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Do I Need a Realtor to Buy a House?

buying a house

If you are asking yourself, “Do I need a realtor to buy a house?” then the quick answer is no. Truthfully, you do not need one. This answer may make you feel relieved, especially if you feel hesitant to work with a realtor because you do not want to fork out fees. However, keep in mind that buyers do not pay a real estate agent’s cut or commission. Instead, this fee falls on the sellers. Now that info certainly comes in handy.

When you are a homebuyer, you can purchase a home by yourself. However, most buyers still prefer using a reputable real estate agent so they can get guidance and assistance throughout the entire home buying journey. Before you decide to kick your realtor to the curb, consider the benefits and disadvantages first. Remember, buying your home is not something that you do flippantly. After all, you cannot return or exchange your home like other items. Take time to read this article so you can make an informed choice.

Common Reasons People Buy Homes With a Realtor

Real estate agents are licensed professionals. Some of them are certified realtors who belong to the NAR (National Association of Realtors). These people work on your behalf, advocating for your best interests when buying or selling a house.

Usually, sellers will have a professional real estate agent at their disposal. This listing agent will help sell the house faster due to their network and professional expertise. Meanwhile, a buyer’s agent will also come in handy since they have a knack for negotiations and understand the nuances of making an offer for a home you may be interested in buying. On top of that, a buyer’s agent can help in other aspects, too. Here are some tasks that they can help you with, giving you comfort and convenience:

1.    Find Homes That Match Preferences

A real estate agent can help you find prospective homes that meet your budget requirements and lifestyle needs. Though you can search yourself in real estate search sites, the information offered here is not extensive. On the other hand, your realtor will have data to assess whether the home’s asking price is justifiable compared to existing homes in the market.

2.    Provide Neighborhood Info

When you are buying a home, you do not only look at the property by itself. Instead, you also assess the surrounding areas because they will impact your lifestyle. Unfortunately, some sellers may not disclose information that can impact you. However, with your real estate agent’s assistance, you can readily dig up neighborhood information.

3.    Offer Badass Negotiation

If you, do it yourself, you can buy a house. But the question is, will you truly get a good deal? Since real estate is your realtor’s bread and butter, they have badass negotiation skills. Apart from getting a discount on the price, they can help you negotiate other clauses and contingencies when you close the sale.

4.    Assist With Home Inspections

As the buyer, you cannot do without a professional home inspection. This is for your protection because you want to reveal any underlying issues. For example, discovering termite infestation can affect you in the future because these are expensive to control. In addition, they can cause structural damage, which can compromise the property’s stability. With a realtor backing you up, you can negotiate repair fees and credits with the seller.

5.    Explain Complex Paperwork

Though buying your dream homes is a fun and exciting journey, it can be quite complex. You will see a lot of paperwork filled with complicated terminologies and jargon that you may have trouble understanding. However, with your real estate agent, you can save your time and energy with their quick and efficient explanations.

6.    Request and Evaluate Seller Disclosures

Typically, home buyers do not know what to ask for. Remember, in most states, they require sellers to disclose certain information. If you work with a realtor, you’ve got all your bases covered, so you can feel assured that you are truly getting a great deal on your house.

Remember, if you are a first-time home buyer, the home buying journey can be overwhelming. Even second or third-time buyers find the process complex. It is better to work with a professional because legal repercussions and complex terms can confuse you if you are not well-versed in this industry.

Frequent Explanations Why Some Buyers Opt to Work Without a Realtor

Although most homebuyers work with a realtor, you can still find several people who opt to do it alone. Last year, the NAR reported that 12% of homebuyers opted to work without one. Going solo is a viable option, especially if you are familiar with the real estate industry or know the property well. Here are some possible reasons why people opt to work without one:

1.    Dealing with Personal Transactions

Some say that not working with a buyer’s agent because you are doing a transaction with a family member or friend is a common deal. Those who do this intra-family or personal transaction feel confident enough to do it without a buyer and seller’s agent. The cost in savings works out well to their advantage.

2.    Saving Money

Another common reason for not working with an agent is saving money. However, if you are a buyer, this is a bit misguided because realtor commissions follow a specific structure. Usually, the commission is around 6% of the entire home purchase price. Then, you split this between the seller’s agent and the buyer’s agent. Notably, sellers usually factor the total commission into the price.

So, in essence, opting to buy something without an agent will save you around 3% off the price. For multi-million-dollar homes, this amount is not small and could be tens of thousands. For a one-million-dollar house, this equates to $30,000. But, keep in mind, the seller pays this commission, so there may not be a money-saving advantage for you. In addition, the seller will pay the brokerage fee for the listing agent and buyer agent, so doing things alone has no real benefit for you.

