Most people start shopping for houses online when they’re ready to buy. Then they start looking for a mortgage lender and a realtor. Then they start to question how much help they’re really going to need along the way.
Buying a house without a realtor: When it works
As a first-time homebuyer, it’s certainly possible to buy a new house without the help of a real estate agent. After all, you have almost limitless real estate tools and legal information at your fingertips.
But is it a good idea? Many first-time buyers consider skipping the middleman to save on the estimated 5 percent commission paid out on the sales price of a house. (Please note that according to the legal website Nolo, this commission is split between both the buyer’s and the seller’s agents.)
Where can you find a mortgage lender that cares about your homebuying experience? Cornerstone’s lending in 40 states.
This is where things can get tricky. Though it’s well within your legal rights to buy any house you please without a real estate agent, there’s still the commission factor to consider. If you choose to buy without an agent, it’s possible that a seller’s agent may pocket that extra commission anyway. A large number of real estate agents denote variable commissions in their contracts with clients. A variable commission means that a seller’s agent could get the leftover commission that would have gone to a buyer’s agent.
Even if you opt-out of using a realtor, you may still have to pay for outside help. Signing multiple legal contracts to make a major financial purchase — in this case, buying a house — is risky without some type of legal guidance.
Buying a house without a realtor: When it fails
In almost all scenarios, we recommend working with a trusted realtor when buying a house. Especially if you’re a first-time buyer. As a mortgage lender that’s been in the business for more than 29 years, we’ve seen these pitfalls firsthand.
When you’re working with the right people, getting prequalified for a mortgage can be easy. And you can do it online.
Here are some of the most common problems that can occur when you try to buy a house without a realtor:
There’s a language barrier.
Real estate jargon is not for the faint of heart. Many times, a simple Google search may not be enough to translate the legalese on the housing contract you have in your hand. An experienced realtor can interpret, guide, and help.
A realtor who’s fluent in “real estate speak” can pay off in more ways than one. Kathryn Bishop, realtor at Keller Williams Realty in California, explains that a great realtor knows how to write a seller’s promotional material that features a home to attract buyers. When using a realtor to buy a house, a knowledgeable realtor can help you break down the language used in a listing to determine if a home is the right fit.
You don’t like what you see.
There are literally thousands of homes listed for sale online, but your realtor may do you one better. Simply put, using a realtor gives you access to more homes and media outlets than if you go it alone, Reese Phillips, realtor at Berkshire Hathaway HomeServices in Georgia, confirms. Oftentimes, a real estate agent can provide you with listings that aren’t being actively advertised.
You get steamrolled.
A successful real estate deal is all about the art of negotiation. It may look like you’re saving money off the top by forgoing a commission, only to pay more for a house because of a gridlocked price. The negotiating table is where you’ll see a realtor’s commission as money well spent.
Bishop says that she regularly negotiates on behalf of her clients to get them the best terms and most competitive price. “A good realtor knows how to solve problems that crop up, whether it’s a financing issue, a title issue, or an emergency home repair,” Bishop adds.
You don’t know who to call.
A realtor who’s well-connected in the community is worth their weight in gold.
“A realtor is in touch with other people in the industry and will act as the hub for communications to those people — closing attorneys, title companies, surveyors, professional stagers, contractors, insurance agents, etc.” Phillips explains. A trustworthy realtor, Phillips says, can be a one-stop shop and cut down on a lot of time and energy that you as a buyer may not have to spare.
You need someone to supervise.
A licensed buyer’s agent is often required to be present at your home inspection and appraisal. If you’re not using a realtor, the seller’s agent may be willing to help — and may charge for their services.
Having a realtor with you in an unfamiliar home can also ensure your personal safety. Using a realtor offers layers of protection for a family and especially for a single woman when buying, Amy Kilcoyne, realtor at Keller Williams Realty in Florida, says. As a practice, realtors are trained to pre-qualify people before they come in to a home, Kilcoyne explains. A realtor can screen any outside people, like appraisers and inspectors, before they meet you at a property.
You don’t know what to do next.
Did we mention that the sheer volume of real estate paperwork can be intimidating? It’s your realtor’s job to keep track of your documents and walk you through each step of the homebuying process.
Don’t forget: You can also use our free LoanFly app to access your loan documents and cut down on piles of paperwork.
Phillips also reminds us that realtors buy and sell houses for a living. Without the representation of a real estate agent, you’ll have to drastically alter your schedule to accommodate a seller’s requests and other needs at closing. Or, Phillips says, “You can let an agent do his/her job while you continue your daily life and prepare to move to your new home!”
The way we see it, having a good realtor and a good mortgage lender by your side makes it that much easier to get into the right house. Let us help you put together your winning team: We’ll start by getting you prequalified for a mortgage so you know how much house you can afford. After that, we’ll recommend a realtor we’ve successfully worked with in the past.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.