Quick Answer
When buying directly from a homeowner, verify ownership through a title search, use clear written contracts, identify all individuals or entities that must sign to transfer ownership, investigate existing liens and mortgages, and do not assume the person negotiating has complete authority to sell.
Direct-from-homeowner purchases can offer investors good deals, but they require careful due diligence because there is no agent or listing infrastructure providing standard checks.
Ask Early
When negotiating directly with a homeowner, ask early about who is on title. If the homeowner is married, both spouses may need to sign. If the homeowner inherited the property, confirm the estate was properly administered. If the homeowner is divorcing, confirm the divorce decree has been entered and the title reflects the current ownership. If the property is in a trust, confirm the trust document and trustee authority.
For help with early property research, consider a Property DNA Report. Property DNA is an informational resource and does not replace a professional title search, commitment, examination, or legal opinion.
Direct Transactions Deserve Professional Closing Infrastructure
A direct transaction between an investor and a homeowner still benefits from professional closing infrastructure. Opening title with a qualified title company provides neutral oversight, proper documentation, and protection for both parties. For a checklist of what to provide, read what investors should send to title when opening an order.