Newbie Buying FSBO Question

woodroadMarch 12, 2010

Hi all,

It seems that there are many knowledgeable people here who may have insight for me and my husband. We are in the midst of negotiations to buy a FSBO home. It is our first time buying a home, and we are in PA.

For some back story, it has been something of a roller coaster working out the sales agreement, and for a time, we believed that it would fall through,(this was after we had a verbal agreement and were both working with attorney's to complete the sales agreement). We ended up raising our offer a bit, and it got the negotiations going again.

One thing the seller has asked is that we allow his attorney to handle the closing process. His attorney has a title company, so I am assuming that this means that he wants his lawyer to also function as the title company. Our lawyer made a comment that this may be a conflict of interest. Other opinions we have gotten are that the title company is just there to process the transaction and it does not matter who does it. Since this is all new to us, now we are rushing to get an education.

So, do you have experiences/advice about whether it would be a conflict of interest to use the seller's lawyer's to close the transaction?

Also, the seller is rather emotional about selling this house, and is fairly unpredictable. We are concerned that anything he does not like might just cause him to walk, so if we can agree to his request, we are happy to do so to keep things going smoothly. And yes, unless the door totally shuts, we do really believe this is "the house", though this negotiation process has been extremely trying. Thanks for any insight!

Thank you for reporting this comment. Undo
linda117117

I'm not sure how real estate works in PA, but if your atty believes it is a conflict of interest, let the sellers atty handle whatever closing issues are sellers issues, your atty can handle your issues (the buyers issues) and have a separate person who does title. (This is how it is done in NY). (In NY,the buyers atty handles getting the title company). Since the title is probably the biggest issue with purchasing a home, I wouldnt want the sellers atty guaranteeing that the house has clear title. (He represents the sellers best interest, not yours)

    Bookmark   March 12, 2010 at 11:24PM
Thank you for reporting this comment. Undo
redcurls

It's usually the SELLER who's worrying about the buyer walking. Hold your horses......or get saddle burn...

    Bookmark   March 12, 2010 at 11:26PM
Thank you for reporting this comment. Undo
mehearty

If there are any title defects, you will be purchasing them with the home. There's a reason this seller wants to be in control there, and it's likely not in your best interest at all.

Take your attorney's advice.

    Bookmark   March 13, 2010 at 8:14AM
Thank you for reporting this comment. Undo
berniek

That's what title insurance is all about. Insuring you against defects in the title. Make sure you get it, regardless who wants to handle it.

    Bookmark   March 13, 2010 at 11:12AM
Thank you for reporting this comment. Undo
mariend

There are several postings on FSBO here and you can google it also. Lots of warnings and suggestions. If you really feel uneasy, back off and wait a year or so. You may find something else that is just out there waiting for you.

    Bookmark   March 13, 2010 at 12:22PM
Thank you for reporting this comment. Undo
worthy

Dual representation is evidently legal in PA., but raises a host of ethical dilemmas and potential conflicts. Stick with your own lawyer.

So concerned here are institutions on even the appearance of conflict that, on my upcoming home closing, the mortgagee's conditions include mrs. worthy getting an ILA (Certificate of Independent Legal Advice) as the title will be in my name while it is a matrimonial home.

    Bookmark   March 13, 2010 at 9:53PM
Thank you for reporting this comment. Undo
cocontom

One caveat with title insurance- my cousin bought a house with a detached garage. A few months later, the lot that the garage sits on was sold in a tax auction. As it turned out, what he was sold was 123 Sesame Street, and the garage lot was 123A Sesame Street, so the whole thing wasn't covered by his title insurance. I don't know how everything shook out (I see him maybe once a year, and it was ongoing one year and a sore spot the next, so I didn't ask) other than he did get his garage back.

One other option, other than a screwed up title- his lawyer will give him a break on fees if he uses him as the title company.

    Bookmark   March 14, 2010 at 12:48PM
Thank you for reporting this comment. Undo
woodroad

Thanks for the replies. We have another call in to our lawyer to get his thoughts. We also called the seller's lawyer and spoke to the licensed title agent there. She said that it is her responsibility to make sure that everything is done fairly and her license depends on it. So we are still working it out, but are very cautious. The seller has gone dark in the last couple days anyway, so we may never even get that far! And though the house is great, this difficulty with the seller does begin to make it seem a bit less attractive. Thanks again for the replies.

    Bookmark   March 14, 2010 at 8:09PM
Thank you for reporting this comment. Undo
mauirealtor

Wood, as it is too late to engage the services of a Realtor (who would have been paid a commission from the seller, not you, so it wouldnt have cost you a cent), I would suggest STRONGLY that you follow the advice of your attorney, after all that is why you are paying him. Although it is legal for a broker or attorney who is a party to the transaction to serve as the escrow service, it is frowned upon as conflict of interest is inevitable. Good luck and updated us on how it turns out.

    Bookmark   March 16, 2010 at 2:16AM
Sign Up to comment
More Discussions
Seller's Market; don't be hasty!
My friend has been house-hunting for a particular type...
jewelisfabulous
Realtor company fee
Buyer agent told me there is $300 fee to realtor company....
net42k
Ever used Flat Listing Real Estate Company?
Hello all! We are seriously considering listing our...
Lizzie
How to Flip. Remodel doubles price of house
The prices are San Francisco values, but it's a terrific...
sushipup1
Getting house ready to sell and have door knob question.
My house is going on 11 yrs old. Everything is pretty...
padillasideas
© 2015 Houzz Inc. Houzz® The new way to design your home™