Buying house. No realtor. What do I need to know?

[Indexer]

Mustacians, I believe I saw this in a thread before, but I had a hard time finding it with the search tool.

I'm considering buying my first home. I have a sizeable down payment, I'm tired of paying rent, and I don't see myself relocating in the 5 years.

I have talked to a mortgage company and been preapproved for an outrageous amount, but of course I plan on spending far less ;). The seller hasn't listed the house with a realtor, and I don't have a real estate agent yet. I planned on using the fact that neither of us are using a realtor as a negotiating tactic. They will save the 6% they would pay a realtor, and it just so happens 6% less than their asking price is what I planned on offering anyway.

My question is what an I getting myself into not using a realtor?  I deel with contracts everyday so I'm fine printing off a purchase contract and signing it in front of a notary. I know there needs to be an inspection, an appraisal, and a closing. How important is a real estate agent for any of this?

Thank you!

[DebtFreeBy25]

Mustacians, I believe I saw this in a thread before, but I had a hard time finding it with the search tool.

I'm considering buying my first home. I have a sizeable down payment, I'm tired of paying rent, and I don't see myself relocating in the 5 years.

I have talked to a mortgage company and been preapproved for an outrageous amount, but of course I plan on spending far less ;). The seller hasn't listed the house with a realtor, and I don't have a real estate agent yet. I planned on using the fact that neither of us are using a realtor as a negotiating tactic. They will save the 6% they would pay a realtor, and it just so happens 6% less than their asking price is what I planned on offering anyway.

My question is what an I getting myself into not using a realtor?  I deel with contracts everyday so I'm fine printing off a purchase contract and signing it in front of a notary. I know there needs to be an inspection, an appraisal, and a closing. How important is a real estate agent for any of this?

Thank you!

Since you've already found the property you intend to buy, a realtor would be of little use to you. I bought my second home without a realtor. We did not need to have a formal inspection, but unless you know what to look for and can DIY, I suggest paying for one even if it's not required. I would recommend that you have your purchase contract drawn up by an attorney. An attorney can also handle any escrow funds and ensure the title is properly transferred.

[FrugalFan]

We bought and sold our first house without a realtor. We just used lawyers (which you would need anyway) and they got all the paperwork ready for us. We had no idea what we were doing the first time and the lawyers made it really easy. And of course a bank for the mortgage. Definitely get an inspection too.

[frugaliknowit]

Make sure you either:

1.  Have an attorney approval rider (maybe over a 5 day period), so an attorney has time to review and negotiate changes to the contract.

2.  Agree on price and terms verbally, or with a "letter of intent", then have an attorney draw up the actual contract.

[NoStacheOhio]

If you find a title company that specializes in FSBO/no realtor transactions, they can help you as well.

[jeromedawg]

Just a side question regarding lawyers vs realtors. I have a friend who is both a lawyer and realtor. She works for a realty and helped us with our first place. Is it more lucrative to be a realtor in addition (e.g. commission?) whereas if you were just a lawyer helping someone you'd presumably get paid by the hour to come up with the paperwork for them.

And if we were looking for a different place, would it be awkward to ask her just to help with the paperwork/escrow so we can avoid all the realtor fees? In that case, would it be best just to find a lawyer who is not a realtor as well, to avoid potential conflicts of interest?

[DebtFreeBy25]

Just a side question regarding lawyers vs realtors. I have a friend who is both a lawyer and realtor. She works for a realty and helped us with our first place. Is it more lucrative to be a realtor in addition (e.g. commission?) whereas if you were just a lawyer helping someone you'd presumably get paid by the hour to come up with the paperwork for them.

And if we were looking for a different place, would it be awkward to ask her just to help with the paperwork/escrow so we can avoid all the realtor fees? In that case, would it be best just to find a lawyer who is not a realtor as well, to avoid potential conflicts of interest?

Yes, a lawyer is paid by the hour or a flat fee for drafting the contract. Having a lawyer draw up your purchase contract is, therefore, less expensive for almost all property transactions. (Theoretically if the property cost was very low a realtor could be cheaper.)

I would advise against asking your friend to do only half of the job. Even if you do all the work of finding a property and making an offer yourself, it still make appear as though you're looking for a big discount. Also if you're not an experienced buyer and skilled negotiator, using a realtor may benefit you from a cost perspective (access to more listings, more experience with market values, more negotiation experience, etc.). I've bought both with and without a realtor (and also sold with) and am glad I used a realtor to buy my first home.

[Green_Thing]

Realtors are great for one thing when you are buying and selling. Price checking. They can help you negotiate. But you still have to be in the driver's seat. If you don't ask, they won't do. If you are very, very confident that the price is right, roll with it.
I've bought and sold two houses with a realtor and bought one house FSBO. Not much more difficult to do it FSBO.
Ahhhh, one other thing realtors are good for. Insulating you from the other party. In the FSBO purchase, seller was 7 months pregnant and very anxious about the sale coming through on time. I spent a hour while driving across Wyoming, talking her down off the ledge. While not admitting my own anxiety about the sale. Whoo that was fun.