Purchasing A Home
Should I try to buy on my own or should I use an agent?
As a first time homebuyer you may be wondering if you need a real estate agent to help you find and purchase a home or if you can do it on your own. There is no law that prevents you, as an individual, from buying property without professional Real Estate assistance. You can search for homes, arrange showings, and even negotiate on your own (although, in some localities, the actual contract for purchase will need to be drawn up by an Attorney). The real question may be “do you want to do it on your own?”
There is a misconception among many first time homebuyers that by using a Real Estate Agent they will be subject to paying a commission. In virtually all situations this is not the case. The commission for the sale of a home is paid for by the seller, not the buyer.
Sellers, too, sometimes decide not to use an Agent in the sale of their house. Maybe they think they can get more return by not paying a commission, or maybe they cannot find an Agent to list their home for the price they demanded. In fact, many real estate analysts have found that the selling prices of For Sale By Owner (FSBO) homes are equal to —or higher than— those listed by Agents. In that case a problem arises when, as a “do-it-yourself” homebuyer and without the benefit of a Comparative Market Analysis, you need to determine whether or not the house is worth the asking price. How do you decide? There is too much money potentially involved to make a “seat of the pants” decision. If you’re determined to go it alone, Mortgage Center can help you obtain an appraisal through one of our approved appraisers who we’ve trusted for years to give accurate determinations of property values. Our title company, Mortgage Center Title, also offers the For Sale By Owner Fact Sheet, which offers a wealth of information for both buyers and sellers in involved in an FSBO transaction.
When dealing with a FSBO home, you may find your choices are limited. If you are tempted to jump into the “listed” market by checking advertisements, calling Listing Agents directly or visiting Open Houses, keep in mind that there is not a dime to be saved by doing this. The seller is still going to pay a commission and you run the risk of ending up with no representation, since the Listing Agent is duty bound to represent the seller. If there aren’t enough choices for you in the FSBO market, it is in your best interest to secure a real estate agent as soon as possible to assist you in your search.
The graph below lists the advantages to finding a home on your own vs. with a real estate agent.
| ON YOUR OWN | WITH AN AGENT |
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You can try to find a “For Sale by Owner” who is willing to sell at a reduced price. You are completely in control of the pace of the process. |
A much wider choice of properties—access to every home that is listed with any Real Estate Agency. If represented by a Buyer’s Agent, the availability of a Comparative Market Analysis to see how the price of the house compares with the current market. |
| For better or worse, you are your own representative. However, you can contact the experts at Mortgage Center for assistance at anytime. | Help from an experienced negotiator. |
| You can do your own research and search for your home at your convenience. Mortgage Center can assist you in obtaining an appraisal, providing guidance and information along the way, and coordinating your closing. | Can offer choices and suggestions in Home Inspectors, Closing Agents, etc. |
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The Agent can follow up in all of the details related to the Closing. |
If you decide to use an agent, you should know the difference between a real estate agent or broker and a Realtor®. A real estate agent or broker is a person licensed to negotiate the purchase and sale of real estate on behalf of buyers and sellers. A Realtor is a real estate broker or associate who is an active member of a local real estate board that is affiliated with the National Association of Realtors. In both cases, the Agent, unless specifically disclosed otherwise, represents the seller in any transaction for the sale of a home. It is that Agent’s fiduciary duty to protect the seller’s position at all times.