The main reason a home owner tries to sell a home themselves is because they want to avoid paying a commission.
The main reason that a person would want to buy directly from an owner instead of using a Realtor® is because they want to save the commission.
Do you see the dilemma?
Both parties want to save the commission but there is only one commission to save.
There is a misconception that homes are cheaper if you buy directly from the owner because you don’t have to pay a commission.
The reality is a home is worth what it is worth in any given market regardless of whether there is a Realtor®involved. A real estate commission is the cost of doing business if a Realtor® is involved. Let’s take an in‐depth look at both options:
Option A: Buying a Home Directly From the Owner
First off, you will be working directly with the seller. This can be good but can also be bad. The good part is that the seller will likely have a very thorough knowledge of the home. The bad part is you willhave to negotiate directly with the seller and neither of you are good at it.
This is not an easy thing to do.
Buying or selling a home is a very emotional experience for both parties. Experience has shown thatdeals often fall apart because emotions get in the way.
You may feel that you will get a better deal because there is not a Realtor® involved.Remember, both parties want to save the real estate commission but there is only one commission to save.
The only person who will save a commission is the seller because that is the fee they would pay if a Realtor ®were to sell it for them. So no matter how much you pay for a home purchased directly from the seller you will not save the real estate commission. It can only be the seller who saves the commission.
You should be aware that your legal costs will be higher working directly with theseller because the real estate attorney or title company will have more work to do.
Without a Realtor® being involved, they will have to do the leg work that the real estate agent wouldhave done for you.
Option B: Working With a Realtor
- Help you secure the home of your dreams
- Help to negotiate the lowest purchase price possible
- Help you navigate around potential buyers minefields
Your Realtor® will keep you up to date with the latest properties that match your home buying criteria. Instead of trying to sift through hundreds of homes, you only review the homes that have the amenities you are looking for. In most markets these new listings will be sent to you within an hour of coming on the Multiple Listing Service (MLS).
A buyer's agent working for you will write the offer and ensure that the paperwork is complete, correct, and delivered to the appropriate parties such as your attorney, lender, and title company, to name a few. All this will be done in a timely fashion because an experienced agent does it several times a month.
Ask an attorney or title company whether they would prefer a purchase offer negotiated between a buyer and For Sale By Owner seller or a purchase offer negotiated between a buyer or seller with at least one real estate agent involved.
The majority will tell you that they would prefer having a Realtor® involved because transactions gomore smoothly and close on time when an experienced Realtor® is involved.
A Realtor® working for you will help you find a home, negotiate on your behalf, and handle all of the paperwork required by the Title Company or attorney. Buyer’s agents are paid by the listing agent from the proceeds of the sale and all of these services don’t cost you a thing!
In closing, I will share another advantage of using a Realtor® to help you purchase the home of yourdreams.
We were recently working with a buyer who found a home that they absolutely loved. We were able to negotiate $30,000 dollars off the purchase price for them.
Over the life of a 30‐year loan these homeowners are going to save approximately $60,000 dollars in payments.
That is some serious money!
Let’s say a buyer’s agent only saved you $10,000 dollars. That would be approximately $20,000 dollars over the life of the loan. When negotiating on a home, it makes sense to hire a professional, especially if someone else is paying the bill!
In the next month’s installment, we’ll make sure you’re ready to go through the whole process from contract to closing.
