Anytime an individual or family purchases homes using a real estate agent, they are giving up 6% to 7% of the total price of the home for the transaction. Generally, a real estate agent charges the homeowner 6% to 7% commission to sell the home. Sometimes, the additional commission on top of the price of the home makes the overall cost too high to be affordable.
However, finding homes that are being sold without a real estate agent, you will likely find a higher quality of home for the same price. Many homeowners work as their own real estate agent as a way to avoid the cost. Many buyers believe that they need a real estate agent to help them with financing and closing. However, this is not true.
Consider getting pre-approved for home financing before you spend any time hunting for a new home. Once pre-approved, the bank or lending institution will offer a pre-approval letter that you can show during escrow. Instead of using a real estate agent purchase contract, you can locate one online for free, or find a standard real estate purchase contract at your office supply store.
Next, make a full list of all of the amenities and features that you are looking for in a home. Scour the classified ads, Craigslist, and online for homes in the area that are being sold without a real estate agent. Make sure that every home you look at has at least a large portion of the amenities and features you want.
With your pre-approval in hand, you can reach out and make contact directly with the seller. Speak to them one-on-one, and explain that you are interested in purchasing the property, and have already been pre-approved for a loan.
Listen to exactly what the seller is saying to figure out their specific situation. Ask them to specifically state how much they are looking for in the price of selling their home, and how much they need to get out from under it. With that information, you can make the right offer to the seller, before showing them how much money you have been pre-approved for the loan.
Make sure that the offer includes closing costs, purchase price, assistance with a down payment, and any other considerations and concessions of the seller. Next, write up the contract. It is usually the buyer that chooses the title company to handle the escrow and closing. This is because it is usually the buyer that is required to pay the title insurance.
As part of the purchase agreement be sure to include a “backout” clause, to allow a property inspector to fully evaluate and assess the home. After the inspection, be sure that everything is okay, before going ahead with the closing. If there is anything that needs to be fixed, repaired, or replaced, be sure to add an addendum to the purchase contract.
All that remains is closing on the house, before the closing escrow agent hands you the keys. You have just save 6% to 7% or more on the total price of the home without using a real estate agent.