Buying a home without Realtors

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Submitted by greekfire on June 23, 2008 - 9:42am

A member of my family back in Maine has died and they have moved to another state. They are eager to sell their multi-unit property and I am interested in possibly purchasing it. Does anyone have any advice on how to purchase it without realtors? I have never purchased property before and plan on staying here in California. Any advice would be greatly appreciated!

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I generally suggest using a
Submitted by EconProf on June 23, 2008 - 10:24am.

I generally suggest using a vetted, honest agent in both the buying and selling of properties. Intrafamily transfers are the rare exception. Use a local attorney, or a local agent to handle the paperwork on an hourly rate or for a set amount.

As to the wisdom of owing a multi-unit property as geographically far away from San Diego as you can get--why on earth would you consider this? The potential problems and pitfalls are so numerous as to boggle the mind. Even an experienced property owner and seasoned manager would face huge costs and obstacles in doing this from afar. I could list the negatives, but it would take up so much room! Why don't you tell us what other factors or motivation would prompt you to consider this. What else is going on here?

I understand that there are
Submitted by greekfire on June 23, 2008 - 2:56pm.

I understand that there are some serious downsides to purchasing this property. I am only in the beginning stages of research and will not make my decision until I have done my due diligence.

The motivating factors, as I see them are as follows (in no particular order):

PROS
1. Large, 3-unit with a basement located 1 block from the ocean with ocean views. Each unit is 1500sf.
2. Proposed rents should cover mortgage, taxes, and potential vacancy problems.
3. I have family (my Dad) that I would pay perform repairs.

CONS
1. I live in the other corner of the country
2. Potential problems with renters (legal, financial, etc.)
3. Dealing with family in a business capacity
4. Vacancies and foreclosures are up
5. Other cons/expenses to look out for?

I'm sure there are many more cons to consider. I welcome the devil's advocate approach because it forces me to strengthen my reasons for pursuing this.

The Pros you mention should
Submitted by EconProf on June 23, 2008 - 9:43pm.

The Pros you mention should be reflected in the purchase price, which erodes its profitability, assuming you will pay a market price. If you can buy it way under market, then it will be more profitable...although this may raise eyebrows with your relatives. It is good that your Dad can perform repairs; hope he can also screen tenants, collect rents, perform other landlording chores.

The Cons you mention are very real, and a good start. I'd just plug into your calculations a healthy expense allowance since it is near the water--ask any beachfront landlord here in San Diego about maintenance. Also, are the tenants seasonal? If so, your vacancy rate should be investigated. Best might be to talk to other landlords in the area.

All in all, taking on a multi-unit rental should be viewed as a job. Most people going into it make over-optimistic assumptions about both expenses and rents. It seldom makes economic sense unless appreciation can be expected.

take a fsbo package from your
Submitted by fsbo on June 23, 2008 - 11:11pm.

take a fsbo package from your title company, it should include the paperwork you need to close your transaction; pay for RE attorney to review the paperwork for you to make sure 'legally correct'

fsbo: do you have any
Submitted by greekfire on June 24, 2008 - 10:27am.

fsbo:

do you have any recommendations for a title company?