Home purchase without a realtor (sales, real estate, mortgage broker)

[mj1932]

Sorry another question...

Can anyone comment on experiences of purchasing a home without utilizing a realtor? Since I'm "casually" interested in getting a new home and with the ease of internet listings, I'm not interesting in hiring a realtor at this time.

That being said I wonder how it works if I found a home I'm interested in. I have a prepaid legal service that can assist with a "home purchase", but am unsure to the extent of that service. I've heard that essentially what typically happens is that the listing agent will become your buying agent then for the house your interested in. In that case, my hope is that the agent will then lower the commissions (since they get $ on "both" ends) and that it should translate to a lower sales price to the buyer(me).

Also Im curious as the willingness of listing agents to show a house when you just call them up. That and I don't care for pushy nature of some agents to procure their services too. I've been disapointed in how few open houses there are, so that I can just walk in and look.

Anyways any insight is appreciated. Also I did not intend to turn this discussion into the benefits of using a realtor and try to stay focus on how can an individual purchase a home with minimal professional oversight (& cost). I liken it to me managing my own retirement on Ameritrade, opposed to hiring a full service CFP or Accountant for it.

[SteveMax58]

I will give you my take as a seller, who has bought and sold multiple homes, who is not a realtor or in the RE business.

It "could" be a benefit if you find a home that you absolutely love and want to buy, but the seller just does not have the equity or cash on hand to reduce their price further. If you are capable of handling everything a buyer's agent(3% typically) would, or if the seller's agent represents you AND has agreed to a discount to the seller if they represent both sides(1.5% in my case). So for example, if you asked me to come down on my price by 4% more than I am able to in a conventional buyer/seller agent fee scenario, but you are representing yourself or using my agent, I would be able to pass the agent fee back as it has saved me money as a seller who is priced at my financial bottom(not what is owed).

In most RE markets, it likely would not be a benefit to you to not have a realtor. As you may know, ALL realtor fees(buyer and seller) are paid by the seller. In this current market (namely Florida and a few other states) it is concievable that you could gain a slight gain in price by not having a realtor, but it would have to be a situation which happens to be exactly like my own situation...and your potential risk of buying a poorly valued property, not catching every potential loophole, or leveraging everything you can is greater. Your "potential" gain is 1.5% to 3% wiggle room that may not have been there for the seller...again, if the seller is in a similar situation as my own.

[chaz longue]

I'm in Vermont, and the laws of agency are different than they are in FL. I'm a Realtor.

A couple of quick observations:

The first is that in my experience (here in VT) purchasers who don't use an attorney who's a specialist in RE transactions are missing a very important step - particularly since the attorneys I recommend charge a single price (just a few hundred dollars) to perform a title search, answer questions, conduct the closing, negotiate with the seller's attorney to resolve possible clouds on the title, permit issues and so on, facilitate payoffs, cut checks, and a dozen other things. This may or may not include preparing offers, and overseeing the process of creating the Purchase and Sale document which results. I've worked with a number of buyer clients over the last 20 years who have simply fired thier first (non RE specialist) attorney half way through a transaction out of sheer frustration - and begun to use a competent RE attorney who then proceeded to the closing, sorting out the mess created before they got the call... for a few hundred dollars.

You mention that the listing agent would "become your buying agent". In VT, after making a written disclosure that he/she was to treat you as a customer, and the other party as a client - it's true in a limited sense: The listing agent would assist you, while acting in the interest of the other party. The question of whether or not you could claim any of the dollars the listing agent was owed - contractually - by the seller is one which is endlessly intriguing. I'd observe that you're not a party to the listing contract between the seller and the listing brokereage firm, and wish you much luck.

Best of luck!

[mj1932]

Exactly. I don't have any issue with taking some of my time to initiate\manage deadlines of all the mortgage, inspection, and title stuff. I think its a good thing to understand finances & business practices. Especially if 3%(buyer agent commission) equates to $9k on a $300k home. Also Im fortunate in that Im in no rush to purchase (with this market and my situation).

[chaz longue]

Originally Posted by mj1932

Exactly. I don't have any issue with taking some of my time to initiate\manage deadlines of all the mortgage, inspection, and title stuff. I think its a good thing to understand finances & business practices. Especially if 3%(buyer agent commission) equates to $9k on a $300k home. Also Im fortunate in that Im in no rush to purchase (with this market and my situation).

Perhaps I wasn't clear:

If you're interested in the $ owed to the licensed agent - just remember you're not a party to the contract between the seller and the agent - and you're (I believe) not licensed. So I'm not aware of a way for you to claim any dollars owed to another party.

