If you’re considering buying a house without a realtor, then check out these pros and cons before you decide if it’s the right choice for you.
We’re now living in a time when there are more people who rent than own a home since 1967. Some people choose to rent because they don’t want to be tied down.
Others don’t want the hassles of maintaining their property. But many erroneously believe that they can’t afford it. Turns out, in the long run, they would save more money by buying a home.
If money is a concern, it’s worth considering working without a realtor. However, cost shouldn’t be your only concern when buying a home.
Here’s what you need to know to make a decision on whether you should consider buying a house without a realtor.
Buying A House Without a Realtor Facts & Fiction
There are a few myths flying around that make some people feel as though buying a home without a realtor isn’t a possibility. It is, but be prepared to do a lot of work.
Some people feel as though they won’t be taken seriously as a buyer if they are buying a home without a without an agent. That’s not entirely true.
While some sellers may prefer to work only with people who use a professional realtor, others might actually welcome the chance to cut out the middle person in the transaction.
Also, many buyers believe that if they make an offer without an agent that the seller’s agent will just keep the extra commission. Unfortunately, if you’re not careful, this can happen.
It’s common for listing agents to have contracts with their clients that contain variable commissions. Often that means that if the buyer isn’t using an agent, the listing agent automatically gets the leftover commission.
Apply For A Mortgage
Not everyone needs a mortgage to buy a home, but most will.
And whether you’re buying a home without an agent or with one, you’ll still need to apply for a mortgage. It’s an important step because it lets you know what your budget is for home buying. But there’s a lot of paperwork involved.
To make it easier on yourself, gather up all pertinent papers as your first step. Then do some research to find the best place to get a good deal on a mortgage.
Check Your Credit Score
Your credit score is definitely going to come into consideration when you’re applying for a mortgage.
Check your credit score. If there are any errors, take the appropriate steps to clear them up immediately. If there are some red flags but they aren’t from errors, do what you can to improve your score as soon as possible.
Putting yourself on a budget and taking steps to lower your current debt will go a long way towards helping you buy the home of your dreams.
Research Where Homes Are For Sale
Figuring out where the homes are for sale is the hardest part of buying a home without an agent.
Real estate agents have access to a great network that enables them to know where all the best houses are. They can use their system to narrow down your search and help you find a home quickly.
When you’re buying without a realtor, there’s a lot more work for you to do.
Where To Find Your Dream Home
To start your search, try looking at real estate magazines. However, if you’re not working with a realtor, you can only use the magazines to find homes for sale by owner listings (FSBO).
An easier search is to go online and search classified ad sites like Craigslist. You can also take a look at other online real estate websites to find out where homes for sale are listed.
Sites like Trulia.com and Zillow.com maintain a database of homes in the United States. You can even perform searches based on parameters such as location, price range, and even layout.
For homes in outside the US, try searching sites like Fab Property Spain.
Check local newspapers to find homes listed. Look in both the classifieds and real estate sections.
Take a drive through the neighborhoods you are interested in buying. Look to see if there are any FSBO signs which list the seller’s numbers on them.
You can also spread the word to friends and family both orally and on social media that you’re looking for a house.
Contact The Homeowners To See the House
Once you find a home you’d like to view, it’s time to contact the owners.
Before you go all the way over to their home to view it, take the time to ask the seller’s a few questions. It will save you some time.
If you have kids, some questions to ask are about the schools and whether or not there are other kids in the neighborhood.
Also, ask about the current condition of the home. Then ask about any repairs made on the home. Ask the seller’s what is included in the sale of their home.
You can also ask about noise levels, problem neighbors, and if they’re willing to let you make an offer on their house if you’re not using a realtor.
How Using A Realtor Saves Time
If you’re extremely busy, then consider hiring a real estate agent.
They can take the time to schedule when it’s good to see the home. They’ll also have the answers to many of the questions you have about the home.
Also, the realtor might have access to additional photos of the home so you can view it without actually stopping by the home until you find one you truly love.
Determine Whether The House Is Worth The Asking Price
Once you’ve selected a home that you love, it’s time to learn how to make an offer on a house without a realtor.
Here are a few ways to evaluate a home’s value without using a realtor.
Hire an appraiser to evaluate the property. While it will cost you some money, the appraiser will perform a thorough assessment of the home.
She or he will also provide you with the required documentation your mortgage lender needs before you can purchase the home.
You can also turn to the internet. Ther are home value tools which have you input the home’s specifics in order to obtain a likely estimate of the home’s worth.
You’ll find quite a few free home value calculators available online.
Try doing a CMA (comparative market analysis). The CMA takes the structure of the home, the property it’s on, and the neighborhood the home is located into account in order to provide an accurate figure of the home’s current value.
You can perform a CMA yourself for free on websites like RedFin.com.
Hire A Real Estate Attorney
Whether you are buying a home with or without an agent, you will still need to hire a real estate attorney.
A real estate attorney will handle all the necessary paperwork to ensure the final sale of the home. When you’re buying a home, the seller enters into a brokerage contract with a real estate attorney.
They handle the transferring home’s title and property from the seller to the buyer. While it may seem simple, trying to buy a home without using a real estate attorney using means.
In the typical home purchase, the seller enters into a brokerage contract with a real estate attorney.
Their job is the process the paperwork and then transfer the title and property from the seller to the buyer.
It is never a good idea to try to sell or buy a home without using a real estate attorney. There are too many possible problems that can arise due to sheer ignorance on the part of both the seller and the buyer.
Make An Offer
Once you’ve found the home of your dreams, it’s time to make an offer.
The amount you offer the sellers may be more or less than their asking price. Much of it is determined by the current condition of the home and how sought after the property is.
If the home was recently put on the market, there is usually more than one buyer interested in making a purchase. If you have competition, be prepared to up your offer.
But there are also times when the seller is asking for more than what you feel the home is worth. It’s not uncommon to put in a bid for less than the asking price based on the current condition of the home and also how long it’s been for sale for.
Your real estate attorney will draw up the terms and then present the offer to the sellers. Be prepared for the sellers to begin a negotiation rather than accepting your offer.
Draw Up A Sales Contract
Once your offer has been accepted, congratulations!
But it’s not over yet, your real estate attorney needs to draw up a sales contract which both you and the seller need to sign. Once everything has been signed and the money and title have been transferred, you are officially a homeowner.
Now it’s time to make your new house a home.
If you’re too busy, have no interest, or feel you can’t handle doing everything on your own, hire a real estate agent. Just make sure you feel comfortable with them and trust them.
But choosing DIY means that if you’re capable of buying a house without a realtor, you can pretty much do anything you want.
We’re inspired by you. We believe you’re limitless in your possibilities. But of course, you need support and ideas. That’s where we come in.
Keep reading our articles to learn how to do anything DIY.