Buying a house on your own or go with a realtor?

[bigdog02]

We found a house that is for sale by owner and we really like it.

We have a realtor who has been helping us and talking with us, but we have never signed a contract or anything.

How tough is it to buy a house on your own without the help of a realtor? We are pretty inexperienced at how the whole process works, but if it is easy and would save us thousands, then I am curious.

[CASHMONEY]

I have both sold and bought "By Owner" it is allitle more stressful but worth it in the end. I never did understand paying a realtor to buy a house :confused:

[Fozzie Bear]

A realtor...

They are there to "protect" you, and your best interest as a buyer. In addition, if they are a "Buyer's Agent", you typcially will not have to pay for their service.

1. They will make sure you do not over-pay for a property, based on current market conditions, and of what similar houses in the area have been selling for as of late. This can especially help in the "lending" department, where FSBO houses, the lender will want to either get several realtor comparable market values, or most definately will get an appraiser to appraise the property to ensure that what they are borrowing is what the property is actually worth in the market place.

2. They will work to ensure that there are no dangers and/or issues with the property, be they environmental (chemical hazards and such), zoning, encumbrances and/or liens on the property, etc., that may adversely affect the property now, as well as in the future.

3. They may ask the seller to do a "one time sellers representation", which is where they get paid their commission, by the seller.

4. A private seller, may not disclose all material facts that could affect the house and/or its overall safety. After all, he is trying to sell it as quickly as possible. With a realtor, the seller will be required to disclose all known material facts, that can adversely affect the property. This not only protects you, but them as well from legal liability. How would you like to buy a house, if the owner knows of problems with the furnace, you move in, and that problem leads to carbon monoxide poisoning. Happened in Minnesota.

I've bought many properties over the years, as personal property to which I live, investments, and fixer-uppers. Many I purchased without the assistance of a realtor, due to the fact they were FSBO houses, and even though I saved up front (and in some cases thought I did), I paid dearly in the end without realizing it. The last three houses that I've bought, I've went through a realtor, and I've had better luck with those houses, then I did with the FSBO houses.

Last year, I took my Pre-Licensure courses to become a real estate agent/realtor, but due to the slumping market, didn't go for my certification test (which I am now restudying the book to do). I've gained alot of personal insight, as well as a deep appreciation for what a realtor actually does, compared to my personal, uneducated bias, and/or based on other peoples opinions that they were trying to pass off as fact.

[Kip Manuel]

Like Fozzie said they will help you not getting screwed.I am a broker but do not sell houses just rec. land and farms.Having a buyers broker will protect you and his price is negotiable you will save a pecerentage b/c it is not listed so the only comm. will be to your broker who will be representing YOU so it is worth a couple thousand on a house purchase.A good broker will be worth the money,he can earn his comm. by protecting and getting the best deal on the house and making sure paperwork is done that will get you the proper disclosure on anything wrong with the house.That said if it is a brand new house it could be bought without a broker if you are a savy buyer on things like this but a house is not the type of purchase to get on the job training in buying real estate.Kip

[AK-AZ]

As Foz and Kip have stated, real estate laws change almost as fast as the weather and what you are paying for is someone with that knowledge. If you are inexperienced in buying property, it would not be wise to go this on your own. Disclosures are an important part of buying a piece of property as it puts the liability on the seller and forces them to be up front if there are negative things about the property that may not be immediately evident. Gives you a negotiable position you wouldn't have otherwise. Good luck!!!!

[bigdog02]

Great replies guys! thanks for all the info.

My wife and I were leaning towards a realtor.

I had talked to the owner already and told him what i wanted to spend. Our realtor has been informed that I have been in contact with the guy, but that is as much as I have done. Realtor already told us their fee would be 3% if we bring them in. I just wanted to talk to the guy first since it was a for sale by owner and the guy would respond a bit better person to person than to a realtor on my behalf.

Thanks again guys, all the advice is more than welcome!

This site always amazes me. From broadheads to home advice, to anything.

(FYI this property is exactly what my wife and I have been searching for, so we are pretty nervous about it lol. Has a little bit of space around it and to top it off, it borders 200+ acres of woodland that I have free permission to hunt on anytime I want.)

