If you’re wondering whether you will need a Realtor to buy a home, the brief answer is no. You might be hesitating to work with one because you don’t wish to get saddled with Realtor fees, but typically, buyers don’t pay a real estate broker’s commission — vendors do. The fact is, many home buyers use a Realtor to help direct them during the procedure, so before deciding whether or not to utilize one when you purchase a house, consider the pros and cons.
Reasons to Purchase a House with a Realtor’s help
Real estate agents (some of whom are Realtors, members of the National Association of Realtors, or NAR) are accredited professionals who work for your benefit and advocate for the interests. Typically, sellers possess a realtor working for them — a listing or seller’s broker — so you’ll need someone on your side, a buyer’s agent, who also has your back in negotiations and will be able to help you understand how to create an offer on a home.
Why some buyers pass working with a Realtor
Even though the majority of homebuyers work with a Realtor — only 12 percent of homebuyers failed to in 2020, the NAR reports — buying a home without one can be a feasible solution for some, especially if you’re familiar with the property.
In fact, not working with a buyer’s representative on “an intra-family transaction is fairly common,” according to Pamela Linskey, lawyer and founder of Linskey Law LLC, specializing in real estate, estate planning, and probate in Massachusetts.
Most buyers contemplating not working with a broker are looking to save money — a goal that can be marginal given how Realtor commissions are generally structured. The commission is generally about 5 percent to 6% of the home’s purchase price and is split between the listing agent and buyer’s agent. Frequently, sellers build this fee into the price of their home.
Buying a House without help from an Agent
If you’ve carefully considered the drawbacks and opt to move forward in the home buying process without a Realtor, here is how to make it happen and what to expect at the final.
1. Negotiate with the listing agent
As the buyer, you might have the ability to negotiate the purchase price of this house with the listing agent since you’re saving the vendor from having to pay your agent’s commission. Even though the seller pays the commission, the buyer’s agent’s commission is often baked into the buy price — but, if there’s no purchaser’s broker, then the seller might have the ability to knock that commission off the cost.
Negotiating on a home purchase, of course, takes skill, but in the event, the seller lowers the cost to reflect the dearth of agent charges, that usually means a smaller mortgage and reduced monthly payments for you.
2. Review the final disclosure and ask questions
The final disclosure is a significant document that includes information regarding the terms of your mortgage and closing prices. Be certain to read this document carefully and compare everything to your initial loan quote from the lender. If you notice any discrepancies, now is the opportunity to ask questions. Take special note of the interest rate, several obligations, whether there is a prepayment penalty and any substantial modifications to closing costs.
It could also be wise to submit a petition for closing bills to be sent on closing day. This will show that each vendor’s outstanding bills, such as utilities, have been paid.
3. Have an expert review the paperwork
At a minimum, hire a real estate lawyer early on to examine the purchase agreement and closing documents. Purchasing a home is a huge purchase, and the files can be complex to browse and understand. An experienced lawyer will have the ability to counsel you and also have language incorporated into the sale and purchase agreement to secure your interests.
Recall that issues can come up at any moment at the sale, as well, therefore a real estate lawyer can be a source and ally during the process.
“Forget waiting until the closing to get a lawyer,” Linskey states.
4. Sign all of the files and get the keys
In the final, plan to pay one or two hours viewing and signing two sets of multiple files. 1 set includes the arrangement between you and your mortgage creditor, and the other set contains the agreement between you and the vendor Take your time and read everything (and, if possible, have your attorney present). You don’t wish to include your signature on a legal document that you don’t know.
There are a whole lot of moving parts that go into purchasing a house, and working with a Realtor can save you money and time and stave off possible headaches. If you’re concerned about being able to afford a Realtor’s commission, then know that the purchaser’s agent’s fees are typically paid for by the seller, not the purchaser — although it’s often worked into the list price of the house, so the buyer is technically”paying” it, anyway.
Nevertheless, most homebuyers partner with a Realtor. People of us who don’t tend to be seasoned buyers or are familiar with the home they are seeking to purchase. If you’ve decided to purchase a home without a Realtor, it’s ideal to hire a real estate attorney to help lead you through the complex parts of the transaction.