Buying an house without a realtor

[Tal P.]

Hi,

I am trying to but house to live around Boston area and I'm not sure if I need a real estate agent for that. I don't have much experience but I did get a MA real estate licenses but I have never used that. I am trying to figure out how can I save the fee and do it myself. I'm not sure if this is bad idea but I have good amount of friends that told me that they wasted their time and money by using an agent when they bought an house while to sell one, you definitely need hire a professional. 

[Charlie MacPherson]

@Account Closed As to who pays the commissions, it really depends on what you mean.

In one sense, all of the purchase cost is coming from the buyer, so in that sense, yes, the buyer pays.

However, if the property is listed on MLS, the listing contract stipulates the total amount of the commission, whether or not there is a buyer's agent. So in that sense, no, the buyer doesn't pay. The seller pays from whatever proceeds there are in the sale.

So an unlisted property could theoretically sell for a lower price and the seller could still net more if there were no agents involved. This is what attracts sellers to FSBO.

The flip side is that every study I've ever seen says that FSBO properties consistently sell for less than those marketed through agents, netting the seller less, even after paying commissions.

Heck, even the FOUNDER of ForSaleByOwner.com tried to FSBO his home and failed. He listed with an agent and received a far higher price. $150,000 more, according to the Time.com story!

http://business.time.com/2011/08/17/fsbo-com-founder-sells-condo-using-real-estate-agent/

Not that there aren't exceptions, but it's pretty reasonable to think that someone who works full time in the business is going to be a lot more effective than Joe Homeowner who sells one or two properties in his lifetime.  

Not to mention that Joe probably doesn't know what forms and disclosures to use to keep him out of legal trouble, how to instigate a bidding war, how to best handle multiple offers, how to push back on unreasonable buyer demands, how to negotiate the best terms, how to run an open house, how to document and handle escrow funds, etc.

A lot of people think agents just show a house, shake a few hands and collect big fat checks.  Like a skilled mechanic that can diagnose and repair a complicated issue quickly, a good real estate agent makes it look easy.  

Sometimes it is, but often it's not - and we're the ones who keep hard deals on track.

PS - commissions are always clearly disclosed in the listing agreement, so no BS.