Buying a home WITHOUT an Agent...help!

Buying & Selling Real Estate
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Buying a home WITHOUT an Agent...help!

Bryson Goforth
Member since 2020 · 12 posts · 3 votes

Alright Bigger Pockets experts, this is my first post and I need some professional advice.

https://www.zillow.com/homedetails/513-Wood-Nymph-Ln-Chesapeake-VA-23323/248592125_zpid/

Looking to make an offer without an agent on this property.

I'm thinking of making the offer at 480k as they plan to list between 500 and 515k. Houses are going fast in this market and especially this neighborhood, and I do not want to insult them.

This will be my second home purchase and I'll be using a VA backed loan. I already own another home in this neighborhood and plan to continue to own it as a rental property.

What are your thoughts/suggestions as to smoothing the process? What is your evaluation of the home?

If anyone has done a deal without and agent and has some wisdom I would be honored to learn.

Thanks to all who have read this far!

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Frank Procopio
Real Estate Agent · Naples, FL · Member since 2016 · 298 posts · 268 votes
5y

As both a broker and investor I can tell you that you should be using an agent. If you are using a skilled agent they have many things that they can do to make your offer more attractive. The seller has already negotiated the commission with their agent so that doesn't offer an advantage to you. The buyers agent cost you nothing, not using one could cost you the deal. 

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  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @Bryson Goforth is there a reason why you don't want to use an agent?

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  • Frank Procopio
    Real Estate Agent · Naples, FL · Member since 2016 · 298 posts · 268 votes
    5y

    As both a broker and investor I can tell you that you should be using an agent. If you are using a skilled agent they have many things that they can do to make your offer more attractive. The seller has already negotiated the commission with their agent so that doesn't offer an advantage to you. The buyers agent cost you nothing, not using one could cost you the deal. 

    13Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Shawn Mcenteer I am not using an agent to save the seller commission and to lower my final home price. I personally know the seller.

    I am interested in what you think is a reasonable price for the offer. What do you think?

    Full disclosure...I plan to get my real estate license within the next two years. This will also be a learning experience for me.

    Any help is appreciated.

    1Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Frank Procopio thank you for your response! I did not mean to make this post about the agent. I am strictly looking at the evaluation and the offer here. The seller is open to a for sale by owner offer from me.

    What do you think is appropriate for the home?

    0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    5y

    I assume the property is not listed yet? Because if it is the commission will be paid, regardless if you have an agent.

    Before you make an offer you should understand fair market value. Nobody on BP can tell you what to offer without that information. Offer less is the default, but thats not helpful.

    Getting licensed for your own deals is silly. I know from experience, because thats what I did. The learning starts after you got your license. I have been an investor mucu longer than an agent.

    If you don't close at least 12 transactions a year you don't know what you are doing and should not practice without a mentor. 25 is proficient, 50+ is outstanding. National average is 7, that's why agents have often a bad reputation.

    4Reply
  • Dan DiFilippoBusiness Member
    Real Estate Broker · Fayetteville, NC · Member since 2020 · 251 posts · 244 votes
    5y

    @Bryson Goforth I said this elsewhere on BP:

    "If you don't *know* how to buy a house without an agent, you probably need an agent."

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  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    Buying without an agent is not difficult at all. the question is does this property even make sense to buy at half a million dollars ? I mean What kind of rent do you expect to get off this house a month

    1Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Dennis Wayne this home would be my personal residence. I own another home in the neighborhood as a rental property.

    0Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Marcus Auerbach you are correct in assuming it is not yet listed.

    Comps are going for 495-515k for this home model in the neighborhood.

    0Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y

    Well,  you are kinda buying with an agent, it's called dual agency.  Probably cost you the same to get with a knowledgeable broker to write up your offer since he'll be your guy.

    Only issue is the listing guy will prob push the dual agency offers since he stands to make more.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Just have a conversation with the seller. Ask them what theyd be willing to sell it for.

    90% of the off market deals I do dont come from making an arbitrary offer, they happen from having conversations with people. 

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  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Russell Brazil Thank you for the response. The selling party says they would list between 500k and 515k with an agent. But they said this is not their FSBO price. By my agent commission quick math: 515k × .06 = 30.9k

    Therefore they stand to walk away with around 484k after commission is paid, assuming it sold for 515k.

    What are your thoughts? What would you offer in my position?

    In the current market in this area, often buyers are paying closing costs also.

    Should I include that offer as well to lock down the deal?

    0Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Steve Morris there is no listing agent. I'm trying to buy a FSBO.

    0Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Bryson Goforth I would say FMV - 3%. You would save $15k representing yourself and seller ends up with same amount. While you're at it, ask for $10k credit back to cover your closing costs. So FMV - 3 % + $10k (with a request for $10k back at closing). That's what I would try to work out if you know the seller. So if FMV is $500k your offer would be $500k - $15k (3%) + $10k = $495k w/$10k toward closing.

    3Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Bryson Goforth

    You could pay an attorney to draft the purchase and sale documents. Would probably be under $1,000.

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  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Brian Gerlach excellent advice. Thanks for the math as I communicate more effectively in numbers.

    0Reply
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @Bryson Goforth why are they looking to sell? Find out there motivation. If they sell FSBO to you and fair market value is 500-515k id start at taking 6% off (assuming 6% is standard commission). You are saving everyone the headache of listing.

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  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    5y

    My own personal style is to always try and get the other side to say a number first.  They may be way lower than you think, or perhaps you will find you are so far apart it makes no sense to try. By using the conversation-first style mentioned above you can also figure out their motivations, things like who pays closing costs, timelines etc may help you guys find a middle ground. 

