What happens when you use an attorney rather than a real estate broker to buy a house? It’s been known 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’ll save up to $15,000. Which sounds a lot like a bathroom remodel – or your first vacation away.
Buying a home? Skip the Real Estate Agent and Use an Attorney
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.
Once you find the house, its time for an offer. The seller will be happy to work with you – but the listing agent? Well, he will gnash his teeth a little, but he’ll get over it. Yes, he might have a little extra work, like giving you a tour or house-sitting for your inspection. But like the seller, the listing agent wants to sell, period.
Using a Real Estate Attorney, not a Realtor, Can Be Hard Today
On the other hand, it’s a tough world out there for buyers. 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. If it’s the only offer, this tiny issue is resolved immediately. 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. If you’re willing and able to look at “stale” listings, 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.
You May Be Best Served Using a Lawyer Rather Than a Real Estate Broker
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.