Buying Solo or With Help?
You’ve been visiting Lake Tahoe your entire life. You know it like the back of your hand because it’s like home to you. You live three hours west, but you’ve grown tired of having to rent a hotel for the weekend warrior trips you commit to throughout the year.
Or, Tahoe is home to you. You’ve put in the mandatory years of full-time residency to become a true “Tahoe/Truckee local,” yet you’re still renting. Not only are you renting, but you’re living in constant fear of being evicted so your landlord can Airbnb the place that you and your dog have called home for three years. You’re forced to continuously post in the Truckee/Tahoe Facebook page to scrounge up a rental that fits your budget and allows pets.
Either way, it’s time to buy. But where do you start? Real estate agents can be tough — they’re flakey, they’re too sales-y and, hey, you can do it on your own, right?
Everyone naturally strives to save money on all purchases. When it comes to buying a house, paying a realtor’s commission can seem daunting and expensive, so should you do it?
Let’s play a little game of true or false.
Keep in mind that, yes, I am an active agent, so my answers may lean toward hiring representation. I’ve witnessed a good friend become waist deep in legal proceedings over real estate litigation, and I’d imagine everyone has something better they’d like to be doing than sitting in court.
1) If you’re buying a property without an agent, you’ll save money because you won’t pay the realtor’s commission: False.
When the listing/selling agent (the real estate agent representing the sellers) has the listing agreement signed, the seller and realtor agree on a commission amount. The commission total is split between the buyer’s agent (the agent representing the buyer) and the listing agent.
Meaning the seller typically, unless otherwise agreed upon, pays both realtors’ fees. Which means that as a buyer, you don’t pay any additional money out of pocket to have a real estate professional on your side.
The fee obtained by agents, which is based on a percentage of the total home cost, can add up to thousands of dollars. For that money, a potential homeowner gets days, weeks, and in our Truckee/ Tahoe market, months of service and guidance from a housing professional.
2) If you don’t use a real estate agent, you won’t need to pay out of pocket for attorney fees, legal advice, or inspections: False.
Regardless of whether or not you as a buyer/seller hire a real estate agent to guide you along the journey, you’ll need, at the very minimum, to hire a legal professional to oversee the paperwork. When buying or selling a home, you’re dealing with multiple legal contracts, and taking this on without professional guidance may be risky, even if you’ve had significant experience.
Buyers are advised by a real estate professional to have inspections done on the property before signing off on contingency removal.
A home is one of the most important purchases a person will make in his or her lifetime, so why not ensure that it’s fully inspected? A home inspection is an inexpensive way to ensure your dream home doesn’t have leaks, faulty wiring, or plumbing issues. This inspection is an all-encompassing way to discover the true condition of the property you’re purchasing.
When using an agent, these inspections are not required, but come highly suggested. Meaning, if you want to cut costs on an inspection and opt out, you can do so with or without an agent.
3) You need a real estate agent to pull comparable properties (aka “comps”) to determine whether or not you’re paying fair market value of the home: False.
We live in a world overflowing with technology, meaning any answer you desire is essentially available at your fingertips. There are plenty of websites available and directed toward buyers working on their own.
To determine fair market value of a home, you’ll need to research homes recently sold, homes that are pending/contingent (meaning they are currently in escrow), and homes actively for sale. These websites are updated through individual MLS’s (multiple listing service) regularly.
I was in Vietnam last month, and it was my first time visiting that beautiful country. When I arrived in the crowded, busy, and intimidating streets of Hanoi, I was faced with a decision: Do I a) navigate on my own and do my best to find the hot spots? or b) hire a professional to guide me to those hot spots?
The guide was complimentary with our hotel stay, but still, I could do it on my own, right? Wrong. I tried it on my own and couldn’t get anywhere I planned on going.
Only after engaging a professional did I realize how much easier it was to have an experienced guide on my side.
If you do decide to fly solo, my main suggestion would be to do your homework. This will prevent you from overpaying for a property, overlooking crucial inspection findings, and dealing with legal repercussions down the line.