While the idea may seem daunting, it is possible to buy a home without a Realtor®. It may require more effort on your part, but by following a few basic steps and being organized, it shouldn’t be a problem.
Follow these six steps when looking to buy a home without a Realtor®:
Learn how much you can afford to pay for a home. Sit down and go through your monthly expenses and how much debt you currently have. Once you’ve totaled your expenses for the month, you’ll have an idea of how much you can afford as a monthly mortgage payment. As a rule of thumb, your mortgage payment should be less than a third of your total monthly income.
Before reaching out to lenders, begin gathering documents to verify your income, such as paystubs, tax returns, and bank statements. They may also need to see insurance statements or any other relevant information. Also, be sure to collect documents related to the debts you owe. A bank or mortgage representative will need to know your debt-to-income ratio to get a good feel for what you can afford.
Once you have all your debt and income information collected, begin contacting lenders and comparing options. Start with the bank where you currently have your accounts. During this process, don’t worry too much about your credit score. While your score will likely go down temporarily after you’ve purchased your new home, shopping around for rates shouldn’t hurt your credit (unless you think it will drop your score below the mid-600s).
Before you get too far into your search, you’ll want to begin reaching out to local, qualified real estate attorneys. An experienced real estate attorney like Bruce R. Jacobs can help guide you through the process, from preparing the purchase agreement to preparing the closing documents and closing the transaction, to ensure your interests are protected.
Although Florida law does not require you to hire a real estate attorney, you’ll be dealing with a variety of legal documents and a process that could expose you to considerable risk if not executed correctly. The cost of a real estate attorney’s services will most likely be equivalent to what you would pay a title company to otherwise close the transaction, so it makes sense to hire an attorney to ensure the process goes smoothly.
Finally, line up your real estate attorney before you begin the search process. You’ll want to move quickly once you’ve found the right property, so having a lawyer on standby will help ensure the process is as efficient as possible.
Identify a few neighborhoods where you want to live. Depending on the location, prices can vary dramatically. Beyond price, you’ll also want to make sure the neighborhood meets your needs. Do you like the school district? Would you have an easy commute to work? Are you close to family and friends? Each of these factors go into determining the area that’s best for you.
Once you’ve found a few potential choices, begin viewing them in person. Pictures of the home are great, but physically seeing the home lets you know if it’s right for you. Showings and open houses are great ways to inspect the property for yourself and to ask the listing agent or homeowner questions about the history of the home and work that’s recently been done.
Once you’ve found a home you like, start figuring out what to offer by comparing other homes in the surrounding area. This can include the neighborhood your target home is in or other similar neighborhoods nearby. Comparing prices will help you come up with a realistic proposal.
When you find the right home at what you believe might be the right price, make an offer! The initial offer should be less than the maximum you’re willing to pay, but not so low that it could cause the seller to disregard it completely.
Your real estate attorney will prepare the contract on your behalf and he or she will include language that makes the transaction contingent upon the seller providing a written disclosure statement that outlines any conditions about the property, like mold or any other issues, that can materially impact the value of the property.
If the owners accept the offer, that’s great, and you’re well on your way to becoming a homeowner. Given the current real estate market, however, you could be facing some stiff competition, whether it’s from others putting in a competing offer or the owner coming back with a counteroffer. Be prepared to negotiate, but also know you can walk away if it starts going beyond your means.
One important note about negotiations: If you find yourself dealing with an experienced Realtor®, be prepared to defend your offer if it’s lower than the asking price. This means you’ll need to justify your offer by identifying comparable prices on similar homes that have recently sold nearby, while also pointing out any work that may need to be done to the property after the sale is final.
Additionally, if your contract is accepted, you will have to calendar all of the important dates in the contract. This includes, among other dates, the date of providing any deposits, the date for providing a mortgage commitment, conducting inspections, applying for approval from the association (if any), terminating the contract if you are not satisfied with the results of the inspection and closing the deal. Your real estate will also calendar these dates and provide a reminder to you to help you meet these time requirements.
Before you close on a home, it’s important that you have a qualified home inspector come and examine the property. They will be able to spot any problems with the interior or exterior of the property, noting what should be fixed before it is move-in ready.
Typically, an agent would take care of finding an inspector to view the property before you close on a deal. Since you’re not working with an agent, you’ll need to browse and research inspectors on your own. No matter what inspector you choose, you should speak with an attorney to understand the limitations with most inspection reports.
In addition to an inspector, you will need to hire a survey company and a closing agent. If you hire a real estate attorney, he or she can take care of these tasks, including closing the transaction, at a cost that is in line with most title companies.
This is where having a qualified real estate attorney comes in handy. A mortgage closing consists of a lot of paperwork and an attorney can save you a great deal of time and effort while also significantly reducing risks or errors.
Prior to the closing, meet with your attorney to go through the paperwork. Your attorney can catch anything that may be questionable and bring it up prior to settlement. You can also ask questions to clarify parts of the paperwork that may seem confusing to you. The last time you can ask questions is your closing date, so make sure you get them out of the way beforehand.
At settlement, you’ll sign all the documents with your attorney present. Once everything has been signed, the keys will be turned over to you, and you will officially be a homeowner!
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If you are planning to buy a home without a Realtor®, you will need the help of a trained, experienced real estate attorney to ensure that standard laws are being met and your rights are protected if legal issues arise in your real estate closing in Miramar.
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Contact Bruce R. Jacobs to find out how he can help you. You can reach him by phone at (954) 986-6446 or by e-mail through this web site to schedule an appointment and learn more about your rights. He offers a free initial consultation.
Call (954) 986-6446