is there a 12 step program for house selling?

June 28, 2012 11:41 AM

How do I sell a house? I want the nuts and bolts procedural steps. FSBO?

I am the executor of my father's will. In it he directed the house be sold to his brother (my uncle). The brother wants to buy, so there's no problem there. The will is probated, so no problem there. He is prequalified for a mortgage, no problem there... We don't need a realtor, right? I think this falls under FSBO, but all the FSBO sites I find are geared towards listing a property. There is currently a mortgage on the house which is not transferable. So I guess the basic steps are sell it and collect the money to pay off the mortgage. But how?

posted by Gungho to work & money (16 answers total)

Real estate lawyer will prepare the agreement. Should be very straightforward.
posted by smitt at 11:42 AM on June 28, 2012

The value of a real estate agent is in making sure that the deal follows your state's laws for buying and selling a house. In some states, there are an incredible number of disclosures that the seller must make, regardless of who the buyer is. There are inspections and reports. There is an unbelievable amount of paperwork. A real estate agent should be willing to do it for a fraction of their normal compensation since they don't have to do any marketing and it's fairly quick money. A real estate lawyer also may be able to fill that role for their hourly rate.

Regardless, involve SOMEBODY who does this for a living, and be willing to spend a little money. Otherwise you may be laying the groundwork for some real unpleasantness later on. Especially with family, things can get messy when people suddenly realize that some of their assumptions about the transaction were not shared by the other parties.
posted by Longtime Listener at 11:55 AM on June 28, 2012

What smitt said. You don't need a Realtor. You will want a real estate lawyer to draw up the paperwork properly. You'll need a purchase agreement and then there are various things that need to be recorded with various authorities to complete the sale (like transferring the deed and recording the discharged mortgage and so on).
posted by agentmitten at 11:57 AM on June 28, 2012

Lawyer. There is no need for a real estate agent in this case.
posted by ssg at 11:59 AM on June 28, 2012

You definitely want a real estate lawyer. S/he will make sure that everything that needs to happen (and there will be a bunch of it) happens, and handle all the money changing hands between people / mortgage companies / government. I don't think anything you're doing requires a realtor to get involved.
posted by dfan at 12:00 PM on June 28, 2012

As others have said: use a lawyer with whom you can negotiate a flat or hourly rate. Real estate agents usually get paid a commission based on the sale price. They can help a seller find a buyer, or a buyer find a house, but those skills are not needed here. Some real estate agents may be very familiar and skilled with the paperwork involved; but the majority spend time and efforts on the sales aspect of the business. Lawyers are all about the paperwork and disclosures and inspections getting everything right.
posted by RandlePatrickMcMurphy at 12:20 PM on June 28, 2012

In some states you can use a title company to do the transaction.

Where are you? I know that in Georgia we had to use a lawyer, but in Florida we didn't.
posted by Ruthless Bunny at 12:21 PM on June 28, 2012

Oh, and you can negotiate fees with the title company, they may charge different prices so call around and get a couple of quotes.

The bank providing the new mortgage may typically use a particular title company, but you don't have to use them.
posted by Ruthless Bunny at 12:22 PM on June 28, 2012

I bought a house FSBO. We had a title agent handle the paperwork (which, I believe, you'll need to do). A realtor gave me some cursory advice on forms I would need, but she told me "you can do this without me."

As seller, there's not a lot you need to do except collect the check and sign some papers. I think there are some forms you'll need to prepare, which will vary from state to state, but really, very little.

Your brother the buyer will have more work to do. He'll need to get an appraisal and an inspection to satisfy the bank, a title search, possibly a survey.
posted by adamrice at 12:26 PM on June 28, 2012

Ruthless, why should the seller care about the validity of a title? Isn't it caveat emptor?

And thanks to all for basically telling me to hire a professional. OK. How much$$$ would a lawyer charge to oversee the transaction?
posted by Gungho at 12:27 PM on June 28, 2012

Yes, check around and find a real estate lawyer. For one data point, when I sold a condo in Washington DC a few years back without a realtor, the lawyer charged $600 (on top of the regular closing fees).
posted by Mr.Know-it-some at 12:27 PM on June 28, 2012

Ruthless, why should the seller care about the validity of a title? Isn't it caveat emptor?

The seller may not care about the state of the title, but the mortgage company your brother is using absolutely cares - if they pay you the money for the house and it turns out the title isn't clean, they have no money and no house. They will want a title search before the transaction is closed, and they will want your brother to buy title insurance for them. This is just one reason why both you and your brother need to talk to a real estate attorney.
posted by muddgirl at 12:35 PM on June 28, 2012

Title companies do the transactions, doc stamps, escrow settlements, closings, etc, not just the title search (which, btw, is common for the mortgage holder to INSIST upon).

They can be called Title Closing Agents. If you live in a state where it is not mandatory to have an attorney at the closing, this is your cheapest option.
posted by Ruthless Bunny at 12:37 PM on June 28, 2012 [1 favorite]

Talk to the lawyer handling the probate. Since the house is in probate, it is very likely that there will have to be court approval of the transfer.

You will not need a realtor. You do need a title company involved to handle the closing. They will prepare the documents (or handle the documents delivered to them by your brother's lender such as the promissory note, mortgage, etc.) They or the probate attorney can prepare the executor's deed (from your father's estate to your brother). They handle getting taxes paid, filing costs handled, deeds recorded. They receive the lender's funds then disburse at closing. They are the linchpin of the process. The probate company can recommend a closing agent for you.
posted by chicxulub at 12:54 PM on June 28, 2012 [1 favorite]

Since you asked about cost... My lawyer charged $600 for her fee. The rest ($1300ish) was for title insurance, but that varies by sale price.
posted by smalls at 2:25 PM on June 28, 2012

Oh sorry, I am in Connecticut
posted by smalls at 2:26 PM on June 28, 2012