When it comes to buying a home either new or old, the first thing that comes to our mind is our real estate agent. All these years, whenever we need a new home, we just pick up the phone and dial our agent explaining our requirements. With the growth of online marketplaces and social media, the process of house hunting has changed dramatically. We will be looking at the advantages and problems of searching a home with an agent.
More Trust and Knowledge: If you come across a property for sale without an agent, it means you could already know the seller. He could be your neighbor, friend, family, work associate, etc. That being the case you have extra trust on this person and also on the property.
Avoiding the Commission: A real estate agent charges anywhere between 2-3% for the buyer and 1-3% for the seller. If you plan to buy a home without an agent, it means you are saving around 3% of the total property cost.
Better room for negotiation: Since there is no brokerage involved, you can cite this to the seller and negotiate the price for extra 3-5% discount. Seller will also be interested in negotiation since there are no middlemen.
Avoid Price Hike: It is a common practice by brokers to inflate the cost of the house. If the seller is willing to sell the property for Rs.50 Lakhs, the agent will increase the cost to Rs.55 lakhs to get some additional commission. If you look for properties without an agent, you can save on this unnecessary price hike.
Limited Inventory: There are a lot of properties which are sold only through agents. If you decide to search for properties without an agent, you might miss out on these properties. Agent networks with other agent and will have many properties which are not otherwise listed in online portals or newspaper ads.
Time delay: When you hire an agent and explain your requirements, he/she will be able to show you a lot of properties within a short period of time. Without a real estate agent, the process of searching and filtering out properties is a time consuming one and will take a long time.
Lack of contact: If you approach a seller without an agent, you will find a lot of difficulties in contacting him. A seller will be busy with his routine life and might not have time to answer your calls all the time. Also, you have to plan the property visit based on seller’s available time. If there is a broker involved, he is available for your queries most of the time.
Documentation: Some of the real estate agents offer their service for documentation like writing the sale deed, etc along with the commission. You might miss out on this benefit if you go solo. Documentation is a legal process and you need to hire another professional for the same.
As you can see, the benefits of not hiring a real estate agent easily over-weighs its negatives. Considering the ever growing online portals, it is wiser to search for properties without an agent. Use the agent only in some exceptional cases.