If you’re preparing to sell or buy real estate you’ve probably wondered whether or not it’s really worth it to hire a real estate agent. It’s a tempting idea, especially when you consider what you could save, but the cons of excluding a realtor from the equation are not always as obvious or apparent at first glance. We’ve compiled the pros and cons of selling and buying real estate without a realtor in order to help you make an informed decision.
As the seller, not hiring a realtor means you avoid paying their commission. Typically, the commission is about 6% of the home’s sale price and is generally split two ways (3% each) between the buyer’s realtor and the seller’s realtor. If the seller doesn’t hire a realtor they save 3%. If the buyer also didn’t use a realtor, then the seller saves the full 6%.
Whether you’re a seller or a buyer, real estate transactions are chock-full of important life lessons. When you act without a realtor, you open yourself up to all of these learning experiences. Over time, you’ll learn from your mistakes, and you’ll become a more savvy seller and buyer throughout the process.
Sellers and buyers will both find that it is much more difficult to gain access to marketing resources without a realtor. These marketing resources would help a seller to reach the right buyer, and help a buyer to find what they’re looking for.
Without a realtor, you won’t have a person with the proper background in properly valuing a real estate property. This affects both buyer and seller. As a buyer, you won’t have the right person advising you on what a property is realistically worth despite its asking price. As a seller, you will likely be asking too high or too low. The chances of putting together an accurate asking price are slim to none.
Sales negotiations are a tricky business and are only made more complicated when you attempt to finalize them without a realtor. Often times, emotions run higher, and the deal becomes too personal. This leads to unrealistic expectations on both sides, and it’s often the reason why real estate transactions without realtors fall through.
A realtor has been professionally trained and has the right experience in drafting legally sound documents such as contracts. Drafting your own contracts is a huge gamble, and could lead to legal fees that cost more than you saved in commission costs.
Liabilities & Legalities
Realtors are required to take specialized courses that inform them about what issues are related to finalizing real estate transactions. Among these issues include an extensive background in real estate law. This makes them your best source for explaining your legal obligations and liabilities are, and how to avoid them. Don’t be surprised if, in addition to your legal fees for unsound documentation, you’re also paying legal fees for liabilities you weren’t aware of.
In a perfect world, buying and selling real estate would be painless and always result in a happy ending for both parties. However, whether you’re new to real estate or you’ve been dealing in real estate for years, you probably knew coming into this that, unfortunately, it’s almost never as simple as we’d hope…
Clearly, you’re someone who wants to be a well-informed buyer or seller, because you’ve taken the time to read this post. However, the only way to be informed enough to buy and sell a property without finding yourself in the various real estate pitfalls is to be a real estate agent… or to hire one.
If you want to be the most informed buyer and seller you can be, hire someone who can share their knowledge and experience with you.
We hope that this has helped you in your research, and we’re always here to offer further advice and consultation in real estate matters.