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What Happens If You Buy Directly From A Seller Vs Working With A Real Estate Agent
WHAT HAPPENS IF YOU BUY DIRECTLY FROM A SELLER vs WORKING WITH A REAL ESTATE AGENT
I was reading a message board recently where a buyer asked what happens if you buy directly from a home seller instead of having a licensed agent represent you.
First of all, if you have to ask that question, you should have representation because it’s clear you don’t know what’s involved in a real estate transaction.
I don’t mean to be harsh yet this blog is about open, honest, and transparent communication… and too many novice buyers, and I say “novice” and not just “first time”, think they can do the entire thing online as if they’re utilizing Kayak to book a trip!
In this particular instance, the individual stated that, “the seller said he could write up a contract and that I’d need money and property taxes upfront.“The buyer further stated that, “I understand needing money up front but I don't understand the amount for property taxes. [The Seller] quoted the cost of property taxes for two years.”… and the buyer wants to know if he should tell the seller that he knows the seller is trying to put one over on him!
I think the seller knows what we all know… that this buyer has “SUCKER” stamped on his forehead.
Listen… it’s not a sign of weakness to seek out professional advice. Do millionaires file their own taxes? No… they hire a licensed CPA. Do millionaires invest without guidance? Not many… most work with a CFP. Do millionaires do their own estate planning? No… they hire an estate attorney and sometimes a tax attorney. Do millionaires buy their own homes on their own? No.
Millionaires know their strengths and their weaknesses and they hire people who are strong where they’re weak.
Buying a home is not like buying a car. The processes are completely different and the money involved is on another level all together. The average home is 10x-20x the cost of a car… and it’s not always about the amount paid for something… it’s about the stuff you don’t know. The novice buyer doesn’t know what he/she doesn’t know.
It’s one thing to stumble through a $1000 transaction like an HDTV. The stakes aren’t really that high. It’s another thing altogether to stumble through a transaction where you’re guaranteeing to make a payment that’s a significant percentage of your monthly income every month for the next 30 years.
Since hiring a buyer’s agent is free to the consumer, why would you consider going it alone without professional guidance? Even if your agent is terrible, that agent is still very likely much better at the process of buying real estate than you are. Heck, I played college basketball and I was pretty good… and yet I can’t hold a candle to the lowest level bench player in the NBA… the one that hops from team to team on 10-day contracts.
I know it’s popular to say that all agents are the same. Heck, I’ve gone on rants about poor agent standards. However, all that aside, do you really think you’re qualified to enter into a binding contract for hundreds of thousands of dollars alone? Is it something you do all the time? Do you really think that potentially saving yourself a few bucks now is worth the risk?
I’ve been in your shoes. About 15 years ago, before I considered obtaining my license, I took advice from a friend who owns a few rental properties. He told me, “You don’t need an agent! All you need is a napkin and a pen.” Worst advice I ever followed! Truthfully, the risk-reward isn’t worth it. Hire a professional and do it right the first time.
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