Tips On Buying A House Without A Realtor

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If you're in the market for a new home, now might be the best time to buy. Though there is always plenty of anxiety and speculation about how the housing market is currently doing, all you really need to know is that doing your research goes a long way. For example, whatever you may have thought about buying a house with a realtor may not actually be true. In fact, buying a house without a realtor is doable and comes with many of its own benefits. In this article, we'll walk you through why buying a house without a realtor might be your best next move, plus offer 8 pro tips that will ensure the whole process goes smoothly.  

Today's Housing Market

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According to a recent post by Forbes, the housing market is expected to "further weaken" throughout the rest of this year and into next. While home pricing has experienced some appreciation over the last year, professionals do not expect this to last. However, the housing market is not expected to soften is nearly as much as previously thought. This falls in line with a recent report by Realtor.com, which states that the housing market is actually likely to be stronger than previously predicted. In short, while the market is softening a bit from last year, it is stronger than most experts projected. So, what does that mean for you?

In laymen's terms, home sales are expected to rise, and prices along with them. This is due to lower mortgage rates, which make homes much more affordable for potential buyers. Previously, Realtor.com experts expected mortgage rates to climb to 5.5% in 2019, but the reality is that they have stayed around 4% and don't appear to be shifting too drastically any time soon. In fact, economists predict that rates will rise to just 4.5%; a whole percent lower than what buyers were expecting.

Still, the housing market this year and next is best described as "lukewarm" by some economists. While the higher prices are leading to higher sales than expected, some home sales will still decline nationwide.

Advantages Of Buying A House Without A Realtor


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Now that you have a clearer understanding of how the housing market is currently looking, what does that mean for you? If you're looking to buy a home, chances are you haven't considered doing so without a realtor. There are tons of real estate agencies and agents out there, making it seem like the use of this resource is the only way to buy a house. 

This may ring even truer when you learn that, in any given year, only about 10 to 20 percent of home sales are completed without a realtor. This statistic should not scare you away from buying a house with a realtor, though. As mentioned, this option is totally doable and even advantageous, even if it's not exactly the easier or more popular choice.

Before we dive into the advantages of buying a house without a realtor, you should ask yourself a few questions first. Realtors exist for a reason--they have certain skills for selling houses and matching people with the right home, and that may not be a resource you want to totally pass up. Ask yourself the following questions to get a feel for the work ahead of you:

  • Can I thoroughly read the fine print on any and all documents?
  • Can I stay unbiased in my research?
  • Can I execute tons of (often tedious) research?

If you were able to answer "yes" to these questions, then you're in the right place for sure. With that squared away, let's look at some advantages of buying a house without a realtor.

You'll Be Fully Informed On Every House Search And Trend

Without a realtor to do the work of flipping through pictures and profiles of possible homes, the responsibility falls to you. While it may feel a little tedious to thoroughly research local trends, marketing values, and other vital housing information, doing so yourself is really a labor of love. In fact, doing this task yourself means that you'll be fully informed on all housing trends and market values. This means no information will be withheld from you or spun to sound positive when it might not be. In short, you won't be in the dark about anything because you did all the research yourself!

You'll Have Valuable Neighborhood Knowledge

Knowing the neighborhood you plan to move into is important for many reasons. You want to know if you and the location are compatible. If you have children, you want to ensure that there are schools, other children to play with, and family-friendly activities and locations nearby. If you're living on your own or with a spouse or partner, you want to know how your neighborhood caters to that demographic. If you're moving in with some roommates you want to know if the new neighborhood fits your lifestyle, whatever that may be.

While it may be hard to know exactly what a neighborhood is like before you live in it, there is still a lot of useful research you can do. You can visit the neighborhood in person, begin spending time at local spots and hangouts, and, of course, utilize the internet. Sites like Yelpare basically built for this type of research!

You Get To Make Your Own Offers

Here's where your research really comes in handy. Making an offer can be daunting, but it can be done on your own. Be sure that you are well-informed on all points of the sale and be sure to compare prices before going into any deal. Finally, rest assured that it's okay to politely reject a price and counter with another. You have the power and your seller wants to do just that: sell.

