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December 29, 2009 at 6:31 PM #497883
analyst
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First, and most importantly, people do not sell at 20% below market just to avoid a 6% real estate broker fee. If you are confident in your ability to place an accurate market value on the house, assumed to be in good condition, the discount is for some reason, and you should be clear what that reason is.

The most difficult challenge in buying, with or without an agent, is accurately assessing property condition.

For assessing the condition of a house, real estate agents can be incredibly helpful (rare) or completely useless (common). Not having an agent in the deal is no loss as far as property assessment is concerned.

Unfortunately, many of the “professional” property inspectors, who charge as much as $500, are also nearly useless, when it comes to certain high-cost areas (foundation, roof, plumbing, electrical, heating and air conditioning, pest control).

If this is a California house, the law requires full disclosure by the seller of negative conditions of which the seller is aware. Selling “as is” does not remove the seller burden to disclose. It only alerts the buyer that the seller will not remedy any negative conditions disclosed or discovered.

First, seek out an escrow company that caters to transactions without agents, and will assist with the voluminous paperwork requirements.

Second, insure that your offer to purchase is contingent on your acceptance of negative conditions disclosed by the seller and any property inspections. In agent-involved deals, there is commonly a 17-day period after offer acceptance, during which the buyer can back out without putting any deposit money at risk.

Third, insure that the seller understands his burden to disclose all negative conditions, regardless of the “as is” declaration. Deliver this advisory in person, and pay very close attention to his reaction upon being told.

Fourth, select your property inspector(s) carefully if you decide to proceed. If you are indeed buying well below market (for a squared-away house), you can afford to engage specialist contractors to separately inspect each of the high-cost areas mentioned above.