoever the realtor uses so haven't had to worry about it before.

Kevin Dong · Answer

Local title company would know that.  Just write up the contract put in the term.  Please don’t wait.  GET THE CONTRACT SIGNED first.  And worry about other stuff later. If it is a deal. Last thing you wanna hear froM the seller is someone just signed the contract with him 😂

Jeremy Sharp · Answer

Hey everyone,

Thanks me for the advise and knowledge. That helped and glad I waited to ask before I sent over a nonchalant offer.

I have a lawyer who has set up my LLC. Would he be adequate or is there a large difference in a lawyer specializing in real estate?

Great tips and I feel much mornconfident moving forward with this house.

Thanks!

Michael Noto · Answer

@Jeremy Sharp Just go directly to a local real estate attorney and tell them you are interested in putting an offer in on a property and you are not using an agent. They will be able to walk you through the process and provide you with a contract.

Obviously this iniital consultation, the writing up of the contract, and the fees associated with closing the deal will cost you money but that is better than screwing up something vital. Also, be sure that you hire an attorney that will be available to answer questions quickly if you need them answered in a timely manner. You no longer have the realtor as a buffer or advisor to answer unique questions that come up in a multi family transaction.

Make sure to make any earnest money out to the sellers attorney and not to the seller directly. You will not have an agent to guide you through that part of the transaction.

How to buy a FSBO Off Market deal without a realtor?

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