Selling rent home to tenant

[misirlou]

Years ago we moved out of our Austin home, but we kept it as a rental property. The current tenant is interested in buying it.

I expect that I can work out the pricing negotiations, and if the deal falls through, then worst-case it just stays a rent property.

However, having never actually sold a home, I would like to have someone make sure that I don't dork something up and create a legal issue (i.e. someone to make sure that I walk through all of the proper steps).

Do realtors normally insist on getting their 3% even if they only need to consult (i.e. don't need to market the house, look for buyers, etc.)?

I have a call out to our former realtor, but I'm trying to set my expectations.

 

[Sangre Naranjada]

Realtor fees are always negotiable. If it's only a matter of doing the paperwork, I think 1% would be a reasonable expectation.

 

[BigWill]

probably be cheaper to hire a lawyer to do the sales contract.

 

[NickDanger]

BigWill is spot on. Yours is a legal matter not a realtor matter. All that listing realtors do is enter a home onto MLS, maybe spend some money on a brochure, maybe spend some money on a Sunday paper ad (in a paper rag that no one reads anymore), maybe adequately coordinate showing and then refer you to the title company of her choice. All the selling realtor does is squire clients around hoping they finally decide on something until they collect their limo fee.

So what exactly which of those missions would be accomplished by either listing or selling capacity? So what is left they might do? Help you understanding the legal consequences of the documents you need to execute and file?

Tell any realtor who asks for 3% to go **** themselves and be prepared to lose their realtor license for the unauthorized practice of law. In your case, I would expect it wouldn't be very difficult to find a lawyer who would usher you through the process for either a flat fee or an hourly and that it would be FAR less money than some ditzy divorcee would charge you for giving legal advice.

The forms you need are all free on the TREC website. Earnest Money Contract is unnecessary imo. Seller's disclosure statement is probably required. I don't know if TREC has forms for a note, deed and deed of trust, but that's about all you really need if you are going to finance the tenant. I do NOT know for sure since I never practiced non-litigation much, but a contract for deed is probably your best way to go. Think a realtor would suggest that? Find any RE attorney in Austin and ask these questions and ask for a free initial consultation and a firm price for the whole deal. The only thing YOU need is to secure your right to get the house back if tenant defaults and to make sure you have adequately disclosed things so that they can't claim you withheld info that you knew about. And that the latter is almost obviated by the fact that the tenant now probably knows the house better than you do.

If the tenant is going to go get a third-party loan then it is incumbent upon them to ask for more than a quitclaim deed and a TREC disclosure statement. They probably have some other disclosures they would require. Asbestos (your knowledge of it), and...wellI, can't think of anything else, but I am NOT a real estate attorney. I am a firm believer that people overlawyer themselves.

In any event, if you pay a realtor 3% you will still need that advice and the realtor would essentially get 3K for telling you to talk to Larry the lawyer anyway.

 

[BOSS]

In reply to:

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[NickDanger]

Grateful someone with expertise stepped up for Misirlou. The contract for deed laws NEEDED to be revised. I didn't know they had. Never was my area of interest, but I bet we can agree that 3% to a realtor is a total waste of money.

 

[BOSS]

The laws needed to be revised, but I think they went too far in protecting the buyer under a contract for deed.

At any rate, we are agreed that hiring a realtor is the wrong person to hire in this particular situation.

 

[busterbrown16]

I may be a bit late in responding on this thread. I am always on board to jump on the band wagon of bashing realtors as I think they are the biggest waste of cash in any profession (including lawyers).

With that said, I do have a friend of mine that is a realtor/broker and he typically does a flat fee for me if I ever get a title company or realtor that refuses to deal with me on a transaction. He usually charges me a flat rate and he prepares everything and basically serves as a straw man for me. He is in the DFW area, but I can get you hooked up with him if you need someone.

DO NOT USE A REALTOR!!!

 

[BOSS]

What kind of paperwork is this realtor/broker doing? I could be wrong, but there is a fine line between helping and the unauthorized practice of law.

 

[busterbrown16]

It's a little more involved than what my post led on, but I was trying to simplify it. There is no unauthorized practice of law going on.