[cmherrmann]

As said before the Realtor protects you, normally if the house is being sold through a realtor the seller pays all fees depending on local law. One of the big things when buying direct from the owner is to make sure there are no outstanding taxes, leans, or loans against the property that you could get stuck with. If the home is an older home it would be a good idea to get an inspection done by someone that you hire not the seller. Some states/towns require that an inspection is done and any violations are fixed before the sale. You can also negotiate with the realtor on what percentage you will pay them, especially in todays housing market.

[BDHUNTR]

Just remember, all Realtors are real estate agents, but not all real estate agents are Realtors.

[hankpac]

I will never ever again use a real Estate agent. I cannot see giveing them 3-6 percent for doing something that the title company will do for you (fill out the forms for you). You HAVE to pay the Title company anyway, and they know and do everyting the agent does.
As far as protecting you from certain mistakes, well, if you are making the largest purchase most people will ever make in their lives, you owe it to yourself to know all that stuff. Market values, current trends, interest rates, Everything.
Also, you have to pay an appraiser anyway, and HE will tell you what it is worth.
I far prefer to swing my deal with the owner direct. The only thing you pay for with an agent is for him to take your earnest money check to the Title company, and your offer to the owner, and his refusal, counter-offer or acceptance back to you, and back and forth. I aint paying 3% for his shoe leather.

You have already talked to the seller, you don't owe the agent anything.
I have both bought and sold FSBO. I love it.
The seller gets more, the buyer pays less, and if you are on your toes, everyone is happy.
Is he carrying the note, asking a high percentage% asking a high down payment?
If you are going to borrow money, do you have a pre-approval, and a lock on an interest rate from the mortgage company? You have to do that yourself anyway, so the agent doesn't help you there.
Once you have a pre-approval and a lock on the interest rate, and know how much the mortgage company wants down (usually 20%) you can go back to the seller, and make an earnest money offer. Tell him this is what you want to offer, and that you are going to the Title company to do that. Do NOT make any negotiaions at that time, since without the paperwork, you are both just talking in the breeze, and nothing is firm without it.
Good luck.

[Fozzie Bear]

There you have it. That is the same thinking that I had, and what other's I listened to for many years that didn't know bullspit about what a real estate agent/realtor/broker actually does and the various organizations that get involved, including my parents, had espoused repeatedly.

I almost got burned with one FSBO, vacant investment property with 3 units, good asking price that needed some serious cosmetic work on the inside, and that I was working with a realtor with on at the same time, to ensure all my bases were covered.

I personally checked not only with the seller, but with the county recorder, to see what liens were actually against the property, as well as any other issues that may have been undisclosed that I wasn't told about.

Tax lien was settled and payments current; check.
No assessments...
Mortgage lien; outstanding (small amount...hence the good deal I was getting)
Second mortgage lien on the house; satisfied.
Third mortgage lien; satisfied
Fourth mortgage lien; satisfied
Fifth mortgage lien; satisfied
No other liens...

Agent uncovered the same liens but neither of us uncovered a "mechanic's lien" for close to $10K that apparently wasn't recorded yet, but where the paperwork had been filled out and filed by the contractor.

How did that little tid-bit come up?

The contractor didn't know who was interested in buying the property.

So, the contractor proceeded to call the real estate companies, until he found the agent that had been working with me, to make sure I was aware he had a lien against the property.

Guess what...seller increased his price after that bit of knowledge came to light...as he had the basement redone, because of continued flooding...just before he put it on the market. Something he didn't disclose, even after I had asked him about flooding...since a few other houses on the block looked like they had water issues, due to the way the foundations look.

Nicely covered up the outside damage, and put up walls to cover the basement, and nicely cleaned up.

Raised a red flag. So my agent subsequently found some of the previous tenants, only to find out, not only was the basement flooding, but the sewer would constantly backup and wouldn't drain.

BTW, I had a Building Inspector lined up, that I cancalled, because I pulled my earnest money and scratched that deal.

My realtor advised me to walk away, FAST, and did some checking!

The seller couldn't sell it, and the building is no longer there. It had been CONDEMNED.

Guess how long the seller had owned the property?

