Buying a property without an agent

[Diana Reinfeld]

I’m looking into buying an apartment in Chicago to rent out now and possibly use for myself later. A couple of years ago, we purchased a house in Chicago and worked with a buyer’s agent. I know there are different types of agents and service levels, but I wasn’t thrilled with our agent. We did most of the searching ourselves, and he mainly scheduled showings—we ran our own assessments. He did connect us with a lender, a surveyor, and a lawyer.

This time, we’re planning to pay cash, so we don’t need a lender. We have a clear idea of what we want, and I could use the same surveyor and lawyer.

I’m wondering how much sense it makes to work with an agent in this case—especially considering the commission. Has anyone been through a similar process? What are some pitfalls I should be aware of?

[Jason Zundel]

Diana:  I'm always of the opinion that expert help will go a long way in smoothing a rough road, especially one that you haven't traveled.  In addition, a buyer agent usually negotiates with the selling agent so that the actual commission rate stays roughly the same and is paid by the seller.

That being said, based on the above, this is not too rough a road and not one you are inexperienced with. The only real hurdle is access to the latest and greatest search information and resources that a buyer agent has (MLS services especially), but if you have a friend or otherwise find a connection to leverage that, then you can likely dive right in. If you go this route, I would encourage you to make part of your process negotiating down the price (or points towards interest) based on the lack of a buyer's agent and the savings/increased commission for the selling agent - 2-3% is very reasonable under those circumstances.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.