Purchasing WITHOUT an AGENT?!

Buying & Selling Real Estate
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Purchasing WITHOUT an AGENT?!

Kristen Shook
New to Real Estate · Topeka, KS · Member since 2019 · 34 posts · 6 votes

I am interested in a property that is on the market for 56k. I know the seller personally and she is selling 'for sale by owner' as well as 'as is'. I have spoke to her and she is willing to go down to 53k-54k since she knows me and has already moved into her next home, she doesn't want to continue to pay two mortgages. **Will be my first deal**

Since she is selling 'as is' and there is no room for negotiation (as we already spoke about how low she would be willing to go for someone she personally knows) is a real estate agent really necessary at this point? Would it just be costing us money? I know that I could go to a title company and have a title to fill out then have it approved by my mortgage loaners. She also has a friend who would be willing to help us through this.

Should I contact my agent and see how much they would charge?

What are your thoughts and/or opinions? 

Property is in a good spot of town, 5 minute drive from the local college. 2br with a basement that has room for either 2 additional bedrooms or 1 bedroom and a kitchenette space. It does need a little work (cosmetic) but it is already priced below county value on a 0.19 acre lot.  

Advice?!

Thanks!!

Kristen Shook



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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
6y

@Kristen Shook No, you don't NEED an agent.  There are countless stories here on BP about buyers who went without one and everything worked out just fine.  However, there are also stories where the outcome wasn't as happy.

If you were buying your 10th property and were already comfortable with:

  • Knowing the ins and outs of the neighborhood
  • Assessing the condition and repair costs
  • Coming up with accurate comps (much harder than it looks)
  • Understanding the necessary disclosures
  • Negotiating price, contingencies and terms
  • Writing the contract

I'd say go for it.

But the problem is not just what you don't know.  It's also what you don't know that you don't know.

You could be getting a great deal.  You could also be over paying by $20,000.  Even a real estate attorney is probably not competent to run comps for you - and whatever you do, please don't rely on Zillow, Realtor, Redfin or any other online site.  They cannot take critical details into consideration - like location (backs up to railroad tracks or a freeway) or interior condition (fully renovated vs untouched since 1975).

Are you planning on doing a home inspection?  Do you have a contingency in place for that?  What if your home inspector finds serious foundation issues?  Failing septic?  Major termite damage?  Knob & tube wiring?  Without a contingency in the contract, you're still obligated to buy or lose your deposit. 

BTW, if you don't have a deposit, you most likely don't have a binding contract.  Something of value has to change hands to bind a contract.

Do you have a fully executed P&S in place before spending $400 on an inspection and $500 on an appraisal? I hope so, because if someone comes in and offers that seller another $10,000 and you're not under contract, *poof* - she'll sell it out from under you.

So yes, as a first time buyer I think you need someone to guide you.  A Realtor, an experienced and trusted advisor, a real estate attorney - just someone who knows how to navigate real estate sales.

On paying for a Realtor, we commonly say that the seller pays commissions.  That's because the commission is clearly spelled out in the listing agreement, in advance of the listing.  It's already agreed to. 

However, with a FSBO, there's no such agreement in place. That means that you can expect to pay the Realtor out of your pocket - but since there's no seller's Realtor, you should expect to pay only 1/2 of the going rate.

It's like going for a 30 day hike across northern Alaska.  Can you do it on your own?  Maybe.  But I bet things will go a lot better with an experienced guide.

Good luck!

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  • Kristen Shook
    OP
    New to Real Estate · Topeka, KS · Member since 2019 · 34 posts · 6 votes
    6y
    Originally posted by @Account Closed:

    I purchase property without an agent through direct mail, saves you the 6% always! 

     I am looking to hold onto the property and do some renovations and rent it out... Also just wanting to make sure I do the first deal in a smart way! Thanks 

    0Reply
  • Kristen Shook
    OP
    New to Real Estate · Topeka, KS · Member since 2019 · 34 posts · 6 votes
    6y
    Originally posted by @Karl B.:
    Originally posted by @Kristen Shook:
    Originally posted by @Karl B.:

    My first ever deal I made it a point not to use an agent with the seller (on an expired MLS listing). I used the "you'll save 6% right off the bat if we don't use an agent" line as a negotiating tactic and we settled on $1000 above my opening offer (works for me!).

    People on here say things like, "You need an agent blah blah. How are you going to do a real estate transaction without an agent? Blah blah." 

    No. Wrong. A good real estate attorney is all you need. 

    So when I asked another agent their opinion on this and stated that an attorney could also help, they basically said that the cost for an attorney would be around the same that it would be for the agent.. just trying to get others thoughts and opinions since I'm new! :) Thank you for your thoughts!

    I looked at my closing disclosure from when I purchased without an agent and it cost me $622.50 in lawyer fees. I'm assuming the seller paid roughly the same amount for his real estate attorney. That's cheaper than the 6% agents would take, even for a property selling for around 60K. 

     Gotcha! Did you just find a lawyer or did you meet up and make sure it was one that you felt comfortable with then proceeded with the purchase? 

    0Reply
  • Jeffrey Furtado
    Rental Property Investor · oakville, ontario · Member since 2019 · 25 posts · 21 votes
    6y

    @Kristen Shook I have used the same inspector on all deals. Since this is your first one, use one that has a good 'word of mouth' rating - do your DD to ensure they are competent. 

    0Reply
  • Samantha P.
    Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Kristen Shook

    You just need a good real estate attorney. No agent necessary.

    1Reply
  • Sam AlbertPro Member
    Realtor · Providence, RI · Member since 2016 · 98 posts · 66 votes
    6y

    @Kristen Shook buyer agents don’t cost you a thing. No deal is worth going into unrepresented by an attorney and REALTOR.

    The seller’s REALTOR will always have their Seller’s best interest in mind, not yours.

    0Reply
  • Stephen KeigheryBusiness Member
    Rental Property Investor · New Orleans, LA · Member since 2018 · 716 posts · 555 votes
    6y

    @Kristen Shook I buy direct from seller all the time. You don't need a realtor but you will need a good title company to guide the transaction to closing.

    Home Buyer Louisiana4.853 Reviews
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    0Reply
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