Less than a year.

Guess how he bought it?

FSBO!

Guess what my agent found out afterwards...

The first owner, had several notices from the city to remedy certain issues, based on complaints by current, and past tenants regarding the flooding and sewer backup, and possible infestation probelms.

Guess what the seller was going to do, since he got it at a bargain price?

Remedy the problems, which he was attempting to do. Hence all the other mortgage liens...but...he wasn't passing certain inspections...including TA-DAH! A recent Plumbing Inspection!

[AK Jeff]

We used a realtor when we bought our house, no regrets, he was a friend. I'd probably use one again if i was buying.

But, if I was selling, I wouldn't. A coworker just her house FSBO. She hired a lawyer to write up the contract and do the paperwork. Total cost for the lawyer, $300. Paying an agent 6% for selling a $320,000 house, a lot more.

Good luck with your search, we looked for a long time before we found what we wanted.

jeff

[Dredly]

Make sure you figure out everything in advance if you aren't going with a Realtor... including a lawyer to read everything and make sure you aren't missing something. Some stuff that I've heard of is people sliding in clauses like "I will retain all usage of forested property" or "I will have a right of way across property", "Permission to hunt", "I will retain permission to use the barn / shed / fields". Not sure if its true but a buddy of mine who was buying a house said the original owner tried sliding in something about the new owner would pay him to log the land every 3 - 5 years or something like that. People are very sneaky

some stuff is REAL easy to stick in there when you are signing 40 pages of paper and there is nothing illegal about it. Also your mortgage company may require property value / estimates prior to giving you the money, this is the stuff a realtor would provide.

You may also make sure you find a trusted reliable inspector to review the house and confirm that nothing is wrong with it (for example: termites, building code violations... etc). The last thing you need is to buy a house only to find out Joe Fixit repaired the roof last winter and it was a poor job or that termites have eaten the foundation.. .etc

[Ohio Bow]

Ive always bought and sold on my own. You should have a lawyer help you hash out a contract but thats a heck of alot cheaper than paying a realtor(selling end). Good Luck

[42WLA]

Sign a "Buyer Agency Agreement" with the realtor. They will be working for you not the seller. The only way to protect yourself.

[rembrandt]

I just built my own home and paid as I went and boy did it free up my pay check. I recommend it everyone. I figured if someone else could do it, I could to and it was great to have a home paid for.

[Muddy41]

Sellin a house do it yourself. Buying a home get a realtor. It is free and will save you in the long run

[tsteel]

Id say use the realtor! I personaly dont have to worry about havin to pay a realtor due to family members and a few close family friends that are realtors.

Good luck on your new purchase!

[Dredly]

I just built my own home and paid as I went and boy did it free up my pay check. I recommend it everyone. I figured if someone else could do it, I could to and it was great to have a home paid for.

if you can financially afford to do that its great... for the other 99% of us it isn't reasonable :wink:

[bigdog02]

If we could have afforded to buy a section of ground, and build from scratch, we would have, that would be the ultimate retirement goal for us.

We might go the route several have suggested. When we buy the new place, use a realtor, when we sell our current house, let the buyer get a realtor.

[Scablands]

I just built my own home and paid as I went and boy did it free up my pay check. I recommend it everyone. I figured if someone else could do it, I could to and it was great to have a home paid for.

Me too, my wife and I bought some lumber, conctete, blocks nails etc. and books and went to work. Took us a couple of years and amazingly 30 years later it is still standing LOL.

[Fozzie Bear]

We might go the route several have suggested. When we buy the new place, use a realtor, when we sell our current house, let the buyer get a realtor.

That's great...if the street where the typical "FOR SALE BY OWNER" sign is located, gets a lot of traffic and/or is noticed there and/or in the tabloids.

Keep in mind, not only for real estate, but anything else in life. It's not how you or I think, its how John and Jane Q Public think. FOR SALE BY OWNER could inadvertantly communicate the message, "potential house problems".

Also, it could create problems with FHA and/or HUD loans for potential buyers, especially if your house is for example, not FHA approved. :wink:

We just looked at another investment property lastnight, that on the listing indicated it wasn't FHA approved, because it was built in 1958, had original windows and plaster inside. Lead paint layer (original underneath the many coats of paint) had disqualified it for the possibility of an FHA approved loan.

