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By David deForrest General Manager When purchasing a condo directly from owner, what would be the best procedure? Could this be done without a lawyer and just getting a title search? How does the money exchange hands?The short answer would be, look in the Yellow Pages for a title company. They can handle the money and prepare the documents required for a sale and transfer. But this is actually an interesting question the deeper you look into it. There is a better answer: each of the parties ought to engage the services of a competent real estate broker and a real estate attorney. Assuming that Buyer and Seller are carrying on an arm's-length transaction (that is, that they are not related) both would benefit from professional help. This is the "gold standard" and, yes, it has some costs. It is not through the charity of Sellers that Realtors are able to obtain commissions on so enormous a preponderance of real property transactions. Contrary to the popular misconception, we earn our keep. Since you are a Buyer, let's look at things from the point of view of the Seller first. For example, Mr. Seller may not be getting the best possible offer for his property. Surely he would be wise, no matter how generous you have been with him, to expose his property as widely as possible to the greatest possible number of potential buyers rather than limiting himself to individuals, such as yourself, who are even willing to attempt to deal with the intricacies of handling the transaction unaided. After all, you would have to acknowledge that many potential buyers would balk at carrying the proposed transaction through on the basis you describe. Often they are the ones who will pay the highest price in the market, that is, the least sophisticated and most motivated buyers. In our business, we often find that "For Sale By Owner" works out to be "For Sale To Bottom Feeders." This is not meant to offend you, it's just true that buyers for "By Owner" properties are seeking a super-bargain, that's why they are willing to deal direct with the Seller without the reassurance and (in many cases beneficial) "goading" of a Broker. But assuming the Seller has found a fair and equitable price in your offer, the next problem, for both parties, is, "How do I make it stick?" We've all heard of "buyer's remorse." As soon as Mr. Seller has agreed to Buyer's price, Mr. Buyer can't help but wonder, "Maybe I could do better?" And, of course, Mr. Seller may well find that now that someone has agreed to pay a specific price for the property, some other potential buyer is now willing to "top" that price since another buyer has validated it in his mind. There is no legal requirement in Florida that a sales contract even exist for the sale of a property to go forward. However, unless the terms of the sale are in written form, they cannot be enforced! That is, at any time, for any reason, either party could simply change his mind and walk away from the deal. Don't think that this does not happen frequently. If you were selling your home, for example, and you made arrangements to vacate it, maybe even purchased another property, your losses could be substantial if at the last minute Mr. Buyer tells you he found a better deal somewhere else and adios. The same is true for the Buyer...you'd hate to pay for physical inspections, title examination (if you bother) etc., and then find out later on that someone else has purchased "your" property and that you have no recourse at all. One of the advantages of using a Realtor is that he/she is competent to prepare a binding agreement between the parties. Moreover, although there are local (and they vary by county in this state) standards for who "normally" pays which expenses of the sale, such as documentary stamps on the deed, intangible tax on the mortgage, how the prorations are handled on property taxes etc., there is no law about it. These matters can add up to thousands of dollars and, without a formal contract, can be the subject of disputes and lost deals at closing. Then there are the technical aspects of securing "marketable" title: title search, examination, disclosure and discharge of any liens and preparation and recording of the deed and any corrective instruments. None of this is required by law in order for Seller to grant a deed to you. All that is required is that he be of sound mind, legal age and give you a deed notarized and witnessed. But it is obvious that this, in itself is insufficient for your peace of mind and the protection of your investment. This work can only be performed properly by a competent real estate attorney. So your question could, I suppose, be rephrased as "How can Buyer and Seller avoid paying for any and all professional services in connection with the purchase and sale of real property?" The answer is: you can easily dispense with all of them but the further you depart from the "gold standard" the greater the risks to one or both of you. In proof of which, I can only add that I have managed this brokerage for 6 years and have been an active real estate investor here for 12. However, whenever I buy a piece of property myself, I use a real estate attorney to close my transactions even though I am surely more competent to handle these matters than "Mr. Buyer" and "Mr. Seller". Moreover, when I had a property for sale outside of our local market area a few years back, I hired a Realtor to sell it for me even though I was managing the property myself and was available to show it "By Owner." So whether you agree with my arguments above or not, I can only tell you that they are not based on some kind of self-interest (I have no reason to believe that this particular property is located anywhere in our market area) but because I think the Seller is being foolish in how he is handling the transaction and that indeed you would both benefit rather than lose from hiring competent, professional help.
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