St Louis Realtor - Buyers Guide
Many buyers ask if they can buy a house on our own or if they need to use a Real Estate Agent. The answer is yes, you can do it on your own. There is no law that prevents you from buying property without professional Real Estate assistance. You can search for homes, call the sellers and arrange showings, and even negotiate pricing and move-in requirements on your own (although some municipalities require you to pay an Attorney to draw up the actual sales contract). The real question may be "do you really want to do it on our own?"
There is a misconception among many first time home buyers that by using a Real Estate Agent they will be subject to paying a commission. In virtually all situations, this is not the case. The commission for the sale of a home is paid for by the seller, not the buyer. If you went to your department store and bought a new television, you wouldn't expect to pay a commission to the salesperson after you bought the TV. The same applies when you buy a house--it is the seller of the item that pays to have it sold- not the buyer. In fact, if you are required to pay an Attorney to draw up a sales contract, you may actually have more out of pocket expenses by going it on your own.
If you do decide to go it on your own, your choices will be limited. The only homes that you can buy without any Agent involved are those that are "For Sale By Owner" (FSBO)--generally 20% of the market or less. These are sellers who have decided not to use an Agent in the sale of their house.
Why some sellers choose not to use an Agent varies. Some think they can make more money by not paying a commission or by finding an uneducated buyer that will pay more than market price. Others are hoping to avoid disclosing problems that Agents are required to disclose; or it could simply be the seller couldn't get an Agent to take their house listing at the price they demanded. What ever the situation, a problem arises when, as a "do-it-yourself" home buyer, you need to make a determination whether or not the house is worth the asking price. How do you decide? Are you willing to make a "gut" decision with all that money? If not, you will need to either secure an independent appraisal to determine a realistic price range for the property or develop your own determination of value.
Another mistake that many home buyers make is to jump into the "listed" market by checking advertisements and calling Listing Agents directly or visiting Open Houses. You do not save money with this strategy (the seller sets the commission rate prior to listing the house which the Listing Agent splits with a Buyer's Agent should you have one). What you do run the risk of is ending up with no representation at all, since the Listing Agent is bound by law to represent the seller's best interests.