Can I sell my home to a private investor while it is listed with a Realtor?

We have our home listed through Carpenter Realty, and our contract expires at the end of Sept. I have contacted a private investor who is interested in buying my home. His company basically takes over our existing mortgage. Can we do this and who pays the realtor fees?

You probably have an exclusive right to sell listing agreement (this is the standard contract). That means that you pay a commission whether you find a buyer or the realtor finds a buyer. Upon sale, you would owe the commission to the realtor.

Additionally I would add that it is VERY risky to allow someone else to "take over your mortgage." When they do not pay (which they will not at some point, trust me) the mortgage company is still coming after you for the balance. Additionally, if the mortgage company finds out that you entered into this agreement, the due on sale clause will be enforceable. Whether they do this or not is another matter. This is NEVER a good idea unless there is no other option.

If this is a buyer who contacted you while you are contracted with a buyer, and that buyer buys your house, then legally you owe the real estate agency a fee. That would be your sole responsibility to pay it, unless you agreed with the investor for them to pay the realtor's fee.

Some people here would try to let their contract lapse, then wait a period of time (say a month) to sell to the other party. But even so, if the real estate agent finds out about it, they can come after you up to two years later to sue you for the unpaid commission.

Takes over your existing mortgage? This sounds like subject-to financing. As I understand it this buyer wants you to deed over your home to them and in return give you a promise in the form of a contract that they will make your payments for you.

Please consider these things before you proceed.

Because you still have a mortgage it will be very difficult to buy another home.

Guess what happens when they stop making your payments? You are on the hook for the mortgage still. Your credit will take the hit when the lender forecloses on you.

Also, the mortgage company may send you a 1099 tax form for the money they lost when they sold your home. There loss would be considered your income even though you didn't get a dime. You would still be liable to pay taxes on it.

Finally, if the lender finds out about it (e.g. the lender gets a copy of the insurance policy which will probably no longer have your name on it) then they can enforce the due-on-sale clause and demand the mortgage be paid in full. This used to be unlikely but is becoming more likely because interest rates are rising.

Stick with your Realtor. They are there to protect you.