Buying a Rhode Island home with out a Realtor? When
first beginning the home buying process, many home buyers ask "can we deal with this
on our own? Do we really need a Home Buyers Real Estate Agent?" The answer
is yes, you can do it on your own. There is nothing to prevent you, as an individual,
from buying property without professional Real Estate Buyers Agent help. You
can search for homes, arrange showings, and negotiate your own
purchase (although, in Rhode Island, the actual contract for purchase will have
to be drafted by an Attorney). The real question is: do you want to purchase your next home on our own?
There is a common misconception among first time home buyers that using
a Real Estate Agent will require them to pay that Realtor's commission. In almost
all circumstances this is not the case. The commission for the sale of a
home is paid for by the seller, not the buyer. If you went to your local
appliance store and bought a new refrigerator, you wouldn't expect to
pay a commission to the salesperson. The same is true when you buy a house -- it
is the seller that is responsible for
paying to sell the house.
If you do decide to purchase the home on your own, your choices will be limited. The only homes you can buy without Agent assistance are "For Sale By Owner" (FSBO) homes -- a small percentage of the market. All other homes are represented by a Sellers Agent
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These are home owners who have decided not to use a Sellers Agent in the sale of their house. It
may be that they think they can get a higher profit by not paying a commission,
or it may be that there was no Agent who would take their house listing
at the price they demanded. Many Real Estate analysts have found that
the selling prices of FSBO homes are equal to -- or higher -- than those listed
by Agents. A problem arises when, as a "do-it-yourself" home buyer and
without the benefit of a Comparative Market Analysis, you need to determine whether the house is worth the asking price. There is too much money involved to make a
rash decision. In this case, you will need to either obtain
an appraisal to determine a realistic price range for the
property or develop your own determination
of value.
The next mistake that many people make when buying a house, when they find that their choices
are so limited by only dealing with homes for sale by owners, is to jump
into the listed market by checking advertisements and calling Listing
Agents directly or visiting Open Houses. No MONEY WILL BE SAVED
with this strategy (the seller is still going to pay a commission) and
you will end up with no Home Buyers Representation, since the Listing
Agent is required to represent the home seller. See our discussion
on Agency.
It is vitally important that you understand how it applies to you when you
are buying a home.
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A checklist on the advantages of "On Your Own" or With an Agent
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Home Buying "On
Your Own"
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Home Buying With
an Agent
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- You may find a "For Sale by Owner" who
is willing to sell at a reduced price.
- You are
completely in control of the pace and other aspects of the home buying process.
- For good or ill, you are your own home buying representative.
- You can
do your own research, market
comparisons, find inspectors and
closing agents, etc.
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- A
wider choice of properties -- every home that is listed with any
Real Estate Agency.
- lf represented
by a Buyer's
Agent, the availability of a Comparative
Market Analysis to see how the price of the house compares
with the current home market for that specific community.
- An Agent
has experience in negotiations and can offer choices and suggestions
in Home Inspectors, Appraisers, Closing Agents or lawyers, etc.
- The Agent
will follow up on all the details related to the Closing.
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