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Market Knowledge

Real estate agents have total access to what’s on the market, and outstanding real estate agents know what’s about to come on the market.  Property listings are for agents only, and they also understand local and state real estate laws.  The beauty of having a real estate agent is that you tell them what you’re looking for in a home and a neighborhood, and they take it from there.  

How’s your negotiation game?

A real estate agent knows exactly how much money to offer on a house and at what point to make an offer. Without an agent, you may pay too much for a house, and you risk getting emotionally involved when a third party isn’t there to help. 

Paperwork!

There is a tremendous amount of paperwork involved in buying a home.  From purchase offers and home inspections to appraisals and escrow accounts, real estate agents help you stay on top of what needs to be done and what to look for during the homebuying process. 

Connections

As with most businesses, knowing the right people can really help.  Real estate agents have relationships with home inspectors, decorators, contractors, and other professionals, making this process much easier and giving you the peace of mind that comes from working with experts.  

Eight steps to purchasing a home without a real estate agent

If you decide to go it alone, here’s a list of steps to guide you through the process of buying a home.

Step 1: Apply for a Mortgage. 

Upon purchasing a house, with or without a real estate agent, the best first step is to get a mortgage pre-approval.   Being pre-approved lets you know your budget, so you aren’t looking at homes outside your financial means.  Pre Approval also shows that you’re committed when making an offer to the seller and that your financing is already in order.

Step 2: Know Thy Neighborhood

When looking for a home, consider what is most important to you.  An excellent public school?  Walking distance to a train or a bus stop?  Make your list, and then get researching.  But don’t just let the computer do the work. Get out there on foot and visit places that fit your bill.  Walk around the town, go to the local coffee shop, check out the school building…if you get a good vibe, start looking into sales.

Step 3: Finding A House

Now that you’ve decided on an area, find out what homes are for sale by going online.  Keep a list of houses that interest you, and remember to honor your budget while doing so.  Once you have your list, you can begin to look in person (or virtually, depending on what’s allowed.)  The owner or the agent’s contact info should be listed online along with information on upcoming open houses.  You can always contact the real estate agent to look at the home privately.  When touring the house, stay aware of the property's condition and everything the sale includes.  This information will serve you well when thinking about how much you want to offer. 

Step 4: Seller’s Disclosure 

Ask for a Seller’s Disclosure.   This is a list of any issues with the seller's home that the seller is aware of. These issues may include mold and water damage, plumbing, heating or electric problems, asbestos, lead paint or radon presence, insect infestations, and toxins in the soil. It also describes any renovations that the seller has done in the house.  

NOTE ON SELLER’S DISCLOSURE

There are varying policies on what sellers are required to tell you legally from state to state.  So, make sure you’re aware of your state’s requirements of Seller’s Disclosures.  On a national level, any seller who has owned a home built before 1978 has to tell buyers about using any lead paint in the house.  If your state doesn’t have any disclosure laws, they will use a “caveat emptor,” which translated from Latin, means “Let the buyer beware.”  This means the buyer must not assume that the quality of a purchase is guaranteed.  Therefore, you should ask the seller direct questions about any issues.  Here’s a list of questions to ask:

• Are you aware of any asbestos in the home?
• Are there any problems with the heating, plumbing, or electrical systems
• Do you know of any issues with the roof, and when was its last repair? 
• Are you aware of any mold in the home?  

Step 5: Make An Offer and Negotiating

When making an offer, consider the cost of other homes in the neighborhood, how long this house has been for sale, and again, its condition.  You’ll often offer an amount that is lower than the money you’ve had preapproved.   This way, you will have somewhere to go in negotiations.

 Once you’ve decided how much to offer, you then write an official offer letter which should include the following:

•  The full address of the home
•  Your full legal name and the name(s) of anyone else buying the house with you
•  The amount you’re offering for the home
•  Any contingencies you’re requesting (i.e., anything that needs to be completed before the sale goes through – most common is a successful home inspection)
•  Any seller concessions you’re asking, such as discount points or cash toward closing
•  A copy of your mortgage pre-approval letter
•  Items you want to be included in the sale, such as appliances or window dressings
•  The date you expect to close
•  The date you want to move into the home
•  A deadline to respond to your offer

Any negotiating will then be done by you and the seller’s agent unless, however, there is no agent.  If the home is being sold by its owner, you will give the letter directly to them.  They can then accept or deny your offer or return a counteroffer.

Step 6: Home Inspection and Hiring an Attorney 

Conducting a home inspection is not legally required but highly recommended.  A good home inspector will examine the house with expert eyes and identify or uncover any issues with the home that the seller may not have disclosed or was unaware of.   

Hiring a lawyer is not mandatory either but also a huge help and provides an extra layer of protection.  However, some states require a real estate attorney to transfer your title and complete your home sale.  

Step 7: More Negotiations

If the home inspector finds issues with the home, you can negotiate with the seller to remedy the situation.

It is within your right to ask that the seller repair any issues before you close.  You can also inform the seller that you will fix the problems yourself but would like reimbursement for any costs.  You may also ask for a discount on the price of the house.  And lastly, if the seller will not agree to any of those, you can cancel the sale.  It’s best to keep negotiations in writing and keep a diligent record of them.  

Step 8: Solidifying Financials and Closing

Upon reaching an agreement with the seller, the time has finally come to close on the loan.  Once the appraisal and underwriting are approved, you will receive a Closing Disclosure from your lender.   This will describe the terms of the loan, cost of closing, and your interest rate, among other things.  Contact your lender to set a closing date when you are satisfied with the contract.  On this day, you will sign your loan as well as other paperwork required for closing, allowing you to become an official homeowner.

Buying a home is a lot of work with or without a real estate agent…but worth it when you find the right home for you and your family!