 I’m sure you’ve heard many reasons why it is better to use a Realtor instead of going with a For Sale By Owner. I’m not here to dispute the reasoning behind that, however, as a former Realtor myself, and now as an investor, it’s easy for me to see why buyers prefer one over the other whichever way they prefer to buy. Many people are just simply not as informed as they can be, yet it's not that hard either, as you'll see here.
In most cases it comes down to price. Seller wants more money and Buyer wants to pay less money. But often it comes down to how easy will it be to buy the property that the buyer wants and how fast can they have it without worrying about if it will all turn out right and be what they're hoping for it to be. A Realtor is required by law to adhere to higher standards which should help protect the seller and/or buyer they represent, but it does not mean they are imperfect or all knowing, which is why it costs them so much to become licensed in order to sell in order to help navigate the process of buying and/or selling. Therefore, there will be a lot of paperwork and conditions that also help protect the Realtor, as well as their client, which can be somewhat overwhelming to the client with all of the state required documentations and terminology used that only an Attorney truly understands in most cases. Basically, a Realtor is the middle-person in the entire process, and gets paid through the client's agreement to pay them at the end of the transaction through the Title company or Attorney. A Realtor is to help their client when it comes to negotiations, so you’re putting your trust in what they advise and in what they say and do based on their experience. Although some states do not allow dual representation, whereby they represent both Seller and Buyer, but if the state or Broker does allow it, then there are things the Realtor cannot say or share with the other party which you may be able to find out through a For Sale By Owner or Investor, if they're telling you the truth that is. So, it really comes down to a matter of trust, and you’re always better off researching matters on your own despite who you're working with. Check with neighbors, investigate news sources, contact people you need to be contacting for information from anyone other than someone involved in the transaction. Outside sources are usually not going to lie unless they don't want a new neighbor. Realtors are often used when people do not want to deal with the hassle of advertising their own property for sale or are not sure of the process, and simply feel it's easier to have someone else deal with it all. So a Realtor’s help can be a Huge Plus, but not all Realtors are alike either. Yet, we should never judge a book by it’s cover just because it may look good on a billboard. Realtors pay to make themselves look good. If you’re a buyer looking for properties through any Online MLS provider sites, then no matter what, you will be using a Realtor to buy that property if that’s one you want to buy. A property listed with a Realtor is not something you can buy direct from the owner for slightly less, or any other arrangement as long as it’s listed with a Realtor. Plus, if you're hoping to work something out with the seller without the Realtor, there’s usually a clause within the Realtor’s listing agreement that indicates if the Seller is to sell within a certain timeframe after the end of the agreement, they may still be obligated to pay any Realtor commissions, especially if it is discovered you as a buyer intervened while it was listed. Depending on the circumstance they may or may not still be obligated to pay commissions. So trying to work a deal out with a seller while it is under contract to buy once it’s terminated could hurt the seller, and may have ramifications that could involve you also as a buyer in court. When you understand there are other sources to rely on in order to perform your own Due Diligence, such as the County’s Zoning and/or Planning Department, The Local Utility companies, Inspectors, Neighbors, and Google to help in the research while allowing enough time to make sure you’re satisfied, then why involve someone else? It's really that simple. The property is of more concern to the person involved rather than a middle person who has no intent on buying the property themself. Think about that for a moment. Even with a Realtor representing you, you still have the right to perform your own due diligence and inspections, and whatever else you find helpful so you can determine whether you want to proceed or not. It's not up to the Realtor. It's up to you. A For Sale By Owner or Investor that owns the property for sale, should also allow you the same respect by providing you with a Due Diligence period in which to be sure you are satisfied with your purchase, within so many days of signing the Agreement to purchase. Having a Due Diligence period will helps give the buyer peace of mind for all you discover through that time frame. If it’s not something you want to buy, then if there was any money deposited, it should be refunded to you, unless stated otherwise similar to what you’d find with a Realtor’s contract. Although not all For Sale By Owners or Investors provide a Due Diligence period, so in that case, it’s really up to you to investigate everything before ever signing anything. You should never obligate yourself without being entitled to do your own research. The First thing any buyer should do no matter what, is Always call the County Recorder’s office, sometimes known as the County Clerks Office in some counties, to verify over the phone who the Owner on Record is that has a right to sell that property you’re about to buy. THIS IS SO IMPORTANT! You cannot rely on what is shown online, since the source may not have up-to-the moment recording information, but the County Recorder's/County Clerke's office will. For Sale By Owners and Investors often allow Seller Financing which allows the buyer to buy the property through time by making monthly or quarterly payments, under terms acceptable to the buyer. This helps the buyer to not worry about having to get a loan elsewhere, and without going broke in order to buy it in full right away. On the other hand, properties listed with a Realtor usually require payment in full within whatever is in the agreement. This could lead to complications if the buyer is trying to get a loan for the property, or doesn't have the full funds available by the time it is ready to close. If the buyer cannot perform by paying in full, they could lose their earnest money deposit as well. There are very few banks that will fund buyers for vacant land since most banks prefer to finance homes and people with good credit. A For Sale By Owner or Investor is not as concerned with anyone’s credit when it comes to allowing a buyer to buy what they’re selling, which is an added plus for the buyer. No matter which way you buy, whether using a Realtor or an Investor, also known as a For Sale By Owner, it is up to the Title company or Attorney being used to make sure all meets the State’s legalities when it comes time to close and process all payments in the transaction accordingly. However, if the property being sold is less than a few thousand dollars, it is often simpler to just record through the County Recorder’s or County Clerk’s office once paid for in full, with the Recorded Deed transferring all rights to the new buyer. If recorded this way, you as the buyer, need to be sure you are working with a Reputable Seller who knows what they’re doing, and will do as they say, with proof of every detail throughout the entire transaction. It helps to know that investors who take their business so seriously, that they want to be legitimate in every step they perform, will establish themself as a business entity, such as an LLC, making it a safer way of doing business reputably rather than working with an individual who is not licensed in any way. When a company is licensed as an Established Business/LLC or other Corporate through the state, it means that your satisfaction matters to them otherwise they wouldn't be in business. To see if a business is registered that you should know, you can do so through this link here. Then enter in the name of the company with LLC or whatever is attached to their business, and you will see the state they are registered in. That does not mean they can only do business in that state, but it does tell you which state they are registered in. You’ll often find that Investors buy properties at far less than market prices which helps the seller in need of a fast sale, so the investor can also sell the property for less to someone who feels the market ignores their financial situation. The reasons Investors can do this are numerous, which you can also find through a previous blog post as shown by clicking here. So, when all is said and done, it all comes down to it's simply a matter of choice. What matters most is that you get what you want as agreed to in writing. Then everyone is happy. 😉
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