By Katie Wainman
When buying a home, it can be tempting to do so without using a real estate agent. You think, "Can they be trusted?", or "If I can do it on your own, why not?". However, going into the home-buying arena on your own can present many risks that can damage your bank account, your chance at a dream home and your future investments. Keep reading to learn more about the risks of buying a home without using a real estate agent.
Overpaying for a Home
Unless you are extremely knowledgeable about market trends and home appraisals, you are probably going to overpay on a home if you don't have a real estate agent guiding you. Oftentimes, homes that are For Sale By Owner (FSBO) are overpriced to begin with. Sellers can easily overestimate the value of their home, and if you aren't aware of that, you'll end up paying more for a home than the actual value.
Lack of Neighborhood Knowledge
Many agents specialize in specific neighborhoods or communities. Because of this, they usually know the ins-and-outs of that area more than the people who actually live there! They're knowledgeable about what other properties in the area are selling at, how a home's value may increase or decrease in the future, school ratings, safety and much more.
If you're looking into buying a home in a neighborhood that you know nothing about, an agent would be a great asset to have. After all, you're not just purchasing a home, but you're making an investment for your future.
Misunderstanding of Laws, Regulations and Contracts
The real estate industry is full of various laws and regulations that can vary by state, city and county. Without an agent, you won't have someone to be there with you every step of the way to explain the process to you and make sure everything is legal. Nobody wants to be blindsided by a seller who wasn't abiding by the laws, and you certainly don't want to be the one breaking the laws yourself.
There are also going to be mountains of contracts and other paperwork to go through. Real estate jargon can be confusing and it is good to have a trusted agent to explain any terms to you. It is also important to make sure that all deadlines are being met and paperwork is being filled out correctly. If you make mistakes during this step, it can cause serious, expensive issues down the road.
Buyers agents are well-versed when it comes to inspections. They understand which inspections are necessary, which inspections are not, and which inspectors to choose to get the job done. If you try to do this on your own, you may end up purchasing a house with serious problems, or spending too much money on unreasonable inspection requests.
Overpaying on Closing Costs
Closing costs can already be a bit confusing and present last-minute fees you didn't realize you'd have to pay. You don't want to end up footing the bill for all closing costs just because you didn't know any better. If you are represented by an agent, they will be able to break down and explain what the closing costs will be, and they can negotiate with the seller what costs you will cover and what costs the seller will cover.
To avoid these risks, it is best to find a trusted real estate agent. As long as you do proper research and interview prospective agents, you'll find the right fit for you! For more advice during the buying/selling process, visit www.crye-leike.com/blogs.
ABOUT CRYE-LEIKE: Crye-Leike Real Estate Services (www.crye-leike.com), a full service real estate company for over 40 years, is ranked as the third largest independently owned real estate firm in the nation and the largest serving Tennessee, Arkansas, Mississippi and the Mid-South. Crye-Leike has more than 3,200 sales associates, over 800 employees and 140+ company-owned and franchise offices spread across nine states. It generated $6.5 billion in sales volume and 29,925 closed transaction sides corporate wide in 2019 - its biggest year ever - and is on track to achieve the company's goal of $6.8 billion in sales volume this year.