Can you buy a home without a realtor? Yes. Should you do it? Probably not! Buying a house without a realtor would be like an auto mechanic trying to perform brain surgery. Could he do it? Maybe. Should he even try? Probably not! If the only reason you don’t want to work with a realtor is you think it’ll cost more, think again. If a house is listed through a realtor, the sales commission will be paid by the seller whether or not you have a realtor on your side.
Assuming you’re dealing with a full-time realtor, his or her only profession is real estate. The agent or broker knows real estate better than 99% of all home buyers. If you’re afraid of getting a realtor who’s an idiot or a conman, use your common sense and exercise your right to find another realtor. There are realtors who will say anything and do anything to make a sale. You should be able to spot that type of realtor a mile away. If you’re uncomfortable with a realtor, find another one.
Although some realtors don’t like the terms, there are buyer’s agents and seller’s agents. The difference should be obvious. The commission or fee earned from selling a house is normally split between the selling realtor and the listing realtor. If you employ a buyer’s agent to find the perfect house, the agent or broker should receive 50% of the sales commission. The agent or agency that listed the house for sale receives the other 50%.
Find a buyer’s realtor you can trust. If necessary, visit every real estate agent and broker in town. Don’t tell prospective realtors that you’re just looking. Be honest. State upfront that you’re looking for a realtor you can trust to help you find the perfect home. Tossing out the word trust will often send the shady realtors running for the hills. Make eye contact with the agent or broker and watch his or her reaction. If the agent reaches to shake your hand or pulls out a chair for you to sit down, you’ve probably found an agent you can trust.
Remember, the sales commission for selling a home is normally paid by the SELLER. Hiring a buyer’s agent won’t cost you anything, now or at the time you sign on the dotted line to purchase your home. A buyer’s agent will normally receive 50% of the sales commission from whichever home you choose. You should be treated with kid gloves when you meet a realtor and state that you’re looking to buy a home.
One final word about commissions, because you might encounter this situation. During the negotiations to purchase a home, it’s not unusual for the seller to ask that the BUYER pay the realtor’s sales commission. It’s uncommon but it does happen, especially if your offer is considerably lower than the asking price. If you offer $180,000 for a home that’s listed at $199,999, the seller might throw in the stipulation that you pay the realtor’s sales commission. Most real estate agent’s will be against this type of stipulation because the commission is based on the final sales price of the home. In the above example, if you agree to pay the realtor’s commission, it would be based on the price of $180,000 and not the full $199,999. With the average commission being between 5 and 6%, the realtor’s commission would be reduced by $1.000 – $1,200.
There are two ways to work with realtors – voluntarily and involuntarily. If you work with a buyer’s agent you’d be working with him or her voluntarily. Most people face real estate agents and brokers involuntarily. You might pass a house for sale and contact the realtor who has it listed. In that case, you would be working directly with the seller’s agent. While the realtor might be a super nice person and help you arrange a loan immediately, it’s still not the same as working with a buyer’s agent. By contacting the realtor listed on a For Sale sign or in an online listing, you’re forced to deal with only that realtor. If you employ a buyer’s agent, that agent would be the one dealing with the seller’s agent. To relieve as much stress as possible while trying to find a house, it’s usually best to work with a buyer’s agent.