Is It a Good Idea To Skip the Realtor and Save Thousands in Commissions?

Are you looking to buy or sell a house as efficiently as possible? That’s the right thing to do. We all need to make the most out of our hard-earned money. However, when looking at the standard process, you learn of these middlemen, these realtors, who charge thousands of dollars just to form the connection between you and the other party. The question is, can you skip the middleman and do it directly? If that’s the normal business practice, shouldn’t that be the way to go for buying and selling properties as well?

What’s a Realtor? How Are They Different From Real Estate Agents?

There’s both a little and big difference between Realtors and real estate agents. Let’s start with the latter.

Who are these real estate agents? They are licensed professionals that assist in buying or selling properties, whether they be residential or commercial. There are diverse kinds of agents, but we’ll hone in on the two main types: an agent for sellers and another for buyers. A listing (or seller’s) agent helps people like home sellers to list their properties for sale, and a buyer’s agent serves those that are scouring the market for their dream home. Regardless of which one they are, they are responsible for negotiating with the other party and give you advice on how to get the job done such as making the house look better for marketing or recommending which home inspectors to take a look at your prospects.

Aren’t Realtors the same? Well, yes and no. One thing you might have noticed is that Realtors start with a capital “R”, while real estate agents don’t. That’s because the term” Realtor” is trademarked by the National Association of Realtors (NAR) and is protected by the law. Realtors are real estate agents in the NAR which only accepts real estate agents with an impeccable reputation and makes its members comply with a strict Code of Ethics to forge a well-founded trust with its consumers.

So, are they different? “Not really” in the sense that they have the same responsibilities to their clients, but also “definitely” because they’re part of a group that gives them better credentials.

Real Estate Agent and Realtors Charge So Much! Can’t I Buy or Sell on My Own?

As you might have already known, real estate agents are paid 6 percent commission (on average). That means that if you sell your property for five hundred grand, then that means that the real estate agents, the buyer’s and seller’s, would be splitting thirty-two thousand dollars as commission. That’s a substantial amount of money! If you want to save on that side of things, then here are the things you have to do.

Buying a House Without a Realtor

For those looking to buy a house, you’re going to be your act as a buyer’s real estate agent for yourself. Some of the things you might want to start with are finding real estate attorneys to help you with legal issues, getting a mortgage pre-approval to prove your worth to sellers (and know your budget), and finding your potential dream home, which includes meeting different sellers or their agents. Unless if the seller is also skipping out on an agent, understand that you’d still be paying their agent later on, as that’s a factor you wouldn’t be able to control.

Next, you’d have to investigate on a few variables. Ask for any possible issues on the property and request for a disclosure statement. Also, before getting entranced by an irresistible offer, get a lay of the land and see if the prices you’re being offered are fair compared with the neighboring properties.

Of course, you have to make your offers and negotiate by yourself. This is where your real estate attorney may be needed, as this is more of the “legal paperwork” side of things. When all the offers and counteroffers have settled, you’re going to need that mortgage now. Even if you got a pre-approval, the process might take a few weeks, so keep that in mind as you go along the buying experience.

If you think it’s over once you get approved for the mortgage, you’re not done just yet! There are still some boxes to tick on the list. Find a home inspector and a title company. The first would examine the entirety of the prospect house for potential issues such as leaks, mold, pests, etc., and the title company’s job is to review the title if it’s the real deal.

Once you’ve gotten to know the property a little more, it’s time to renegotiate with the seller. There’s likely going to be an issue with the house that’s going to make you want to decrease the price. If there is stuff to fix, replace, or renovate, that needs to be addressed at the final cost. After that, you just need to close the deal, which is the last step of the transaction. Have your attorney with you to check if everything is all good to go.

It’s not as smooth as it sounds. You might find that each step has its complications. But since you want to save up on a few dollars, you need to put in the muscle to pull it off.

Selling a House Without a Realtor

What about selling without an agent or realtor? You pretty much need to understand the buying process as noted above and add a few steps that are unique to sellers. While there are fewer notes written in this section, it’s going to be less tedious.

To start things off, begin listing your properties on real estate platforms like Zillow, Craigslist, MLS, or others that you’re comfortable with. Look up different marketing strategies to guarantee that potential buyers will be attracted to your property. Such strategies might range from simply taking higher-quality photos, or shelling out some cash to do a major renovation! Marketing is not an easy task. If things aren’t working, then find out what you need to update.

Once the post is up on the site, wait for agents or buyers that will contact you. Don’t make the mistake of assuming that everyone who comes up to you will purchase your house. There is a sea of aspiring buyers that inquire about a home out of their league and lots of inquisitive neighbors that just want to have a deeper understanding of the local gossip. Finding and getting into a conversation with potential buyers or agents are no joke. Formulate a system of questions to know who your real buyers are and try to think of questions that callers might ask of ahead of time. Remember that it’s also on you to do the necessary due diligence or background checks on your buyers.

Lastly, you’re going to be in charge of yourself for showing the buyers around the house, supplying the necessary paperwork, deal with negotiations, and close the deal when things are all settled. These may all sound like an impossible undertaking, but that’s a day in the life of a real estate agent.

Is It All Worth It in the End?

If you’re able to succeed in buying or selling a house on your own, then congratulations! For some people, that has been the start of their real estate journey, as accomplishing that means that you also can have a pie of that “6% commission” pie if you decide to do it for other people. Naturally, you’d have to get the accreditation required, but that’s the first step towards a fulfilling life!

But for others, embarking on such an adventure is one of the worst decisions they’ve made in their lives! Some of you reading this might already be squirming at the terrifying level of commitment it requires, not to mention the risk of making a mistake that can cost you more in the end. That’s why Realtors and real estate agents are treated with such value to the point that their commissions are already included in the purchase price! They have the skillset in assessing the best options for you, know the different resources where you can get the paperwork done, understand the various specifics in your area’s laws, can do the marketing necessary to sell, filter out unqualified buyers, and are equipped with the right mindset for the job.

If you’re out of breath with what you just read, then don’t worry, you’re still at the right place! We from Shorefront Investments can put those worries out. You can give us a call at (850) 713-4866, send us an email, or fill a form on our front page!