Looking for a house to buy is an ordeal. Even if you already have an idea of exactly what you want and are pretty sure you have the budget for it—it’s still a big deal. Literally. Yet, despite the vastness of the undertaking, you may still look into buying a home without a realtor. Here’s how to do just that.
Reasons Not to Buy with A Realtor
There are several reasons why you may not choose to work with a real estate agent. For example:
Save on Commission
Many people believe they can save thousands of dollars by not working with a realtor. This is only true if you have great negotiation skills and the seller is willing to give you a break for not paying an extra commission fee.
Although, some listing agents design their contract in such a way that they receive a larger commission if the home buyer doesn’t use an agent. In instances like that, the seller does not save money and probably wouldn’t be interested in giving you more, either.
Beyond that, there are other ways to save on commission while still getting great real estate service.
Less of a Hassle
Working with a real estate agent is a hassle, right? Instead of just looking at a calendar and deciding what time works best for you to tour your house, you’ve got to coordinate your schedule, your agent’s schedule, and the seller’s schedule.
Before you cut out that extra step, though, remember what that “hassle” is actually worth as they help you locate great properties with their access to other agents, the MLS, and local knowledge, and how their top-notch negotiation skills can help you save money. It may not be enough for you, but don’t discount the pros when weighing the cons.
Buying a For Sale By Owner
Not wanting to spook a seller, many buyers go into FSBO deals without a real estate agent. This is great news—if you’re the seller. Not using an agent in a FSBO deal could just be the recipe for disaster that you end up paying for the rest of your loan term.
Because you both may lack in-depth real estate knowledge, the seller could have you pay most or all of the closing costs without you even knowing there was another option. They may even negotiate you out of a home inspection contingency, meaning if anything is wrong with the house—you’re still stuck buying it or paying the consequences.
Beyond that, the seller is legally bound to disclose certain things to the buyer (known as seller disclosures) but neither of you may know exactly what is required.
At the very least, look for a real estate attorney as you find a home. They’ll help you protect your interests whether or not the seller uses a real estate agent.
What does a realtor actually do?
Many people think not using a real estate agent to purchase a house is like heading through the self-checkout at the grocery store. It is not. It’s more like creating your grocery list and having the manager of the store go shopping for you.
A real estate agent (or realtor, if they’ve signed up, passed the test, and paid the fee with the National Association of Realtors) is an expert not only in the area you are buying in, they also spend day in and day out working on real estate, which means they know what you’re looking for when you mention things like “a quiet neighborhood” or “homes for sale with an open floor plan.” In fact, they’ll also know things like the Spring fair is two blocks away from the house you are looking to buy, which means for three weeks every Spring, you’ll have stranger’s cars lining the street and blocking your driveway.
Real Estate Contracts
Beyond insider knowledge, real estate agents are also well-versed in real estate contracts. While you could hire a lawyer for around $500 to wrap up the contract for you, your real estate agent knows what contingencies you need.
Waste Less Time
They also have a basic understanding of what to look for in the house on the initial visit. For example, you may not notice that the floor sinks to one side during the walkthrough, but your real estate agent sure does. They’ll point it out and even give you a rough estimate of how much it’ll cost to replace it.
Recommendations and Extra Help
Finally, a buyer’s agent helps in closing the deal by sending you to a lender that is known for their great rates and closing times, uses their negotiation skills to help score you a new roof without raising your offer price, and helps to point you in the right direction of a quality inspector. They’ll also walk you through extra costs such as title insurance and closing costs.
Doesn’t it cost more to use a real estate agent to buy a house?
Many people forgo a buyer’s agent to give them a little wiggle room when buying a house. The problem with this is many listing agents sign an exclusive agreement with the seller, meaning they’ll get the entire commission if you don’t use a buyer’s agent.
Beyond that, you could end up spending more money because it’s in the listing agent’s best interest to negotiate in the seller’s favor. Ultimately, it comes down to this:
- You pay the seller for the house
- They use that money to pay the real estate commission
It doesn’t really cost you anything extra.
But it could pay you instead.
How can I make money by using a buyer’s agent?
Using a flat fee real estate agent could help you actually make money on the purchase of your house. That’s because flat fee agents like those at Clever Real Estate provide top-notch service—and a buyer’s rebate for you in the states that allow it.
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