Save Money when Buying a House
What happens when you buy a house without an agent and use an attorney instead? It’s been obvious to me for a long time – you save a lot of money. Like tens of thousands of dollars, depending on the price of the house. Most buyer’s agents are paid 3% by the seller. A real estate lawyer costs $2500 or so. On a $600,000 house, you can save up to $15,000. Which sounds a lot like a bathroom remodel – or your first vacation away from all that remodeling….
Oh, and the legal services you get from your real estate agent? Well, needless to say, you’ll get better from a full-blown lawyer. Read on for the nitty-gritty.
Buy a House Without an Agent and Use an Attorney Instead
These days, house listings are online. It didn’t used to be that way. A century ago, when the industry evolved, real estate brokers kept their own private list of what was for sale. If you wanted to know what was for sale, you had one option: hire a realtor.
Not any more. The “listings” — the houses for sale — are everywhere on the internet. And you can even search easily for “For Sale By Owner” (or FSBO) listings on Zillow. These sellers are also skipping the services of a real estate agent, and they can be good opportunities. In any event, you don’t have to hire a broker to find the houses for sale.
Once you find the house, its time for an offer. Should you try to buy a house without an agent?
Many buyers are concerned about offending the seller if they skip an agent and use a lawyer for their offer. Don’t worry, the seller will be happy to work with you, sellers want to sell. The listing agent, though, may have a different attitude. He may gnash his teeth a little, but he’ll get over it. Yes, he might have some extra work, like giving you a tour or house-sitting for your inspection. But like the seller, the listing agent wants to sell, period.
In a Seller’s Market, a Lawyer May Be a Drag
On the other hand, it’s a tough world out there for buyers (with some early signs of better days ahead). Buying a home oftentimes means having to outbid other buyers. So with every house on the market, there is one winner and a whole bunch of losers. Ouch.
When competing against other offers, the offer needs to be as “clean” as possible. And an offer written by an attorney, without an agent involved, is not seen that way. It’s seen as something different — and in the listing agent’s eyes, perhaps in a very bad way. If your offer is the only offer, there is no issue. But if you’re in a bidding war, this tiny issue makes it even harder to win. So this route might not be best for you.
But if you’re willing and able to look at “stale” listings, though, you can probably go this route and be successful. Remember that if you pay less for a home than you anticipated, you can get to work that much sooner making it the house you want it to be.
Seattle Tip: A “stale” listing is one that has been on the market at least 15 if not 30 or more days. By then, the house is beyond the “bidding war” period and so you are likely to be the only interested buyer.
Using a Lawyer for Legal Services Makes Sense
Real estate brokers are unique. They have their own professional skill set: Marketing and identifying properties, and assessing their current and likely future value. In addition, they get to employ the skills of lawyers – and the law is a far more complicated profession.
As a result, a buyer may be better served by using a lawyer rather than a real estate agent when buying a home. Once you’ve found the home, the only real estate brokerage service you need is an opinion of value.
And there, too, the internet offers an alternative. No, don’t rely on the Zestimate! But Zillow,Surefield, Redfin, and other web sites offer free tools to assist in determining the market value of a home.
Otherwise, everything else – drafting an offer, negotiating the contract, renegotiating the contract after an inspection, reviewing title, approving closing documents – is the practice of law, and best done by an attorney.
Interested in learning more? Check out our Consumer Guide on How to Buy Without an Agent!
The conclusion is pretty clear. It’s easy to do your own searching, and you just don’t need a real estate agent anymore. But you do need legal services. Best of all, an attorney costs a whole lot less. So you can save a ton of money, and get better service too. Buy a house without an agent? Well, it merits serious consideration at least.