A realtor will work for you, to get the best possible exposure, and ensure the potential buyers have many options available to them to be able to purchase your property.

Another way to look at it is, if you are worried about paying the commission, and you want to get at least $145,000 for your property, and the realtor's commission is 6%. Work on setting your selling price at $153,700 (minimum) +, and fix up and stage your property according to make it stand out over the others.

[hankpac]

I DO know what I am doing. There isn't enough time or space to give this young fella all the ins and outs of of buying or selling a house without giving someone 3-6% of the proceeds for doing something I can do myself.
I took the time to learn, studied the regulations, and asked a lotof questions from RE agents, the title companies, and even took the Century 21 training 25 years ago.
There is always the chance you are going to miss something, but having a RE agent is no guarentee that a hidden taint on the title isn't going to surprise you. But I do my homework, dot every I and cross every T, and double check with my lawyer. I have several stone cold solid contracts that protect me, and don't give up anything.
Our orginal poster can do what he wants, you can do what you want, and several of us here don't use agents, so I am not alone.
the material is not exclusive, it is obtainable, and yes one can do it. I choose to.
Because I do so doesn't make me wrong, nor does it mean I don't know Doodly-squat or however you described it. Shame on you for your invective, insensitivity, and closed-mindedness. I hope you don't treat your customers like they don't know anything, when you get your license.

[AK-AZ]

Foz, Hank, you both make valid points, but lets restrict this to what the original poster was asking. There are a number of folks who have been very successful without an agent, just as there are those who have lost their savings the same way. If you have the background to do this, fine. This gentleman has stated that he is inexperienced in buying real estate, it would be unwise to suggest that he try this on his own. As he buys and sells and becomes more familiar with what happens during a real estate sale, it may become a situation where he will want to forego an agent.

[Dredly]

I DO know what I am doing. There isn't enough time or space to give this young fella all the ins and outs of of buying or selling a house without giving someone 3-6% of the proceeds for doing something I can do myself.
I took the time to learn, studied the regulations, and asked a lotof questions from RE agents, the title companies, and even took the Century 21 training 25 years ago.
There is always the chance you are going to miss something, but having a RE agent is no guarentee that a hidden taint on the title isn't going to surprise you. But I do my homework, dot every I and cross every T, and double check with my lawyer. I have several stone cold solid contracts that protect me, and don't give up anything.
Our orginal poster can do what he wants, you can do what you want, and several of us here don't use agents, so I am not alone.
the material is not exclusive, it is obtainable, and yes one can do it. I choose to.
Because I do so doesn't make me wrong, nor does it mean I don't know Doodly-squat or however you described it. Shame on you for your invective, insensitivity, and closed-mindedness. I hope you don't treat your customers like they don't know anything, when you get your license.

I'll be good and edit it. Two States already said it

[Fozzie Bear]

I DO know what I am doing. There isn't enough time or space to give this young fella all the ins and outs of of buying or selling a house without giving someone 3-6% of the proceeds for doing something I can do myself.
I took the time to learn, studied the regulations, and asked a lotof questions from RE agents, the title companies, and even took the Century 21 training 25 years ago.
There is always the chance you are going to miss something, but having a RE agent is no guarentee that a hidden taint on the title isn't going to surprise you. But I do my homework, dot every I and cross every T, and double check with my lawyer. I have several stone cold solid contracts that protect me, and don't give up anything.
Our orginal poster can do what he wants, you can do what you want, and several of us here don't use agents, so I am not alone.
the material is not exclusive, it is obtainable, and yes one can do it. I choose to.
Because I do so doesn't make me wrong, nor does it mean I don't know Doodly-squat or however you described it. Shame on you for your invective, insensitivity, and closed-mindedness. I hope you don't treat your customers like they don't know anything, when you get your license.

Well good for you! :thumb:

Believe it or not, that is the overall reason why I'm decided to study and go into real estate, to learn the ins and outs, so that I can do the work myself, and if possible, forego paying a realtor the commission, I could otherwise have paid to myself a a commission on a deal of an investment property.

