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Re: Buying a Home!!!
Wow that's pretty exciting...congratulations!
I live in hope that Australia's property market will collapse, as you can see from this graphic of USA and Australian house prices...the current situation is a little depressing for people my age and younger.
Oh my goodness, wow.
Re: Buying a Home!!!
Thanks for the invite. Congrats on the seller covering the costs, and best wishes in the new home.
Yeah, I was pretty firm in my stance on them covering the closing costs. I got a 6% concession for it, which technically is going to cover more than closing costs, but they don't need to know that 
Re: Buying a Home!!!
Cramer wrote:Cool, so you're officially under contract now?
Yes, it's a private sale so we don't have realtors. I drafted an Offer to Purchase Real Estate and the seller and I signed that last night. They didn't ask me for any good faith payment, so I haven't officially paid anything yet, but the house is ours.
The appraisal will start soon, then closing, and that's pretty much it.
This process has been a dream, I'm so glad we haven't been through the horror story ringer that a lot of my friends have.
I've never heard of a seller not requiring any escrow money. Usually it's 1% or purchase price. They must really trust you? Is this an official state bar approved contract that realtors would use? You want to make sure they can't dump you if a higher offer comes in. Usually escrow money held in at a title company would secure a real estate deal and helps both parties adhere to a contract and be protected.
I hope you are having the home inspected? That's the best 200-400 bucks you'll ever spend in your life. You may also want to do an inspection specifically for termites as well if that's a wood frame home.
I'm not trying to be negative, but the house is not yours at all, not even close yet. You have inspections, appraisal, loan approval process and anything else that may come up in the meantime. Likewise I've seen plenty of deals fall apart and some literally fall apart at the closing table. I'm also really concerned that you have an accepted offer without any escrow money or title company involved.
Re: Buying a Home!!!
I've never heard of a seller not requiring any escrow money. Usually it's 1% or purchase price. They must really trust you? Is this an official state bar approved contract that realtors would use? You want to make sure they can't dump you if a higher offer comes in. Usually escrow money held in at a title company would secure a real estate deal and helps both parties adhere to a contract and be protected.
I hope you are having the home inspected? That's the best 200-400 bucks you'll ever spend in your life. You may also want to do an inspection specifically for termites as well if that's a wood frame home.
I'm not trying to be negative, but the house is not yours at all, not even close yet. You have inspections, appraisal, loan approval process and anything else that may come up in the meantime. Likewise I've seen plenty of deals fall apart and some literally fall apart at the closing table. I'm also really concerned that you have an accepted offer without any escrow money or title company involved.
They trust me and know me personally. It's an informal offer to purchase that was provided by my mortgage company. It's not technically legally binding, so either of us could walk away without any true penalty, apart from being an asshole. As for what you said about never having heard of a seller not requiring escrow money, that may be something I don't have to deal with since neither of us are using realtors.
I had the home inspected last Friday, before I made my offer.
I have already done the inspection, initiated the appraisal, been approved for my mortgage, and secured homeowners insurance. I think I'm prepared.
I am not concerned about them having accepted the offer without escrow. I could have (and offered to) write them a check for a good faith payment, but they didn't want it.
Are you a realtor or involved in real estate in any way?
Re: Buying a Home!!!
If you know them personally then that's different I suppose, although still risky (to me anyway.) Personally I'd never purchase a home without a standard RE contract that adhered to state laws and deposit as it protects both parties.
Escrow money has nothing to do with realtors, it's standard for any real estate transaction. A good faith deposit could be anything, one dollar if you wanted, but generally is 1% of purchase price held by a third party (usually title company or lawyer) and applied to closing totals.
I'm sure you'll be fine, I'm not trying to be a jerk, it just sounded a bit unorthodox to me (and still does.) When somebody says "The house is ours" but only has a contract, then I tend to err on the side of caution. But if you're buying from a personal friend, then perhaps a laid back approach will work out just fine. In my experience, I trust nobody and have seen seemingly nice people become petty, small minded and vindictive if things don't go their way (low appraisal, inspection issues etc.) I sold my home to a very nice lady two months ago, and despite how well we got along, I made sure she gave me money immediately (she had 3 days from an executed contract) and stuck to her timeline. Thankfully she was great to work with and had her shit together. The couple before her, who also was great (we had them over with their kids), ended up being a nightmare and wasted 6 weeks of my time, lied and wouldn't respond to phone calls after only 3 weeks in.
Yes I'm in the real estate industry.
Re: Buying a Home!!!
If you know them personally then that's different I suppose, although still risky (to me anyway.) Personally I'd never purchase a home without a standard RE contract that adhered to state laws and deposit as it protects both parties.
Escrow money has nothing to do with realtors, it's standard for any real estate transaction. A good faith deposit could be anything, one dollar if you wanted, but generally is 1% of purchase price held by a third party (usually title company or lawyer) and applied to closing totals.
I'm sure you'll be fine, I'm not trying to be a jerk, it just sounded a bit unorthodox to me (and still does.) When somebody says "The house is ours" but only has a contract, then I tend to err on the side of caution. But if you're buying from a personal friend, then perhaps a laid back approach will work out just fine. In my experience, I trust nobody and have seen seemingly nice people become petty, small minded and vindictive if things don't go their way (low appraisal, inspection issues etc.) I sold my home to a very nice lady two months ago, and despite how well we got along, I made sure she gave me money immediately (she had 3 days from an executed contract) and stuck to her timeline. Thankfully she was great to work with and had her shit together. The couple before her, who also was great (we had them over with their kids), ended up being a nightmare and wasted 6 weeks of my time, lied and wouldn't respond to phone calls after only 3 weeks in.
Yes I'm in the real estate industry.
Well given those experiences, I can definitely understand your hesitation. I'm a cautious person when it comes to trusting people in general (been burned far too many times by friends, family, and strangers), so I think I'm square.
Thanks for the cautious words though.