    1Reply
  • Brian Tome
    Attorney · Worton, MD · Member since 2014 · 274 posts · 195 votes
    5y

    @Bryson Goforth - There is an old saying about being your own attorney.  "The man who represents himself has a fool for a client."  The same should be said about being your own real estate agent.

    I buy fix and hold rentals without an agent because I am offering cash and paying well below market value (like 50%).  I can manage it because I am an attorney, my wife is an agent, and we have lots of experience.  I know the legal pitfalls and the construction numbers.  She knows the market and the neighborhoods.  

    If you are buying the house you plan to live in, and it is close to market value and in move in condition, you should just pay the extra money and use an agent.  It is temping to try and cheap out because you think you will get a better deal, but the reality is that you cannot possibly learn what you need to know for this transaction in one deal.  A Rockstar agent will be part of 20+ deals like this one every year and know all the potential problems as well as the best people to call to inspect for and or address them.  Heck, my wife has saved deals when the financing was going south just by referring her client to a mortgage broker that was savvier than the one they chose.

    The difference in your mortgage (paying $484K or $515K at 3% over 30 years) is about $105.00 a month.  Find yourself a good agent and they will bring you far more value than that.  Then go find a rental property that will cash flow twice as much and focus on making money so you can spend it on the things that make your life better. 

    5Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Nicky Reader I like that approach. That is my plan. Just preparing my numbers for the discussion and making sure I'm not off-base in my evaluation. Thank you for your response!

    0Reply
  • Sebastian MarroquinPro Member
    Real Estate Agent · Pasadena, CA · Member since 2015 · 476 posts · 263 votes
    5y

    @Brian Tome

    Brian is on the money with this one. People are making it all about the agent on here :) for obvious reasons. You obviously want a clear, concise, to the point suggestion, but people are focused on what’s important here, which is representation from an agent. 
    I used to be a personal trainer while getting my masters in Kinesiology and all clients wanted to pay for 2 sessions and learn everything I did in 4+ 2 years in college :) 

    Then I became a realtor and everyone wants to learn everything I learned in 10 years of working with buyers, sellers and investors. There’s more to a purchase than price. Zillow and the internet make it seem as if all you need is an offer price and a timeline. There are about 100 different places to negotiate terms and the transaction. There are about 20 different plates you have to juggle at any given time. If you are reading this thinking I’m exaggerating, it’s maybe because you have experience buying and selling! :) 

    For every FSBO (buyer) that has successfully bought a property, I will show you a seller or buyer that has lost $10k to $100k in the sale or negotiation...

    Honestly, the seller may have way more to lose in this market when it comes to money. 
    now... you wanted some tangible numbers and strategy on here... so here it goes.

    1- negotiate a price with the seller: one you feel comfortable with. Sounds like you want to go with x- 6% 

    So a purchase price of $480k 

    (Anything between $480k and $500k will be a good enough price for you. As the home will appreciate this year in 2021 at least 4% maybe more depending on your market. That’s 20k already etc 

    Once you negotiate the price 

    2- ask seller if they would let you bring in a realtor to facilitate both sides for 4%/ 3% total at the $480k price. 
    (negotiating skills necessary for this :) ) 

    (As you can already see, the seller is losing already: plus in this market they may be able to get a lot more than $500k bc of lack of inventory etc) anyhow...

    * the commission is paid by the seller anyway - and why negotiate the price first. 
    put the liability on the realtor and the E and O insurance (error and omissions) 

    Be tactful, do a walk through of the property, show them comps and put yourself in a position to win while asking them for what they want and what’s important to them. 
    Let them give you a price initially. Even if you start at $500k, you can do your inspections, termite, disclosures etc and then negotiate down. 
    we have submitted offers with investor clients with no contingencies and all cash and then negotiated a $30k to $50k reduction. 
    (by answering to you now, essentially I’m helping you as the buyer... if this was the seller, I would answering in a way different way). 

    In conclusion : 

    I would offer something very close to what they want and then negotiate in a tactful, respectful and strategic way. 
    with a goal of $450k to $480k purchase (depending on physical inspections and potential renovations needed). 
    send me a PM if you like to discuss further 

    0Reply
  • Jason Smith
    Member since 2021 · 109 posts · 130 votes
    5y

    Is the house and lot as nice as 948 Checkerspot Way, Chesapeake, VA 23323 it sold for 515k recently? A more blah house is worth 495k (2219 Beeblossom Ln, Chesapeake, VA 23323). Same size, same rooms, bathroom count. Make an offer for 94% of whatever you think it is worth. No realtor is going to save you 30-100k. Do a termite inspection. Just keep in mind you will have one of the fanciest houses in neighborhood. I would prefer to have a 500k house and be the cheaper house in the neighborhood. Form 600 VIRGINIA REALTORS® RESIDENTIAL CONTRACT OF PURCHASE is online, you can figure it out yourself.

    0Reply
  • Adam Wood
    Member since 2021 · 2 posts · 2 votes
    5y

    @Bryson Goforth, after reading the abundance of sensible responses, this comes to mind. Contact a realtor via referral. Explain that you have a negotiated sale and ask them to handle both sides for a heavily reduced commission. You are putting mo eye I. Their pocket for little of the normal efforts.

    2Reply
  • Matt Honeyford
    Investor · Rochester, NY · Member since 2017 · 206 posts · 175 votes
    5y

    @Bryson Goforth at what price does the property offer a return?

    1Reply
  • Bryson Goforth
    OP
    Member since 2020 · 12 posts · 3 votes
    5y

    @Matt Honeyford this property will be my residence. I own another home in the neighborhood which I rent out.

    0Reply
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