HOMEOWNERS AND HOME BUYERS:
THE PRIVATE SALE
A Private Sale is one conducted outside of the Multiple Listing Service, where the owner has an attorney. The home buyer has four options: (1) retain an attorney; (2) retain a real estate agent; (3) remain unrepresented; (4) share the owner's attorney. As attorney for the owner I have experienced buyers who elected option (1) or (2), excellent; and option (3), which is tedious, but doable. I reject option (4) because I am not interested in being a mediator. I am either the attorney for the owner or for the buyer.
Some owners favor a Private Sale in order to avoid all or at least half of the real estate commission. Commissions are negotiable. Assuming a 5% commission on an $800,000 home, it is $40,000; on a $1,300,000 home, it is $65,000.
The incentive for the home buyer is, generally, a price concession: also, the ability to purchase a home without the spectre of multiple bids. However ..... how many potential buyers in this torrid market are showing up at Sunday Opens without their agent a text-message away? So it is more probable that the owner will save half of the commission, than all of it.
To help conceptualize the standard transaction I break it down into three phases. They do not run sequentially, but overlap.
OFFER AND ACCEPTANCE
This phase begins with the opening of an escrow and reviews of the preliminary title report and of the buyer's preapproval status. Although the purchase contract originates with the buyer, in a private sale it may be efficient for the parties to cooperate in drafting that contract, and accompanying addenda, such as a rent-back agreement. This avoids the aggravation of Counter Offers. The date on which the parties reach written agreement on price and terms is referred to as the Date of Acceptance - from which all time periods flow. The buyer then forwards the initial deposit to the title company - not to the anyone else.
DISCLOSURES AND INSPECTIONS
Owners must prepare property disclosures - both contractual and statutory. To wait until Date of Acceptance before assembling the disclosures package may invite confusion, surprise, delay. Approval of disclosures is a standard buyer contingency. If the disclosure package is available before/as the parties negotiate, then the time period for approval begins on Date of Acceptance.
Homeowners must also comply with resale ordinances, if applicable. The most tedious is the sewer lateral inspection. As with the disclosure package, I recommend compliance before listing the home, to avoid confusion, surprise, delay after escrow has already been opened.
Within the time period agreed to in the purchase contract - customarily 7-10 days - the home buyer should have the home inspected. I recommend at least two inspections: one by a licensed contractor in the business of home inspections, and another by a structural pest control operator.
FINANCING TO CLOSING
Buyers should submit requested financial documents and verifications to their mortgage lender before embarking on their search. The pre-approval letter then accompanies their offer package. Approval of the appraisal and of the loan(s) are contingencies that must be removed by buyers within the time periods specified in the purchase contract.
At this point in the transaction escrow officers become actively involved ordering payoff demands, preparing settlement statements, coordinating with the lender for delivery of the loan documents, arranging signing appointments for the parties, and recording the Deed and Deed of Trust. The day of recordation is Close of Escrow.
Flat fee determined by client needs, and on whether the buyer is represented. No percentage fee. No hourly fee.
On a case-by-case basis I will consider representation outside of San Francisco and Marin Counties.
All information on this site is deemed accurate but should be independently verified. In addition, some information is date sensitive.
For specific questions and inquiries on a pending transaction contact the Lawyer Referral Service for the County in which the property is located.
400 Montgomery 505 San Francisco 94104 ~ 415.781.3000
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