Buying an investment property without a realtor / agent?

Question

I think this would essentially be an FSBO.

Is there a reason this would be a bad idea?  I am working with someone that is an agent but also owns a property they contacted me about selling.  I own several rentals, but have always had a listing agent involved that I was buying from.  I've not always had an agent representing me.

Given that, what are the pitfalls, if any, in this prospective deal if there's technically no selling agent involved and i don't bring an agent to the table representing me?

My thought is we would be able to save the 6% the seller would typically pay the 2 agents and maybe split the different, thereby making it a win / win and saving both sides a little money.

What am i missing?

Travis Hughes · Answer

If you're not already comfortable with doing the transaction without an agent, that might give you all of the information you need.  There are plenty of great deals that can be done directly from seller to buyer without agency relationship involved, but there is also a lot of room for error.  The contracts that you are using may not be as secure as the ones the local association of REALTORS uses.

It's all about risk vs reward in this game.  If you're not comfortable handling the transaction directly, your cost to dramatically reduce your risk is the 6% it would cost to hire an agent.  There's nothing that says you can't bring in an agent to represent you to deal with a FSBO.  On the other hand, if it's not worth 6% to you, then you are either comfortable with the risk going it alone or you don't actually want to close the deal.