[bentlebee]

I have bought several homes without a realtor and also rented them out without a realtor. I only used a realtor to sell them but mostly I did everything myself even with selling.

My experience with realtors in my area isn't great since most of them just became a realtor because it was easy for them to sell and basically they had no clue what they were doing and it was very annoying. Since i have the time and I learn fast, I solved many issues myself although some things weren't so much fun (just before closing, the realtor forgot to check on stuff, which happened in more than 1 case)....
I rather buy homes myself without a realtor telling me how good the hosue is looking since i know what I like and I don't need a realtor telling me "this is the kitchen, beautiful ceiling, etc..", if i would need a mortgage I rather shop around than go to the referred mortgage broker (we all have seen how great it went in the last couple of years), the mortgage company you will use will probable send an appraiser out that they work with but you have to pay for it (so that is easy, just pay the bill), if you need a real estate lawyer...just call one who is working for a well known company.
If you need a home inspector you can look online and/or ask around for a good one...beware for all the refferals since they get something out of it and they might refer you to a person who can fix it and also is making off you....
If I can do it so can you and you can negotiate the asking price down since the seller doesn't have to pay the commission.

I don't agree with the seller is paying the realtor...since we all know the money is coming from the buyer.....just like grocery shopping...the customer is the one who is paying for advertisement, getting the groceries to the store, manufactering the items, etc....

[mj1932]

Originally Posted by chaz longue

Perhaps I wasn't clear:

If you're interested in the $ owed to the licensed agent - just remember you're not a party to the contract between the seller and the agent - and you're (I believe) not licensed. So I'm not aware of a way for you to claim any dollars owed to another party.

I understand that, but the hope is that it would cause a lower offer to be excepted since essentially the seller would NET more money if the seller commission is not required. If that lower amount is equal to the full commission is not known, nor if there are any legal requires to refund or rebate it.

[mj1932]

Another avenue to persue ...

In my previous home purchase (in another state), I used a realtor that was assigned as part of a rebate\incentive program from a credit union and I got some $ back after closing. I've also read around and seen where people essentially negotiate this with buyer agents themselves as well. If I could get a 1%-1.5% purchase price rebate from a buyer agent when I find the house & they just handle the transaction, I could probably live with that. I also saw that in Florida this is legal as long as you disclose it to everyone(buyer, seller, lender, etc.) involved in the transaction and it doesn't exceed some % of the transaction price.

[chaz longue]

Originally Posted by mj1932

I understand that, but the hope is that it would cause a lower offer to be excepted since essentially the seller would NET more money if the seller commission is not required. If that lower amount is equal to the full commission is not known, nor if there are any legal requires to refund or rebate it.

You may want to have a local Real Estate attorney spend some time with you going over Florida contracts if this isn't clear. You may want to start by asking how you can examine the terms of the listing agreement you're not a party to. The commission you refer to above as "the seller commission" is, in fact, required, in every case I know of..., but of course we're in different states. But I've never seen a listing contract which specifies terms which would allow you to gain from the scenario you're imagining in the way you're outlining it.

Here's another angle though: You want the % the agent you're not working with would have been entitled to, right? Fair enough, ...but if you were my client, you'd see all the comps, make a more informed offer, take advantage of 19 years of experience negotiating on behalf of buyer clients, and save more than you'd gain by going after the dollars I'll earn...which you almost certainly have no claim on to begin with.

...and another angle - I was the listing agent in the situation you envision a few times - most recently in 2006. I disclosed all the information to, and worked with the buyer (as a customer, not a client), made twice the amount I would have otherwise, and made my seller client happy enough to send me more business (including finding her next home). The buyer customer then retained me as a CLIENT and I represented her as a buyer's agent for the next property she bought. I worked hard for every cent of each of these commissions, over 17 months.
I tell you this story not to seem smart (I'm not, I'm just hard working and experienced, ...and lucky occasionally too) but to suggest to you that A) things are often more complicated than they seem, B) using a professional can make you money in the long run - not cost you money C) sometimes paying attention to the +/- 97% makes more sense than focussing on the +/- 3% and missing the bigger picture. Or as my mother (still) says..."don't be penny wise and pound foolish, Chaz!".

Best of luck to you !

[mj1932]

Fair enough and again my intent of the thread was not the pros & cons of using a realtor. Based on your perspective regarding listing agreements and such, it maybe wiser for me to pursue some sort of rebate approach. Thanks.