REAL ESTATE TOPICS...How to buy a property without a real estate agent

By Ilyce Glink and Samuel J. Tamkin

I’m planning to buy a property from a friend without using a real estate agent. What is the process to buy a home without an agent? Can I use an attorney to help purchase the property?

Yes, you can buy a home without using a real estate agent. There’s no law that says you have to use an agent to purchase real estate. It’s just that the process is complicated and many people don’t know where to begin.

But if you have a friend who owns a home and that friend is going to sell you the property, you would likely want to hire a real estate attorney to help prepare documents and make sure that those documents not only protect you, but are filed correctly to protect your interest in the property. The good news for you is that many real estate attorneys will charge you a flat fee for preparing the documents and handling the closing.

The first step is to come to a meeting of the mind with your friend about the price you’re willing to pay, the date of the closing, whether you’re going to have any contingencies added to the contract (a home inspection contingency, a mortgage financing contingency and an attorney rider are the most common), and what, if any, furnishing, appliances or fixtures are going to be sold along with the property itself. Depending on where you live, sellers may include appliances like a refrigerator, outdoor patio furniture, light fixtures and built-in-bookcases or Murphy beds. Anything that is going to be left behind will need to be specifically itemized in the contract.

Next, if you are getting a mortgage and don’t have a firm commitment letter from the lender, you’ll want to work with the lender to make sure your financing will go through once the property has appraised out in value. Once your financing is locked in, you’ll be able to satisfy that mortgage contingency.

For the inspection contingency, you’ll need a good professional home inspector who can walk through the property and ascertain that it is in good shape physically. If there is a hidden problem, you or your attorney will need to work with your friend on the purchase. If you’re purchasing the home in “as is” condition, you might still want to have a home inspection so you know what problems you might face in the near future. Or in the case that the home has a serious deficiency, you can still get out of the deal.

Your attorney (or in states that use “closing attorneys”) can conduct or assist you with the closing, but you will still need a title search done to make sure that your friend owns the property, subject to any liens that are discovered and to know the status of the title to the home. The title company can assist in the closing as well. If you are using a lender, the lender will insist that you pay for a lender’s title insurance policy, but we think it’s a good idea to buy an owner’s policy as well. That way, you’ll be protected just in case someone or something unexpected pops up that is a covered item under a title insurance policy.

There are a couple of other things you might want to do: Typically, home buyers do a final walk-through of the property, preferably after the owner has moved out, so that they can make sure the property is in the same condition as when they made the offer to purchase. Since you’re buying from a friend, we don’t imagine that this will be an issue. Lastly, you’ll need to set up utilities in your own name for the new property, to take effect on the closing day.

Depending on the state in which you live, the seller may be obligated to make certain disclosures to you, such as giving you a completed, written seller disclosure form, or if you’re buying a condominium, providing you with a copy of the condo doc, and current rules and regulations. If you are moving into a condo or townhouse development, be sure to check the rules on pets, rentals, and nonfamily members who live with you.

Your attorney can fill in the blanks. Good luck to you and your friend, the seller!