Buying A House Without A Realtor (in Alabama)

I recently purchased a house in Madison, Alabama, that was For Sale By Owner. I had never bought property in Alabama before. The transaction went smoothly. Here is how I chose to do it:

Make an offer

After looking at the property several times, I emailed the seller and made him an informal offer (I had found the property via Craigslist.com, and never actually spoke to the seller in person until the day of closing, just text and email). My email said something like this: “Would you take $___,000?”

Write up an agreement

The seller emailed me back, and said something like, “That sounds fair, I'll do it.” At this point, we needed to put it down in writing. I found a Purchase and Sale Agreement template online, and filled in the details of our agreement, such as property address, selling price, buyers name, sellers name, etc... I then printed the agreement, signed it, scanned it, and emailed it to the seller. The seller signed it, and emailed it back to me. Here is an example of a blank Purchase and Sale Agreement.
Blank Purchase and Sale

Closing / Record the Deed

I decided to have a real estate attorney do the closing. The real estate attorney acted as a mediator between myself and the seller. I deposited the money to purchase the house in the attorneys escrow account, and he cut a check to the seller at closing. He also provided title insurance, prepared all of the necessary paperwork, and filed the deed. The attorneys fees were very reasonable, only a few hundred dollars in total. Taxes and title insurance were also paid at closing.

*Note: It is common in Alabama to use real estate attorneys for closings, but some other states use title agencies (or title companies), which prepare and record paperwork, provide title insurance, and hold money in escrow accounts for closings. Also, it is possible to cut out the 'mediator' all together and just do your own research, prepare you own paperwork, and record your own deed at the court house.

Disclaimer: The above article is just my personal story of buying a property. I am not qualified to nor am I trying to provide legal advice.

Fix and Flip – 3 Tips on How to Buy Right

I have been fortunate enough in my life to have done a hand full of successful fix-and-flip real estate investments. As a matter of fact, I am in the beginning stages of a fix-and-flip project right now, with a house in Madison, AL. Here are three tips that I use to find great properties that can turn a profit.

Always Be On The Lookout

Always watching the market is important, but not for the reason you might think. Many believe that you have to be quick, or the good deals will get snatched up by someone else, thus you need to always watch and be the first to jump on the good ones. This has not been my experience, in fact, some of the best fix-and-flips I have done were properties that had sat on the market for the better park of a year, before I took an interest in them and ultimately bought them.

The reason I like to be on the constant lookout (even when I am not in a position to buy) is because it helps me get a feel for the local market. It puts whatever I am considering as an investment into perspective, because I know roughly what I could buy for the same price in that same.

Don't pay too much / Don't get attached

The key to not paying too much when negotiated a price is this: Don't get attached. Don't get tunnel vision and trick yourself into thinking, 'this is the one and only best deal of all time'. Great deals on real estate come and go. There will always be another one, so make an offer, stand your ground, and don't be afraid to walk away. If you use this technique consistently, you will find yourself able to buy property for less than you've imagined, and you will know you got a great price.

Make a plan

If you fail to plan, you plan to fail. Before you can think seriously about making an offer on an investment property, you need to have a start to finish plan. This plan should include financing, repair costs, taxes, fees, time frames, etc, and should account for as many unforeseen circumstances as you can imagine. You also want a well thought out exit strategy, which is how you plan to get your money out of the investment. I personally don't like to buy any property that I am not willing to live in, for the rest of my life, if things go south.

Closing Thought

So those are my 3 tips for this post. I hope it helps. Just remember, buying real estate is usually the biggest type of purchases you will make, so unless you have cash to burn, don't make it a casual discussion. The money you will save by taking your time, doing good research, and using your head is something most people can't afford to lose.

Buying Houses That Are Not For Sale: Just Ask.

A great way to get a smoking deal on a fixer upper property is to buy one that is not listed for sale! Often times people are willing to part with properties (or old cars / trucks etc...) but they never get around to actually listing them for sale.

There was an old house that had sat vacant for several years near the town where I grew up, in Idaho. When I was 21, I decided I wanted to buy it, so I went to the court house with the address to find out who the owner was (its public record). I called the owner, and asked if he would sell it, for... I think I offered $6000 or $8000. He countered at $10,000 and I bought it, and fixed it up. He told me he had inherited it from his family, and was just going to tear it down but was always too busy. Below is a before, during, and after shot of that house.

Needless to say, this method of buying things doesn't always work. I've been told told flat out NO plenty of times, although people are usually nice about it. Sometimes the owner will say, yes but... and then you find out a reason why they cant sell it, like, it has a lien on it, or its owned by multiple family members who don’t get along, etc.. , but even those cases can be good, because when they do become ready to sell, they just might come to you first.

Finding Fix and Flip Properties: Where to Look

A sure way to get a great deal on an investment property is to always be on the lookout. Here are the main sources that I use to find out about available properties for sale:

Craigslist.com

Craigslist is potentially the best place to find great deals on real estate, since many of the listing are 'For Sale By Owner' and it has such a large user base. To search craigslist for properties, simple go to craigslist.com, select your state and area, and click on 'real estate for sale' under the housing section. You can search by price, by number of bedrooms/bathroom, and/or by keywords like 'fixer' 'must sell' 'reduced' etc...

• craigslist.com

Realtor.com

Trulia.com

and Zillow.com

It used to be that only Realtors could search for houses on the MLS (Multiple Listing Service). These days, anyone with the internet can do it, although some of the information is kept private, such as the sellers name and phone number, etc...
Realtor.com and Trulia.com both pull their listings from the MLS, and allow you to create customized searches to help you narrow down the search.

• realtor.com
• trulia.com
• zillow.com

LandAndFarm.com

This is a great site I stumbled upon several year back. I'm found it particularly useful for finding cheap homes with lots of acreage, or just cheap acreage without homes. It also features map searches and customizable searches. The properties for sale are a mix of both Realtor listings and 'for sale by owners'

• landandfarm.com

One more thought

There is another way to find great properties at great prices, without even using the internet of checking the classified ads. Check out this short article for more info: Buying Houses That Are Not For Sale: Just Ask.