You Have The Satisfaction Of Knowing All The Ins And Outs Before You Sign

While a realtor would typically go over all your paperwork and know what it means, that doesn't mean that you cannot do the same thing. For best results, however, we do recommend hiring a real estate attorney to look over documents with you to make sure everything is legitimate and on the up and up. While you can do this yourself, you must understand that there are some things you can miss if you aren't trained to catch them. You'll know all the ins and outs before you sign anything, and you'll have a second opinion to boot.

You'll Save Some Money

Of course, how much money you'll save will vary; but it's true that skipping the cost of a real estate agent will keep some money in your pocket. When buying a home for sale by owner, you have to be aware that the owner may have fees of their own. Always be careful when completing a transaction with an unrepresented seller!

You're Forced To Be Absolutely Sure Before You Make Any Decisions

Finally, when you buy a house without a realtor, you're helping yourself to make the most informed decision of your life. Buying a house is no small thing, and doing so lightly is not an option without a realtor. When you buy without an agent, you can be sure that you'll have done all the necessary research and then some. What's more, you're more likely to have really thought about this decision from every angle:

  • Am I really ready to buy a house?
  • Is this the right neighborhood for me?
  • Is this the right neighborhood for my family?
  • Is this the right house for my/my family's needs?
  • Could I have found a better deal?
  • Did I exhaust all my resources?
  • Am I happy with my neighbors?
  • What if I want (more) pets?
  • What if I want (more) kids?
  • What if I want to move again?

There are tons of questions that you'll ask yourself, so try not to get too overwhelmed. In the end, buying a house without a realtor is a good inspiration to be as careful and intentional as you can possibly be with this important choice.

8 Pro Tips You Need To Know When Buying A House Without A Realtor



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1. Make A List Of Everything You Want, Including Non-Negotiables And Negotiables

Before you start the process of buying a home, you have to think about the type of home you want. Sit down and make a list of what you want for yourself and/or your family and allow this to guide your search.

2. Research Comparable Home Sales Before Making An Offer

Always research how much comparable homes have been sold for before you make an offer. The prices found on active listings are not usually indicative of home value, so be sure to do some in-depth research before making any moves.

3. Build Contingencies Into Your Offer

Make sure to build contingencies into your offer when you finally make one. You may need to cancel your contract for a number of reasons, so take action and now and work that into your offer. If things are not to your satisfaction, you don't want to be locked in and potentially lose money. Drawing up a safe way to cancel your contract is one of the best things you can do when working sans realtor.

4. Ensure You Have A Title Insurance Policy

Make sure that either you buy a title insurance policy or that the seller pays for one. This adds an extra bit of safety during your transaction and ensures that your money is protected. Be sure to get a clean title that does not come with any liens and encumbrances.

5. Hire A Real Estate Lawyer

This is an expensive tip, but a valuable one. The typical real estate lawyer will charge between $200-$500 to review your contract and offer advice, but it is worth it. As mentioned, there are just some things you may miss if you're not trained for them. Take the extra precaution and hire a real estate lawyer.

6. Consider Your Income

Before you can buy a house, be sure to consider your income. Most banks will require that your monthly costs do not exceed a certain percentage of your income. If your monthly costs do exceed this number, you may not be able to afford the home you have your eye on.

7. Think About Your Debts

In addition to considering your income, you must also think about your current debts. Maybe you have student loan debt, maybe you're paying down a car, or maybe you have medical bills to think about. This doesn't mean that you shouldn't buy a home until these debts are gone, but it does mean you have to think about the total monthly payments on existing debts.

These payments will be impacted by your new mortgage payments, which can affect the percentage threshold determined by your bank. In short, your debts might mean that you can't afford certain homes - keep this in mind as you search for potential places.

8. Save For A Down Payment

Whether you're buying a house without a realtor or with one, pretty much all mortgage loans and lenders will require a cash down payment of some sort. How much money you set aside will determine the type of mortgage you qualify for, so do some research while you're saving. How much you can put down will also affect how much you can borrow from your bank, so keep this in mind as well. This goes hand in hand with considering your income and debts so that you know just how much money you have available to get the home-buying process rolling.

Conclusion


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We hope these 8 pro tips will help you as you begin the process of buying a house without a realtor. Though it will be difficult in some ways, working without a realtor is not impossible. As you can now see, it is advantageous in many ways and comes with a lot of benefits and satisfaction. In the end, buying a home is one of the biggest moments of your life, so be sure to be present, to be aware, and most important of all, be discerning. Happy hunting!