March 13, 2019
Hi everybody my name is Ty Eden, I am a realtor at Exit Realty Redefined at Wheaton Illinois. And I am going to talk about 5 points if you want to purchase a home on your own without the services of a realtor.
About 2 out of 10 homes are sold without the services of a realtor
And that’s true on either of the buy side or the sell side, and sometimes on the both sides. However, if you’re looking to buy a home from a for sale by owner, be careful on the transaction that they don’t take advantage of you because you don’t know if they know something more than you do. Then again you might be smart and know something more than they don’t know.
But you have to be careful of what you don’t know. And for the seller the same goes true, the buyer doesn’t know what they don’t know. Whether you’re buying a home from a realtor or a for sale by owner, MAKE SURE YOU’RE NOT OVERPAYING.
If the home doesn’t appraise out with the appraiser when you’ve made the offer and you’ve made your down payment or put escrow money in. then you are responsible for any shortage that the lender is not going to lend against the house.
Zestimates and some of these other common online estimates of what homes what may be worth or great. But when it comes down again to what the appraiser what going to give you the value of the home for. You better know what the value is when you put that offer in. You don’t want to pay too much for a home. And take consideration the condition of the home as well.
Find out what comparable homes are sold for in the area
You want to make sure that you are not basing your offer of asking price but actual close price. You might have to go to county records where the certificates are filed for the closings to find out what the home is actually sold for or there might be some publications on the newspaper that you can seek out to research that information as well. Or your friendly realtor can very easily look that out on the MLS.
Make sure on your offer that you build contingencies in to your offer. Because if something doesn’t work out through your investigation process you want to make sure that your escrow money that you put down with your offer is not subject to you losing. Often times that it’s a hefty sum of money so that way you the seller’s attention. But you also want those contingencies in the contract so if something doesn’t quite work out with your offer or with the house most importantly that you don’t lose that escrow money and you can get that money back.
Get a home inspection
That can be one of the most important points in the whole process of investigating to buy a house. Don’t go from some arbitrary list, see if you could get a reference, call a friend, do some networking. There is a lot of home inspectors out there but make sure you’ll get a good one.
A real estate attorney
You want to make sure that you hire a real estate attorney, not an attorney that is a general practitioner. You want an attorney that specializes in real estate and that is his main drive. They are not that expensive, from beginning to closing is anywhere to 200 to 500 dollars. But you want that attorney in your court in that way they can help decipher some legal information for you so that way you’ll understand all of the nuances of the contract you are entering in to.
You want to make sure that either the sellers paying for or you’re paying for title insurance. This makes sure that once the transaction is closed, and you’ve actually bought the house. The title to the property clears without any encumbrances. That means liens, other creditors that may have placed liens or encumbrances. Whatever the case may be against the property, you don’t want to find out after you have given up your good hard-earned money. That there is something that the prior owner did not pay and some creditor is sitting there waiting with his hand open, looking for his payment.
Now buying real estate isn’t always easy, that’s why real estate agents are involved and employed. You want to be careful about a lot of points in the process of buying a house. So, I’m just going to point out the disadvantages of not having a real estate agent to represent you.
Without a real estate agent, you are left as the buyer negotiating for that house yourself. And when you get emotionally attached to a home, emotions are going to end up interfering with what your logic is going to be as far as negotiating on the house. That’s where it’s always nice to have a realtor in place because they’re looking at it from more of a disinterested third party but they represent you. And they may have already done hundreds of transactions so they already know what the certain angles are going to be based on trying to negotiate the best price for you on that house that you are interested in buying. YOU DON’T WANT TO NEGOTIATE FROM EMOTIONS.
Unless you’ve actually grown up in the neighborhood that you’re interested in a certain home that’s located in. Your real estate agent or a real estate agent is going to have more working knowledge of that neighborhood.
They can give you all the facts and insights to that neighborhood. So, they may stir you away from that neighborhood because of their personal knowledge or stir you towards the neighborhood because of their personal knowledge. And they’re going to do that based on what your wants, wills and wishes, and your family or personal situation may be. There is something called seller disclosures, without realtor representation your going to act and going to know what the seller disclosures might or might not be. They may give you some of them and then if deficient. Now you’re having to go back to your attorney and he may think that some of the seller disclosures they didn’t want to give up or you negotiated away unless you’ve got a real strong conversation and communication channel with your attorney. So, a realtor can smoke out those seller disclosures upfront in the original offer process of possibly purchasing a property. Without a real estate agent, you might end up having to pay all the closing cost in different areas of the country but more here in Dupage County the seller picks up a majority of the costs and the buyer picks up some costs. if you’re an uneducated buyer and you’re not going to know what your portion of closing costs may be a seller may end up trying to push most of those closing cost on you because they’re trying to save money by not hiring a realtor to represent them in the first place. Why not get you the uneducated buyer to try and pick up most of those seller costs.
Real estate contracts have gotten more and more complicated over the years and without a realtor representation you’re going to be left trying to interpret those contracts.
Now sure you can go to your attorney, he’s not maybe going to just charge you 200 to 500 dollars to interpret those contracts for you so you’re going to be left to have to interpret those. So, a lot of gobbledygook in there, a lot of confusing statements you may not know what applies and doesn’t applies just by reading through it. Unless you’re an experienced real estate buyer. Without realtor representation the most important part is on mortgage you’ve got to borrow money to buy this house or at least most people do. Unless you’ve got a mortgage lender in your back pocket you’re left to try and shop mortgage lenders, you don’t know what’s a good rate, you don’t know what are good terms, more often than not with realtor representation, he’s going to have a variety of lenders that he’s already vetted or she’s already vetted that they know are good lenders. They’ll take you through the proper process and you’re going to get the best rate that you can qualify for, for that transaction. So, you have to be careful and beware of what mortgage lender you get involved with if you’re working on your own inspections. You may not know the different inspections that may be required in the process of purchasing a property. There could be a sewer inspection, there might be signs of a wet basement that you wouldn’t know how to negotiate without the assistance of a realtor or a realtor noticing that the basement has been wet and what direction that they may push you in that can be a negotiating advantage to you.
As part of the overall inspection you’re going to be left to going through the home on your own, without a realtor representation with you, you could always ask the sellers realtor to assist you but they’re obligated to represent the seller, not you. So, they’re not going to disclose things, they’re going to leave it up to you to discover without a realtor representation representing you as the buyer it’s a buyer beware by risk situation. So, you want to make sure that you’ve got, if you can and you’re willing to work with a realtor. Now a lot of new buyers don’t really understand that the realtor cost unless you’re dealing with a for sale by owner. The realtor cost on the buyer side is actually picked up by the seller when the seller signs a contract with their seller’s realtor, there’s enough of a fee in there that takes care of the realtor, the realtor’s brokerage, the buyers brokerage and the buyer’s realtor. So technically there shouldn’t be any money out of your pocket. I hope you found this segment to be beneficial.
Subscribe down here in the subscribe button, We’ll have future videos coming out in the future and with that I want to thank you for your time and good house hunting.
So again, my name is Ty Eden, exit realty redefined in Wheaton, Illinois and thank you for checking in.