The benefits of buying a home with a realtor
So, do you need a real estate agent to buy a house? Let’s get into how an agent can help you on the road to homeownership.
- Finding your home: House hunting can get pretty tedious and real estate agents are there to do the heavy lifting on your behalf. They understand your needs and sift through countless listings to find homes that suit your budget and set up property tours.
- Knowing the market: Realtors know if homes are priced right and can provide insights into the neighborhood such as school districts and nearby amenities.
- Negotiating the price: Realtors use their experience and market knowledge to ensure you get the best deal, whether it's negotiating the price or the terms of sale.
- Handling the paperwork: Realtors handle the paperwork, crossing the T’s and dotting the I’s so you don’t have to.
- Connecting with professionals: From home inspectors to contractors, Realtors have a network of professionals who can help you before and after the home purchase.
- Closing with confidence: When it’s time to cross the finish line, your agent ensures everything goes off without a hitch so you can start the next chapter in your new home.
Can I purchase a home without an agent?
Yes, buying a home without a realtor is possible. However, you have to determine whether it makes sense for you. Can you juggle the responsibility and risks of buying a house without a realtor? Let’s weigh the pros and cons.
The pros and cons of buying without an agent
| Pros | Cons |
|---|---|
| Save Some Cash | It’s Complicated |
| You could save on commission fees, keeping more money in your pocket for housewarming goodies! | Navigating the home buying process can be a maze, especially if you're new to it. |
| You’re the Boss | Time Hog |
| Full control means making all the decisions, from which houses to view to how much to offer. | Get ready to devote a good chunk of your time to everything from scouting properties to deciphering paperwork. |
| Direct Talks | Price Pitfalls |
| Chatting directly with sellers might lead to better insights and even a sweeter deal. | Without a realtor’s market knowledge, there’s a risk you might pay more than the market rate. |
| Great Learning Experience | Legal Snags |
| You’ll learn lots about real estate, which is always handy. | A small mistake in handling legal documents can lead to big problems down the road. |
| Explore Freely | Stress Alert |
| You can check out any property that piques your interest, not just those a realtor shows you. | Handling every detail on your own can be overwhelming and stressful. |
Does buying without an agent actually save you money?
A lot of buyers assume a real estate agent will cost them, but that’s not the case. Most often, the home buyer doesn’t pay their agent’s fees—the seller does. Sellers usually pay a commission of 5-6% of the purchase price, split evenly between the listing agent and the buyer’s agent.
However, you may be able to save money by negotiating down the price. Many sellers build the cost of a realtor into the listing price, so they might accept a lower offer if they don’t have to pay a buyer’s agent fees.
How to purchase a home without a realtor
If you’ve decided to be the captain of your own home buying ship, here’s what’s in store at every step.
Step 1: Negotiate with the listing agent
Without a realtor in your corner, you'll need to negotiate directly with the listing agent. This can be tricky as the agent represents the seller's interests, not yours. You’ll have to do your homework on the local market, know the value of the home and come prepared to discuss terms with confidence.
Step 2: Review the closing disclosure and ask questions
The closing disclosure is a critical document you get once your mortgage application is approved that outlines the details of your mortgage. It’s a five-page form that includes the loan terms, your projected monthly payments and how much you will pay in fees and other costs. The form is designed to make it easy for you to understand the terms of your loan, compare costs and confirm that you're getting the deal you were promised. Review it carefully to ensure all financial details are in order and ask your lender questions about anything that isn’t crystal clear. Make sure you understand every last detail so there are no surprises later on.
Step 3: Have a professional review the paperwork
Even if you’re confident in your abilities, you’ll want a professional set of eyes to check your homework. A real estate attorney should review all contracts and legal documents to make absolutely certain you’re in good shape and your interests are protected. A small mistake in documentation could cost you in the long run, so don’t skip this step.
Step 4: Bring cashier’s checks, proof of insurance and your IDs
Come ready to close the deal with all necessary documentation, including your cashier's checks for any remaining closing costs, proof of homeowners insurance and your identification.
Step 5: Sign all the documents and get the keys
This final step is incredibly exciting and one you don’t want to rush. Carefully review and sign your mortgage and make sure you have a copy for your records. Then, you can grab the keys and officially cross the threshold from home buyer to homeowner!
