Today’s real estate market is one of the fastest-moving in recent history. We witness record-low inventory, multiple offers, and bidding wars in many high-demand neighborhoods. This has led some sellers to ask, can I buy or sell a home without an agent without investing money, if it seems you can simply put a for-sale sign in the yard?
Some buyers believe they would be better off buying a home without an agent. They assume they will get a discount and assume the seller doesn’t pay the buyer agent commission.
We all want to save money. For a large financial asset, it may not always be in your best interest to buy without professional representation. What benefits outweigh the risks (and considerable time and effort) of going alone to get to the closing table confidently.
SELLING YOUR HOME WITHOUT AN AGENT
For Sale By Owner (FSBO)
A “For Sale by Owner” price their home, handles the transaction, shows, and negotiates directly with buyers and their agents. The National Association of Realtors shows approximately 8% of homes sell FSBO.1
One of the biggest problems FSBOs face is the appropriate pricing of the home. Without accurate data on comparable homes, you run the risk of overpriced (which means longer market time) or underpriced homes (leaving money on the table).2
In 2020 the median sales price for an FSBO was 10% less than sold with an agent.1 2018 FSBO homes sold for 24% less than agent represented properties.3 By yourself, pricing and marketing a home leads to potentially greater loss than the costs to pay an agent.
FSBO Responsibilities
Without a real estate expert, it’s up to you to get people in the door. You will gather information for the online listing and put together marketing that today’s buyers expect. You will have to a professional photographer. Responsibilities include writing listing copy, designing flyers, and mailers, or hiring someone to do it for you.
Virtual showings and developing a COVID safety protocol must be offered. As well, you’ll schedule showings for each potential buyer. You’ll be on your own to evaluate offers and determine their financial viability. Knowledge of all legal contracts, contingencies, and ability to discuss terms, including those regarding the home inspection and closing process.
After paying the buyer agent commission, be sure to weigh your potential savings against the significant risks and effort.
Choosing a listing agent saves time, effort and minimizes your risk and liability. Increased profits through a more effective marketing and negotiation strategy make up for the cost of your agent’s commission.
iBuyer
IBuyer offers sellers direct purchases from a real estate investment company.4 iBuyer companies appreciate their convenience and speed, with a reliable, streamlined process that might be attractive to some sellers.
iBuyer wants homes in good condition, desirable neighborhoods, simple flips and fall within the company’s algorithm.
If focused on speed and convenience, an iBuyer may offer an attractive alternative to a traditional real estate sale. iBuyers evaluate a property quickly and make an upfront offer without requesting repairs or other accommodations.
Focused on speed and convenience, an iBuyer could offer an attractive alternative to a traditional real estate sale. iBuyers quickly evaluate a property and make an offer without requiring repairs or other accommodations.
The convenience comes with lower sales prices and fees that can be up to or exceed an agent’s commission. A MarketWatch study found sellers received 11% less, with lower prices and fees considered.5 Studies show 15% more fees and costs are paid than with a real estate commission.6
The alternative to using an agent with iBuyer gives the advantage, the comfort of a quick transaction, and the security of a professional negotiating on your behalf.
BUYING YOUR HOME WITHOUT AN AGENT
Statistics show 88% of home buyers use a realtor in a home search.1 A buyer’s agent is with you every step of the way through the home buying process. Buyer’s agents find the perfect home, submit winning offers, navigate the inspection and closing processes with invaluable expertise and guidance. Buyer agents are no cost to buyers!!
Putting together a winning offer against multiple offers is a challenge. And the buying process can be emotional. A trusted agent can help you avoid overpaying for a property or glossing over “red flags” in your inspection. Buyer agents offer a streamlined, professional process that clients may be more likely to recommend.
Agents will write competitive offers, submit, negotiate, review, prepare documents, communicate with the seller’s agent, lender, inspector, appraiser, title company. They schedule inspections and negotiate repairs. Without an agent, you’re alone.
Sellers pay a buyer’s agent and cost you nothing. You receive fiduciary guidance for an important financial transaction. Alone you play fast and loose with an important financial decision.
IS A REAL ESTATE AGENT RIGHT FOR YOU?
Consider your options if buying or selling a home without a real estate agent. Are you comfortable in real estate transactions, legal contracts, negotiating in high-stakes situations, with plenty of extra time? You may find that an iBuyer or FSBO sale works for you.
Expert advice from a real estate agent in managing the process gives you security and peace of mind.
The diverse services and expert negotiation skills of a real estate agent financially benefit buyers and sellers. The average seller using a real estate agent receives more money than those who go FSBO or iBuyer. 3,5 buyers pay nothing for expert representation to avoid costly mistakes from contract to closing.
NAR’s profile of most buyers (91%) and sellers (89%) is pleased with the representation of their real estate professional and would recommend them to others.1 In terms of time, money and expertise, most buyers and sellers find the assistance of a real estate agent invaluable.
QUESTIONS ABOUT BUYING OR SELLING? WE HAVE ANSWERS
The best way to find out if you can buy or sell a home without a real estate agent or broker is to speak to one. We are here to help you and give you the insights you need to make better-informed decisions. Let’s talk about the value-added services we offer to buy or sell in today’s competitive real estate landscape.
Sources:
- National Association of REALTORS –
https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers - Washington Post –
https://www.washingtonpost.com/business/2020/12/09/factors-consider-when-determining-whether-use-an-agent-buy-or-sell-home/ - National Association of REALTORS –
https://www.nar.realtor/blogs/economists-outlook/selling-your-home-solo-to-save-money-you-ll-actually-make-less-than-you-think - Seattle Times –
https://www.seattletimes.com/business/real-estate/redfin-is-first-major-ibuyer-to-sell-in-seattle - MarketWatch –
https://www.marketwatch.com/story/selling-your-home-to-an-ibuyer-could-cost-you-thousands-heres-why-2019-06-11 - Forbes –
https://www.forbes.com/sites/nataliakarayaneva/2020/03/19/billion-dollar-real-estate-businesses-ibuyer-suspended/?sh=c7f59f921747
