If buying an investment property that is FSBO, is it worth the extra 3% to have a realtor involved as opposed to simply a lawyer ? Likely this depends on the complexity of the property, but this one is a 2 unit 130k not too fancy property is in small town.
lawyer and broker do two distinctly different things in a lawyer closing state.
realtor will do your contract but also make sure you have your DD time lines and follow them.. help with home inspection and whats normal and what is not.. things like that.
lawyer simply does the closing .. they are not at the home inspection or working with your mortgage lender other than in a closing capacity..
its not necessary to have an agent and if its a FSBO some agents will work on a flat fee to run the paper work not a % fee.
This is entirely dependent on your experience level. You dont have to use a realtor ever. Most people will find a benefit though if they are using a good realtor. However you also need to consider that the bottom 95% of agents are only doing about 4% of the business in the market. With those, you likely wont find any benefit. Using a good agent is where you will find a benefit if any.
It just depends on what you are comfortable with.
1. No agent you can get a lawyer to draw up the contract. Escrow to close and you get inspections on the property, general home, termite, roof, maybe a HVAC.
2. Go with an agent you can negotiate a price of less than 3%. When my clients find their own FSBO and want me to walk them through the deal we negotiate a fair compensation for my time and expertise. Commissions are always negotiable.
Quantitatively 3% of 130k is not a lot. If the median household income in this rural town is 47k, what would you suggest I attempt to negotiate regarding commission for a Realtor ? It’d be a cash deal, with inspection.
If I was new I'd definitely obtain a quality buyers agent and compensate them myself. 2% instead of 3% probably unless they want to spend 6 weekends driving me around like a typical buyer.
A lot of FSBOs have blind fear of realtors, so ensure them you are paying for it.
The agent will have market knowledge and contacts for inspectors, title co, tradesmen, etc. Also won't hurt having a relationship with a good one that may bring you future deals.
A realtor that is truly an expert in New York real estate contracts and has strong negotiatiug skills will be worth their fee. They will know the best inpectors and contractors in your market. Lean on their expertise to find out exactly the condition of the property to negotiate repairs and final sales price accordingly.
@David R. Great comments already, so I just wanted to add that if this is your first investment deal you are probably better off just paying for the agent by yourself, so that way you are ensuring a smoother process from start to finish.
As you mentioned, from a quantitative perspective, the amount isn't going to break the bank...