Comparable homes that were recently sold, known in real estate as comps, are how real estate agents get a feel for the realistic price for a home. How long homes were on the market and whether homes are selling for above or below list price will help you gauge the level of competition in the area, which in turn will help you decide when and how high/low to make your first offer.
You might think it is easy enough to find a home online without the help of an agent. But an agent will lead the search, quickly finding available homes that pop up during the day and helping you discern which ones are best to tour.
You might be looking for a home in a town you grew up in or have lived for many years, where your knowledge can be a valuable asset. But real estate agents who specialize in a particular area might have even more expertise than you, especially if you start looking at homes in communities and neighborhoods with which you are less familiar.
A purchase contract, for example, should include precisely worded contingencies that address whether you can withdraw from a purchase if certain problems turn up during a home inspection and whether you can move the closing date back if you have problems selling your current home.
Buying a house without an agent can potentially save you several thousand dollars. You may already know how the homebuying process works. Or you may know someone with real estate expertise who has committed to offering free services. In these scenarios and others, you may not need an agent to help you accomplish your homebuying goals.
Finding a lender that is trustworthy and easy to work with is the first step in the homebuying process. Your lender will tell you how much you could be preapproved to borrow based on your credit score, income, liabilities, and assets.
Depending on your state, the state of the property, or the date the property was built, you may want to request additional disclosures such as a Lead-Based Paint Disclosure for older homes. Sellers are legally required to inform buyers of any known lead-based paint in a home and its location.
The earnest money deposit will be applied to the purchase price of the home at closing, but if the buyer decides to back out of the sale after all contingencies have been released, the earnest money may not be refunded.
Without an agent, you will need to do all comparable sales research yourself. You will need to consider what homes in the area are selling for, if the market is especially hot, and how many other offers are being submitted for this particular home before you decide on offering higher or lower than the asking price.
While this strategy can give your offer an edge, it also opens you up to buying a home with unknown issues that could cost you both time and money down the road. Even if you decide to waive the inspection contingency, you should still have the home inspected so you will know exactly what is wrong with the home and can create a plan.
If this is your first home, you may need to do some research to find the best company for you. Be sure to compare coverages, premium costs, and deductibles as you look at quotes. Without an agent, you can rely on your network of friends and family to get their recommendations, or your lender might be able to recommend a reputable company.
Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible.
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Negotiating on a home purchase, of course, takes skill. But if the seller lowers the purchase price to reflect the lack of agent fees, that means a smaller mortgage and lower monthly payments for you.
At the very least, hire a real estate attorney early on to review the purchase agreement and closing documents. Buying a home is a large commitment, and the documents can be complicated. An experienced lawyer will be able to advise you and have language incorporated into the purchase and sale agreement to protect your interests.
The key point here is that home buyers can get professional representation without having to pay for it directly. This should be a major consideration for anyone thinking about buying a home in California without a real estate agent.
Real estate agents are professionals who work on your behalf and advocate for your interests. In most cases, sellers have a real estate agent working for them so you want someone on your side who has your back in negotiations and can help you understand the complex lingo in contracts, for example.
Buying a home without the guidance of a real estate agent might make sense if you have a strong handle on how the process works and confidence in your ability to navigate the deal on your own. Here are some common reasons for buying a house without a Realtor:
From a transactional standpoint, there exists some modest crossover between attorneys and real estate agents. One clear difference is that an attorney is licensed by the state to provide legal advice to a prospective buyer. Comparatively, real estate brokers are limited to advising clients on narrow legal concerns related closely to the real estate transaction and its ancillary processes. For example, a real estate agent may be able to walk-through a purchase and sale agreement with their clients, and answer basic questions about its terms. However, if a legal question arises outside the scope of that agreement, (such as a concern about the implications of an easement on the property or homeowners association issues), the agent is obligated to recommend that the client seek advice from an attorney.
How the parties are compensated is another significant difference. Real estate agents typically work on commission, which can range from 5% to 6%, and is shared (usually equally) with the corresponding agent on the other side of the transaction. Attorneys who facilitate real estate transactions are not paid by commission, but rather, via hourly billing. While it is true, that attorneys are technically paid regardless of whether the transaction ultimately proves successful, the amount they receive is typically a fraction of what a typical agent would receive via commission.
Depending on the prospective buyer, utilizing an attorney to purchase a home is not always ideal. Attorneys are excellent at facilitating the transaction by drafting the necessary documentation and helping explain to the client the various legalities associated with it. BUT, they are not designed to directly assist the client with sales-related activities such as viewing the home or interpreting housing market trends. If you need that sort of assistance, then perhaps a real estate agent would be better-suited to assist you. However, given that the vast majority of information needed to make a well-informed purchase is located on the internet, use of a real estate agent is likely optional.
Once a buyer finds a home he likes, an offer is extended to the seller. This offer is created in the form of a residential purchase and sale agreement and contains the core terms of the proposed agreement. These terms include the price and length of closing (usually about 30 days). In addition to the main terms of the agreement, parties often included certain contingencies (in the form of addenda) that must be satisfied for the transaction to successfully close.
In the legal world, there is often a division of practice emphasis between litigation (fighting in court) and transactional work. Attorneys who assist with transactions are typically responsible for preparing the necessary documentation to facilitate the transaction, but also, they serve to simply guiding the process through to completion. In the context of buying a home, a real estate attorney will usually follow the following procedure:
First, the attorney will often have an in person or telephonic discussion with the prospective client. This first steps is designed to outline what is needed from the client to assist in the purchase of a home. If a property has already been selected, an attorney will likely want to know from the buyer who the parties are, what the address is of the property to be sold, the purchase price, and any specific conditions that should be included in a purchase and sale agreement.
If you are wondering whether you should buy a home without a Realtor, the answer is NO! From thirty-seven years of experience, you would be giving up many significant benefits without having an agent.
It is unlikely that preceding working with a Realtor will save you any money. If a buyer goes directly to the listing agent, it does not mean the agent only makes half a commission. The seller is obligated to pay the agent the full commission.
If a real estate agent knows about some problem with a home, it must be disclosed! There are few instances where a real estate agent can avoid disclosing a condition that would make a buyer think twice about purchasing a home.
Think about what happens when you have nowhere to go because the home you buy will fall apart due to an appraisal. This is one of the significant risks of purchasing a home without a real estate agent in your corner to protect your interests. 59ce067264