How to Be Your Own Realtor
Buying a home without an agent might seem intimidating and nearly impossible if you’ve never done it before. The truth is, you can easily be your own realtor, as long as you pick up the right knowledge at the right time.
Going into a property purchase without an agent will save you a ton of money on commissions, which is in itself a great plus. On top of that, you will learn all the tips and tricks you need to know to successfully purchase real estate properties and repeat that process indefinitely to build up your wealth.
So, if you’d like to give this adventure a shot, here’s what you should know before you get started!
Things to Keep In Mind
#1 You Won’t Have As Much Market Knowledge as a Realtor Would Have
The main obstacle at the beginning of your journey as your own realtor is going to be the lack of knowledge regarding markets and areas. While it is possible to learn everything there is to know about a market, keep in mind that you won’t have access to real estate property listings the same way real estate agents do. If you opt to go at it without an agent, you will have to do plenty of research to find suitable properties within your budget.
#2 Negotiations Can Be Challenging at First
Without an agent, you’re going to have to negotiate for yourself. Real estate agents are negotiation experts and, without one, you will have to learn negotiation tactics on your own. While this is completely doable, it’s going to be challenging at first - you might make mistakes such as overpay for your first property or lose out on the one you wanted.
#3 There is Going to Be a Lot Of Paperwork Involved
The most daunting part of the entire process is all the paperwork you have to handle on your own. You will have to learn how to draw up a purchase offer, read inspection reports, and finish all the paperwork regarding the transaction. If you’re up for a challenge, this is going to be a tough one!
#4 You Might Not Have as Many Connections as an Agent Would
Last but not least, keep in mind that you won’t have as many connections as a real estate agent would have. However, as a member of the real estate community, it’s inevitable for you to make connections as you go through the process of purchasing a property. At first, it might be challenging to put all the pieces together if you don’t have the right connections with contractors, home inspectors, and other third parties.
How To Buy A House Without A Real Estate Agent
Now that you’ve decided to be your own realtor, here’s a step-by-step guide on how to do it:
Step 1: Apply For A Mortgage
Your first step should be figuring out the financing for your investment, that is, applying for a mortgage. You first have to get a mortgage preapproval to show sellers you are a serious player in the game. Once you’re preapproved, you will know what kind of budget you have at your disposal.
Step 2: Research The Neighborhood
Next, look into the area you’re considering to invest in. The information you should be looking for includes the average selling price, living costs, nearby amenities, access to public transportation, access to public schools and medical facilities, and other amenities that can help increase your ROI when you decide to sell or rent out the place.
Step 3: Find A Property
Perhaps the most challenging part of becoming your own realtor is finding the right property in your desired neighborhood. Here are a few tips: always look for homes within your budget and create a list of potential properties that could be a good fit for you. Then start contacting agents to request tours of the properties you’re interested in. You may also contact homeowners if you decide to search off-market. Lastly, make sure to assess the condition of the property during the walkthrough to be able to determine whether it would be a good investment or not.
Step 4: Ask For A Seller’s Disclosure
A Seller’s Disclosure is a list of known issues with the home. Seller’s Disclosures may also let buyers know about the remodeling work the seller did on the home. It is important that you ask for a seller’s disclosure to get a better insight into the history of the property and the potential issues you may run into if you decide to renovate. The seller’s disclosure should outline detailed info on structural issues, plumbing, heating, and electrical systems, water damage, presence of lead paint or asbestos, as well as any other concerns that may be related to the property.
Step 5: Make An Offer
Once you find a home and are satisfied with its condition, it’s time to make an offer. This is a tricky step because you will most likely have to negotiate your way to the right deal while competing against other bidders. When choosing how much money you’re going to offer, consider the prices of other homes in the area, how long the home has been on the market and the home’s condition. Generally, you’ll want to offer lower than the amount of money you’re preapproved for so you can have some room to negotiate.
Step 6: Negotiate
It is a good idea to hire a home inspector to check and assess the condition of the property. You can use the inspector’s findings to further negotiate the deal. For example, you can ask for repairs or reimbursement for the cost of repairs, you can also request a discount or choose to cancel the sale altogether if you can’t agree with the seller.
Step 7: Finalize Home Financing And Closing
Once you finally reach an agreement with the seller, you will have to close on the loan. Your lender will send you a Closing Disclosure that will state the terms of the loan, interest rate, and closing costs, among other details. If everything goes well, you will schedule your closing date, sign the loan and officially become the owner of the property.