Buying "Used" House WITHOUT a Realtor

[mamaham]

A recent thread was asking about buying a new house without a realtor....  I would like to hear from anyone who has bought a "used" home without a realtor.

We are not quite ready to buy a house yet, but are considering doing so without a realtor.  We are looking in a very small area and therefore have been watching the home prices for over a year now.  So, we have a pretty good idea of comps and what are good asking prices.  With realtor.com and MLS, we really don't need a realtor to send us listings to look at - we can do that ourselves.  So, the idea would be to purchase the home with the help of a real estate attorney.  The deal would be contingent upon the seller accepting a lower offer since they would not have to pay the buyer agent commission.  In this case it would be about $20-25k.

Has anyone successfully done this?  Did the seller accept a lower offer in exchange for no buyer agent?  How did you get around the requirement that an agent needs to be present at the inspection and appraisal (I have read that the selling agent can do this and may/may not charge a fee)?  Did you find the process to be worth the savings or was it a huge headache?  It seems like it worth be worth the work to save $20k, but I may be missing something big.  Thanks in advance for any advice!

[jfoxcpacfp]

I think it is possible, but one problem you will face is that you will be limited to only homeowners who are not already committed to an agent. Maybe that's a high percentage, I just don't know. If you find a house that you like that is listed, you'll be effectively knocked out. If you're ok with the 1.5% commission RedFin assesses, then you'll have a much deeper pool of homes. Of course, you'll want to hire a good home inspector.

[mamaham]

Thank you Johanna for your reply.  Why can a home listed with an agent not sell to an unrepresented buyer using a real estate attorney?  I guess I have not found that to be the case in my limited research.

From RedFin:

https://www.redfin.com/blog/2017/02/everything-to-know-about-buying-a-home-without-a-real-estate-agent.html

• If you work without an agent, you can only buy for-sale-by-owner (FSBO) homes: False. You can make an offer on any home that you could if you were represented by an agent.

 

 

[wcireader]

At least when I looked into doing this in 2003 in Texas, the buyer would still pay 6% commission but all would go to his agent instead of half to his/her agent half to yours. Just FYI.

[jfoxcpacfp]

mamaham wrote:

Thank you Johanna for your reply.  Why can a home listed with an agent not sell to an unrepresented buyer using a real estate attorney?  I guess I have not found that to be the case in my limited research.

From RedFin:

https://www.redfin.com/blog/2017/02/everything-to-know-about-buying-a-home-without-a-real-estate-agent.html

• If you work without an agent, you can only buy for-sale-by-owner (FSBO) homes: False. You can make an offer on any home that you could if you were represented by an agent.

Click to expand...

Sorry for any confusion. You had mentioned you were trying to get a discount by not costing the owner any commission. However, if the owner is already listed with an agent, s/he is bound by contract to pay the listing agent a commission if the home sells while under contract. If the owner communicates with you while under contract, the seller is still obligated to pay a commission to the listing agent even after the contract term expires.

Of course, you can always make an offer but the homeowner may not realize any savings with which to discount the home to you.

[Dr. Mom]

When we bought our current house 16 years ago, it was a for sale by owner so no agent on their end.  We had an agent that we could've chosen to not use to save our commission.  In the end, I'm glad we used her.  The back and forth negotiating between seller and buyer can be hard to do.  Both sides can get quite emotional.  I have no doubt that we would not have bought this house without her.  Our first offer was seen as an insult to the buyer.  Their asking price was ridiculous to us.  In actuality, both were fair depending on your perspective.  We saw the house as a total remodel.  They did not.  In the end, we settled precisely half way between their ask and our original offer.  It took 9 months, alot of posturing, and alot of patience.  The agent definitely made her commission.  YMMV.

[CM]

mamaham wrote:

A recent thread was asking about buying a new house without a realtor….  I would like to hear from anyone who has bought a “used” home without a realtor.

We are not quite ready to buy a house yet, but are considering doing so without a realtor.  We are looking in a very small area and therefore have been watching the home prices for over a year now.  So, we have a pretty good idea of comps and what are good asking prices.  With realtor.com and MLS, we really don’t need a realtor to send us listings to look at – we can do that ourselves.  So, the idea would be to purchase the home with the help of a real estate attorney.  The deal would be contingent upon the seller accepting a lower offer since they would not have to pay the buyer agent commission.  In this case it would be about $20-25k.

