My wife and I are considering purchasing a "Buy Owner"
home without using a real estate agent. Our mortgage lender gave
us a "Residential Home Purchase Offer" form. The form,
which is typical for the state we live in, is for writing our offer
to the seller and includes all the contract stipulations. We plan
to use a FHA no-money-down loan. Should we pay a real estate lawyer
or other real estate professional to review the offer, or is it
OK to seek the advice of the mortgage lender of our choice to review
You should pay a real estate lawyer to review the offer. There are
plenty of knowledgeable people in real estate who can provide you
with information about making an offer, but if you rely on their
advice and they're wrong, then there's not much you can do about
You want someone in your corner who represents your
interests and is obligated to provide you with competent legal advice.
Even the folks at Buy Owner highly recommend that both buyer
and seller use real estate attorneys.
It's best to have your attorney review the offer before
it's presented. But if you write an offer using a standardized contract,
add a contingency rider that makes the offer subject to the contract's
review and approval by your attorney within five days of the seller's
acceptance of your offer.
Not all contingency riders are created equal. The
attorney approval contingency should be written so that an unfavorable
review by your attorney allows you to revoke the purchase offer.
Some attorney contingency riders allow the buyer's
attorney to review and approve the form of contract but not to address
the terms of the contract. Other boilerplate attorney approval contingency
riders may allow the attorney to modify the contract subject to
the seller's acceptance of the modifications, but not to approve
or reject the contract. If you want the contract to protect you,
then you need to make sure that it's written to accomplish that
The best way to have an appropriate contingency rider
is to have your real estate attorney provide you with that language
prior to making an offer.
While you're at it, make sure that the home inspection
rider gives you a real out if the home has problems that crop up
in the home inspection.
With these two contingencies in the offer, it would
be a good idea to be pre-approved for a mortgage loan. It lets the
seller know that you're able to afford the home, which gives you
negotiating leverage as the buyer, especially with a for-sale-by-owner
Remember that it's the seller who's trying to save
money by marketing the home for sale by owner. I realize that you
want to save money too, but it's more important to avoid making
a mistake in the purchase of your new home.