But, I'm working on getting back into buying and/or selling properties as investments in a different part of the country, from the original Podunk town I grew up in, so it makes sense for me to go through the whole shebangs, versus others that just buy and sell a house to live in as needed for them and their family.

And again, I'll be honest. I thought the agents (in the Podunk town I grew up in) were the biggest crooks around (generalizing of course). But since I've taken the courses, again, I have a deeper respect for them today, then I did then, and can now at least determine who knows there stuff and who doesn't to make "informed choices". :wink:

[UCNYbowhunter]

i would use a realitor ,but for home inspections i will never use one again... better off throwing the money out the car window going down the highway ...they are all for the home sale i have seen it to many times ...have your furnace checked by the oil, gas comapny you use.... carpenter friend to look at the house ....utility companys can inform you of town water sewer type of materials used for installation problems you may have in the future with them ...building inspectors can also be a big help .. never again will i pay someone to look at a house and in the fine print say they are not responsible for any missed items during the inspection

[18javelin]

We bought our first house from an Individual and The way i see it if you are borrowing money from the Bank, They are going to make darn sure there is no leins on it. As far as the Inspection well you pay for it out of your own pocket so get as good a place as you need to be sure it right.

We saved thousands by buying this way and well thats alot of payments i dont have to pay now so i am happy. Got it almost 20 thousand less than what the realator had it listed for a year before the lady dropped them and sol it on her own. Guess what she made ALMOST as much money because we paid Closeing cost and she had no pealator fees. So it was a win win for Her and Us. Left alot of money free to remodel.

[pointysticks]

get a realtor. doesnt the seller pays all the fees?

[Tax Lawyer]

get a realtor. doesnt the seller pays all the fees?

That is the normal case. I would seek a realtor and ask her/him what he/she has as listings. If they say they are paid by seller, that is great.

IMO, I don't think realtors protect you that much....if at all. You are much better off paying for a better lawyer to protect you.

I am closing on an apt tomorrow. There was no realtor involved and I got a better price. However, I have had to deal with seller directly and it has not been fun.....at all. Luckily, I have a great lawyer and she is a real pitbull. :mad::wink:

So, contact a realtor and find a good lawyer who specializes in residential real estate closing.

[ciscokid]

IMO, I don't think realtors protect you that much....if at all. You are much better off paying for a better lawyer to protect you. I am closing on an apt tomorrow. There was no realtor involved and I got a better price. However, I have had to deal with seller directly and it has not been fun.....at all. Luckily, I have a great lawyer and she is a real pitbull. :mad::wink:

So, contact a realtor and find a good lawyer who specializes in residential real estate closing.

I agree with you. You need a Lawyer only if you already found a house.

Of course you have to make sure of some usual details:

Make sure the seller pays for inspection and appraisal.

Some buyers prefer to pay for the appraisal just to make sure they are not "persuaded" to a certain price.

NOTE: If the appraisal price doesn't meet the asking price then you could renegotiate the price.

Some people even ask for a carpet allowance up to $3000 as well. :eek:

If you do a little homework you could find more ways to save money.


Good Luck!

[bigdog02]

Just an update for everyone!

My wife and I went it alone to talk to the guy the first time, since we had heard that he was not very receptive to dealing with someone directly from the start through a realtor.
My wife and I decided though that we wanted to bring a realtor in, we just don't have the time or the amount of sanity left to go through it all on our own just yet.

Anyway, he called us back and agreed to the price we had talked about the last time.
I am doing my best to not be excited, a lot of other things need to fall into place (such as the verbal agreement we have with our neighbor to buy our current house).

If it would all go to plan, I could be hunting late season PA muzzleloader right behind my house :)

[rrbreier]

Save the 7 1/2 percent!

[ACooper1983]

i bought my first house at 23 (six months ago) forsale by owner, i couldnt be any more happy, i saved myself roughly 20,000$ doing it that way, my house was recently appraised for 30K over what i bought it for, im have tempted to sell it in a year, and take the mioney and buy another farm. For me, i;ll try and by from the property owner ever time before i bring in a realtor, they're just as bad as lawyers