Has anyone successfully done this?  Did the seller accept a lower offer in exchange for no buyer agent?  How did you get around the requirement that an agent needs to be present at the inspection and appraisal (I have read that the selling agent can do this and may/may not charge a fee)?  Did you find the process to be worth the savings or was it a huge headache?  It seems like it worth be worth the work to save $20k, but I may be missing something big.  Thanks in advance for any advice!

Click to expand...

As Johanna wrote, if the seller is listing with an agent, then the seller has to pay that agent's commission.

If you have a buyer's agent, then the two agents will split that commission. If you have no agent, then the seller's agent gets the whole commission (usually about 6% in my area).

If you buy a FSBO (for sale by owner) listing, you and the seller can negotiate without the intermediary and split the commission savings between you.

[ajm184]

Having an all-cash offer to make the home purchase will usually provide some additional price leverage with the seller without a buyer's agent.

[djohnflatfeecfp]

Bought our new "used" home without a broker this summer.  No problems whatsoever.  We found it on Zillow as a "make-me-move."  The previous owners were planning to sell in late summer and were hoping to get a bite in the spring before they had to list it with a realtor.  They and we knew it would save roughly 6.5% by having no realtor involved so we both had a lot of flexibility on the price.  Otherwise it would have been outside of my price comfort zone.

 

I hired a real estate attorney to review the documents.  Between him and my experienced mortgage broker they knew everything I needed to get squared away.  My home inspector handled everything inside and outside the house except for a pest inspection, which required a separate check.  Not sure where you live, but a realtor is not required to be at any inspection in OH.  If you are legally required to have a realtor there for the inspection find one who will take a flat-fee for a few hours of following someone around.

 

Now, we used a realtor to sell our previous house as we were moving from a location with a ton of inventory into an area with barely any.  She was not happy we did not engage her on the purchase, however, I found the house on Zillow and she could have found it there just as easily, but didn't.

 

We have bought one home and sold one home over the years without a realtor involved and it has never been an issue.  Looking back on it they were less time-consuming than the ones with realtors because we were in control of everything.  No need to call my realtor who called the other realtor who then called their client and then back the other way.  Talk about a waste of time and energy.

[mamaham]

CM wrote:

If you have a buyer’s agent, then the two agents will split that commission. If you have no agent, then the seller’s agent gets the whole commission (usually about 6% in my area).

Click to expand...

I guess the only benefit to going without a realtor is if the seller will accept a lower price by paying their (seller's) agent only 3% and the buyer's agent 0%.  Otherwise, it just does not make sense.  Seems like the majority here do not think that this would be the case and that the seller would still pay their agent 6%.

 

from the redfin article:

"You don’t pay for your agent anyway, the seller does. Working without an agent won’t save you any money:False. There’s debate as to whose money pays the agents, but for most people, the important part is this: it’s the seller who determines what percent of a commission is paid to their own agent and to the buyer’s agent. If you can work with the seller to lower the price of the home in exchange for them having to pay nothing to a buyer’s agent, then that’s money you can save."

[mamaham]

djohnflatfeecfp wrote:

We found it on Zillow as a “make-me-move.”

Click to expand...

Thanks for your experience.  For whatever reason, there are not many (if any) FSBO or make me move houses for sale in our area.   I would prefer the experience you had and forego working with a realtor but it may not be possible in our situation.

[mamaham]

ajm184 wrote:

all-cash offer

Click to expand...

wish we were to this point in our financial journey, but we are not quite there yet....

[CM]

mamaham wrote:

I guess the only benefit to going without a realtor is if the seller will accept a lower price by paying their (seller’s) agent only 3% and the buyer’s agent 0%.

Click to expand...

In my experience in two different states the listing agent's commission is set by the initial agreement between seller and agent. That is, when the seller signs with the agent he agrees to pay a 6% commission (or whatever the going rate might be). Period. There is no option to pay the seller's agent less than the original agreement.

[White.Beard.Doc]

Another consideration for you....

If you have a specific target neighborhood where you would like to live, you can write up a short bio about your family and stuff the mailboxes in that target neighborhood, specifically offering to help a seller avoid paying a commission.  In our last neighborhood, a couple of the homes turned over in this way.

[FIREshrink]

You're overthinking this. Don't use an agent if you don't want. Come to an agreement upon price with a seller. I don't think you're going to find a seller who agrees to link those two facts.