Buying property privately

Oct 2nd, 2020 5:41 pm

#1

desertfox [OP]: Sr. Member; Oct 31, 2009; 571 posts; 103 upvotes

Oct 2nd, 2020 5:41 pm

Hi folks,

We are in a position to buy a property and we meet seller through a friend and they want to sell it privately and not through a realtor, I guess so that they can maximize their profits and avoid realtor commission. We agreed already on the price and they are in no rush to sell. One of the conditions of us being approved for a mortgage rate from the mortgage broker is to have purchase sale agreement. The seller ask us to prepare one. So few questions we have in mind:

1) Do we need a realtor to help us draft the purchase agreement?
2) If we go this route, Does that mean that we have to pay the realtor instead of the seller?
3) And roughly how much realtors charge for representing the buyer?
4) or Do we go straight to a real estate lawyer and have their services with them?

Thanks everyone.

Last edited by desertfox on Oct 2nd, 2020 9:22 pm, edited 1 time in total.

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Oct 2nd, 2020 5:49 pm

#2

RichmondCA: Sr. Member; Mar 2, 2017; 803 posts; 1413 upvotes; Toronto

Oct 2nd, 2020 5:49 pm

Go to a good real estate lawyer and have them draft an agreement based on loose terms you've agreed to the seller with. The seller will want their own lawyer to review them mostly to ensure no warranties/etc, if they agree to the terms you can sign a definitive agreement and you are done.

You don't need to involve a realtor.

Realtor, Investor, CPA

+4

Oct 2nd, 2020 6:10 pm

#3

Furcorn: Sr. Member; Jun 7, 2017; 948 posts; 691 upvotes; BC

Oct 2nd, 2020 6:10 pm

Buy/sell privately is no problem at all. RE agents are not needed. Hire a RE lawyer to draft the agreement.
1. No.
2. No.
3. Irrelevant in your case.
4. Yes.

+1

Oct 2nd, 2020 6:25 pm

#4

NotRobot: Deal Addict; May 9, 2017; 1076 posts; 1116 upvotes

Oct 2nd, 2020 6:25 pm

Hopefully you are getting a slightly better price than market value by not involving a realtor and the seller nets more.
Win win.

Oct 2nd, 2020 6:33 pm

#5

desertfox [OP]: Sr. Member; Oct 31, 2009; 571 posts; 103 upvotes

Oct 2nd, 2020 6:33 pm

Thank you for all responses. I just contacted a real estate lawyer in he quoted us $1000 plus taxes to draft a purchase of sale agreement and another $1250 plus taxes for everything (legal fees, title search, registration, couriers and expenses etc) Is it about right in your area too?

Oct 2nd, 2020 7:06 pm

#6

teoconca: Deal Fanatic; Oct 16, 2008; 7921 posts; 2639 upvotes; Maple

Oct 2nd, 2020 7:06 pm

desertfox wrote: ↑ Thank you for all responses. I just contacted a real estate lawyer in he quoted us $1000 plus taxes to draft a purchase of sale agreement and another $1250 plus taxes for everything (legal fees, title search, registration, couriers and expenses etc) Is it about right in your area too?

Don’t forget to get home inspector.

+1

Oct 2nd, 2020 7:42 pm

#7

trebmember: Jr. Member; Jun 3, 2019; 173 posts; 139 upvotes; GTA

Oct 2nd, 2020 7:42 pm

desertfox wrote: ↑ Thank you for all responses. I just contacted a real estate lawyer in he quoted us $1000 plus taxes to draft a purchase of sale agreement and another $1250 plus taxes for everything (legal fees, title search, registration, couriers and expenses etc) Is it about right in your area too?

$1000 plus HST to draft an approx 6-7 page document (not including representation nor any of the other docs)...wonder why that's higher than his actual fee to close on the property

Realtor® & Mortgage Agent

Oct 2nd, 2020 8:00 pm

#8

desertfox [OP]: Sr. Member; Oct 31, 2009; 571 posts; 103 upvotes

Oct 2nd, 2020 8:00 pm

trebmember wrote: ↑ $1000 plus HST to draft an approx 6-7 page document (not including representation nor any of the other docs)...wonder why that's higher than his actual fee to close on the property

I live in BC and I don't have any idea as to the cost of drafting the document through a real estate lawyer. If sounds excessive I am wondering how much other real estate lawyer in BC charges?

Oct 2nd, 2020 8:20 pm

#9

trebmember: Jr. Member; Jun 3, 2019; 173 posts; 139 upvotes; GTA

Oct 2nd, 2020 8:20 pm

desertfox wrote: ↑ I live in BC and I don't have any idea as to the cost of drafting the document through a real estate lawyer. If sounds excessive I am wondering how much other real estate lawyer in BC charges?

Check RFD to see if there are any BC real estate agents near you that will draft it for you for a fee lower than $1000 (they can do a buyer customer service agreement where the buyer pays the fee instead of the seller). Or just look up agents in your area and ask them.

Realtor® & Mortgage Agent

+1

Oct 2nd, 2020 8:49 pm

#10

desertfox [OP]: Sr. Member; Oct 31, 2009; 571 posts; 103 upvotes

Oct 2nd, 2020 8:49 pm

I contacted a notary public and ask for a quotation and suggested to download purchase agreement form online signed both parties and bring it to them as they quoted me about $1,000 plus taxes if they draft a document too. What's the difference between using a notary public and real estate lawyer?