3.    Hiring a Real Estate Attorney

Some people feel well-versed in shopping for a home, so they feel they do not need help in looking. However, instead of a realtor, they choose to work with a realtor who can guide them through the paperwork and complex process.

4.    Understanding the Process

In some cases, people have already bought and sold multiple properties, so they do not feel the need to seek assistance. When you already understand the process, getting help from others becomes redundant.

5.    Working With a Seller Who does not Want to Pay Commission

Finally, you can also encounter a seller who does not wish to work with any realtor and pay any form of commission. If you both understand each other and come to an amenable agreement, you can both decide to do the transaction without any realtor input.

Potential Setbacks of Buying Solo

Though some people believe that the monetary savings of buying a home alone are a great incentive, it can backfire on you. Going solo can equate to paying more in the long run. Why? Because your realtor is there to help you evaluate current market prices. They know what properties have sold in the past few months. Additionally, they can help you determine if the asking price is fair.

If you do not have any experience doing this kind of analysis and transaction, you can windup overpaying for the home. Moreover, you can end up paying for a home that has serious problems. Later, you may have to:

  • Fork out money on repairs
  • Have no contingencies
  • No directions with home inspections
  • Find yourself with no fall backs

There are many horror stories where buyers did not get any advice on the contract. As a result, they closed deals with serious problems. Sadly, they only realize this after they moved. With no contingencies in place, sellers will not pay for the repairs, and buyers have no other recourse but to lose even more money. Without proper advice, you are legally stuck with a binding contract. As a result, you may not only end up losing your deposit but even more on expensive fixes.

Steps to Buy a Home Without A Realtor

After careful consideration of the pros and cons of both sides, you come up with a decision you feel at peace with. If you decide to move forward with buying a home solo, you can certainly do that. Here are the steps you must follow to close a home on your own:

Step 1: Conduct negotiations with the seller’s agent.

You can try to negotiate the price with the listing agent and ask to take 3% off the price since you do not have a realtor. Since this amount is built-in to the listing price, there is no harm in asking for that fee to be knocked off. The worst thing they can do is say no. But if they say yes, this means you lower the purchase price since you do not pay the buyer’s agent fees. In return, you can also enjoy the following:

  • Less down payment
  • Smaller mortgage
  • Lower monthly payments

Step 2: Review disclosures and ask pertinent questions.

The closing disclosure is a critical material that includes terms of your mortgage and other related closing costs. Peruse this document well so you can compare the details with the loan estimate for your mortgage provider. If you notice any issues or discrepancies, ask for further clarifications. In addition, it would help to take note of the following:

  • Interest rates
  • Loan terms
  • Number of payments
  • Penalties
  • Other closing costs

Most of all, do not forget to ask for the seller’s final bills like utilities, cable, phone etc. Find out about this on closing day, so you are not saddled with outstanding bills that you did not incur.

Step 3: Seek professional review of the contract.

If you want to scrimp on the buyer’s fees, get advice from a real estate lawyer. You need this professional to review your contract before you sign anything. Buying a home is a major financial decision that can impact you for the long haul, so get legal guidance. Besides, contracts contain tons of jargon which can be complicated to understand if you do not have a law degree. With a lawyer’s advice, you have someone to protect your interests.

Step 4: Prepare pertinent documents.

You will need to bring a few pertinent items during closing. Make sure you have them on standby to prevent any delays. These are:

  • Certified Checks: Personal checks are not accepted, so you must prepare this and get it from your bank during closing. You will get ample time to prepare it. Ensure you know who it is payable to and the exact amount.
  • Homeowner’s Insurance: You may be required to show proof to your lender that you have an insurance policy covering the home on the day of the closing. This policy will last for a least a year, depending on the coverage details.
  • Government-Issued IDs: Have your current driver’s license or passport ready because you need to show a government-issued ID. Your company ID will not suffice for this transaction.

Step 5: Sign the paperwork and get the keys.

Allot some time to review and sign multiple sets of the same documents. You will sign an agreement between you and your lender. The other one is your agreement with the seller. Read everything to ensure you know what you are getting. It would help to have your lawyer present to safeguard your interests.

As you can see, it is quite complicated to buy your own home. Working with a realtor will facilitate the process and help you save on resources. You do not need to waste your time and energy scouting around for houses and negotiating deals. Most of all, you can stave off any potential headaches.

If you need assistance buying your home in Rhode Island, call our team at RI Home Store. We can help you find your dream home and assist you in listing your house so you can upgrade to a newer one that fits your needs and preferences.

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