Do We Need a Broker to Buy a House?
After getting pre-approved for financing, getting a real estate broker or agent is usually the logical next step when you're on the market to buy a house. But the fees for hiring a real estate agent can vary from 2.5 percent to three percent of the home sale on average. You may want to explore the possibility of buying a house without the help of a broker.
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For Sale By Owner
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In many for-sale-by-owner transactions, the seller of the house works directly with the buyer instead of enlisting the help of expensive agents. The idea is to save the cost of paying broker commissions on both sides --- it is a way to eliminate the middleman in these transactions. For-sale-by-owner websites allow sellers and buyers to connect and negotiate the sale of homes instead of following the more formal process with agents.
What Does a Broker Do?
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A real estate agent does a lot of behind the scenes work to get a sale closed. The buyer's agent helps you identify homes that meet your requirements and escorts you to these homes --- even when the y're locked and unoccupied. Brokers know how to access the keys to a home so that you can see the inside at your convenience. The broker negotiates with the seller of a house and his agent on the price and terms of the sale. When your bid on a house is accepted, the broker draws up the sales agreement. The broker also works directly with the mortgage lender and title agent to help close the loan.
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Downsides of Skipping a Broker
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When you buy a house without the help of a broker you must take on that role in addition to all of the other tasks required of a home buyer. Also, a real estate broker has experience and knowledge of real estate transactions that you do not. The broker has access to exclusive listings and tools that you may not know about. If you run into a snag with the seller along the way, such as a problem with the title or disagreement over terms, you can find yourself in a very difficult situation without the help of a knowledgeable broker.
Consider Alternatives
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Instead of eliminating the broker completely, consider an alternative. You can try to negotiate with a broker on her rate. For instance, instead of 2.5 percent you can try to get a 1.75 percent rate if you agree to take on some of the tasks that a broker commonly handles. If you do choose to buy without a broker, study the real estate process thoroughly and seek the advice of real estate professionals before you proceed.
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