Oct 2nd, 2020 10:44 pm

#11

skeet50: Deal Addict; Jan 15, 2017; 3641 posts; 3007 upvotes

Oct 2nd, 2020 10:44 pm

Where are you located in BC? We sold a property last year on Vancouver Island and we didn't pay that much in fees.

Here is a link to a template that you can review as a starting point: https://www.abbotsfordnotary.com/docs/C ... e_Only.pdf

Oct 3rd, 2020 1:07 am

#12

sushi604: Member; Feb 7, 2019; 204 posts; 114 upvotes

Oct 3rd, 2020 1:07 am

desertfox wrote: ↑ I contacted a notary public and ask for a quotation and suggested to download purchase agreement form online signed both parties and bring it to them as they quoted me about $1,000 plus taxes if they draft a document too. What's the difference between using a notary public and real estate lawyer?

A real estate lawyer can give you legal advice but the notary public can’t. If it was me, I wouldn’t go to a notary public just to save a few bucks if I am buying a property.

Oct 3rd, 2020 1:19 am

#13

mrct1944: Member; May 28, 2012; 361 posts; 298 upvotes; ONT

Oct 3rd, 2020 1:19 am

trebmember wrote: ↑ $1000 plus HST to draft an approx 6-7 page document (not including representation nor any of the other docs)...wonder why that's higher than his actual fee to close on the property

You got it backwards, it was $1,000 for the sale agreement and another $1,250- for everything else to close on the property.

Oct 3rd, 2020 1:27 am

#14

trebmember: Jr. Member; Jun 3, 2019; 173 posts; 139 upvotes; GTA

Oct 3rd, 2020 1:27 am

mrct1944 wrote: ↑ You got it backwards, it was $1,000 for the sale agreement and another $1,250- for everything else to close on the property.

OP said $1250 for legal fees, title search, registration, couriers and expenses etc. The legal fees (lawyers expertise) should come to less than $1000.

Realtor® & Mortgage Agent

Oct 3rd, 2020 10:55 am

#15

dirtmover: Deal Addict; Nov 2, 2005; 4219 posts; 1472 upvotes; WFH

Oct 3rd, 2020 10:55 am

trebmember wrote: ↑ $1000 plus HST to draft an approx 6-7 page document (not including representation nor any of the other docs)...wonder why that's higher than his actual fee to close on the property

Not even that, he's basically filling in a template which takes 20 minutes tops. $1000 is crazy, it's ~2-3 hours work at a typical hourly rate.

OP, you do realize fees are negotiable? If yo do hand over $1K for the purchase agreement I'd try and negotiate a decent discount on the legal fees for the actual transaction The other option is to DIY and get your lawyer to review but expect to pay for that as well.

Oct 7th, 2020 4:06 am

#16

desertfox [OP]: Sr. Member; Oct 31, 2009; 571 posts; 103 upvotes

Oct 7th, 2020 4:06 am

skeet50 wrote: ↑ Where are you located in BC? We sold a property last year on Vancouver Island and we didn't pay that much in fees.

Here is a link to a template that you can review as a starting point: https://www.abbotsfordnotary.com/docs/C ... e_Only.pdf

Currently living in Tri-cities. Thanks for the link and that was exactly same template I used before you posted and sent to the sellers. Eventually they decided to have it reviewed by a notary public and waiting to hear from them. This was what I suggested to them in the first place if it's ok for them if we use the sample template online. This would eventually will not cost us anymore to draft the purchase of sale agreement if they have it reviewed and make revisions on the contract. As of today, I'm still waiting to hear from them.

Oct 7th, 2020 11:54 pm

#17

negotiater: Member; Oct 26, 2007; 304 posts; 179 upvotes

Oct 7th, 2020 11:54 pm

You should not need a purchase agreement just to be approved for rate. What happens if you pay for & sign an agreement and then find out mortgage is not approved for some other reason. Probably best to get pre-approved before getting lawyer involved.

Oct 8th, 2020 3:59 pm

#18

mt251992: Newbie; May 7, 2019; 21 posts; 28 upvotes

Oct 8th, 2020 3:59 pm

I didnt read this entire forum - but i buy privately all the time (about 7-8 a year). if you want i can draft the PSA for your private transaction, probably take me about an hour max, so $150 should cut it. pm me if you need help still!

Oct 21st, 2020 1:43 am

#19

desertfox [OP]: Sr. Member; Oct 31, 2009; 571 posts; 103 upvotes

Oct 21st, 2020 1:43 am

Apologies I have not updated for a while. The deal was off. The seller hold off selling the property. It was an investment property that we were trying to buy. It has renters both up and down and by her accounts has good current tenants and paying on time. She was the one initially who was offering to us as she was trying to dispose slowly her rental properties as she is now retired.

Oh! well, we have move on and looking for the right property.

Oct 21st, 2020 3:21 am

#20

fogetmylogin: Deal Addict; Nov 13, 2013; 2368 posts; 1155 upvotes; Ottawa

Oct 21st, 2020 3:21 am

dirtmover wrote: ↑ Not even that, he's basically filling in a template which takes 20 minutes tops. $1000 is crazy, it's ~2-3 hours work at a typical hourly rate.

OP, you do realize fees are negotiable? If yo do hand over $1K for the purchase agreement I'd try and negotiate a decent discount on the legal fees for the actual transaction The other option is to DIY and get your lawyer to review but expect to pay for that as well.

Honestly go with a Realtor. These FSBO are seldom deals and benefit mostly the seller for the most part. When I sold a property private sale we used the standard Ontario form. Used a lawyer only for closing which was only slightly more expensive then when you do the transaction with a Realtor.