Buying a home without hiring a realtor

In Alberta, it is not required to hire a realtor to buy a home. Even when the home is listed on the MLS, and listed by a licensed realtor, a buyer can work without his or her own representation. However, buying a home is a complex process. It involves many parties like sellers, buyers, lawyers, mortgage brokers, home inspectors, etc. As well, knowledge and experience in the home buying process go a long way. For most people, it is the reason to buy a home with the help of a realtor.

How many home buyers use a realtor to buy?

In Calgary, on average 95% of all home buyers bring their own realtor. The few percent who buy a home without a realtor are most likely investors that buy (and maybe sell) homes more often, or those with a lot of cash who can, and are willing, to take some risk.

Many real estate investors, though, still decide to hire a realtor to help them with the purchase of a property. Even investors who ‘flip’ homes for a profit often choose to hire a realtor for assistance in buying (and selling).

 

Financial advantages for the buyer

In most cases, when using a realtor, there is no money out of the pocket of a buyer. The listing brokerage pays the commission of the buying realtor, while the seller pays the listing brokerage.   Some buyers think that they get a better price on the home if they don’t bring their own realtor, but in many cases that is a misconception. One of the reasons is that the selling realtor is in a pre-existing contract with the seller. If there is no buying agent involved, the seller’s commission goes, in general, to the selling agent, rather than splitting it. And if a realtor does give a discount on commissions, it goes, most often, to the seller and not to the buyer.

By law, this selling realtor is working for the seller, in the seller’s best interests. Similarly, the buying realtor is working in the best interests of the buyer.

Full access to sales data and market trends for fair market value

The MLS registers nearly all homes for sale, and a realtor has full access to the MLS. The MLS provides detailed sale data, which is important to determine the fair market value of a home. But the MLS also provides detailed information on how fast homes sell, if there were any price reductions, as well as the history of a home. How long was a home on the market? Was it listed before? Why was it not selling? This is all valuable information because it presents the current market and details about the particular home. The more a buyer knows, the better a decision that can be made. This detailed information is difficult for a buyer to retrieve and interpret without a realtor.

Knowledge and experience to determine market value

Finding out the market value of a home is most often not a ‘slam dunk’. The MLS provides extensive data, but it takes knowledge and experience to analyze the data to determine what the fair market value of a home is. Different types of properties need different approaches to determine market values. For example, setting a price for a condominium is different from that of a single-family home because these markets are different. In Calgary, different communities or quadrants need a different approach, as well.

Overall, the process of buying a home is complex enough that most realtors need several years to learn the ins and outs. Besides, real estate is ever evolving, and many factors can affect the real estate market. New rules from the government in mortgages, different economic times, changing real estate forecasts etc. It never stops.

The internet does not give you all the information

The internet provides a lot of information on buying a home but can never teach everything a buyer should know to make the right purchasing decisions. Also, real estate is local. Real estate in Brentwood is different from Mahogany, and Skyview Ranch cannot compare with Bridlewood. These are different communities with different markets, requiring different approaches to buying a home. Calgary real estate is also different from Edmonton, and Alberta real estate is different from BC or Ontario real estate. (Much different, if we may add!) Real estate is also personal. An investor sees a property through different eyes than a first-time home buyer or a buyer who wants to downsize. The internet can teach us a lot, but never with as much detail as a realtor in Calgary can provide through access to the MLS and through experience.

Negotiations with experience

Negotiations are very important when buying a home. Realtors who work daily in real estate have these negotiations skills. Any information from the MLS can be used within the negotiations, and negotiations are not limited to a purchase price only. Also, terms and conditions are important to negotiate on.

The legal side of buying

There are strict legalities in every home purchase. A large part of this legal component is handled by the real estate agent. Then, the real estate lawyer comes into the process after the conditional sale is firm. For example, the RPR must be up to date and must comply with the laws and bylaws. Also, the title of a property can reveal issues or Dower Rights may apply. Just a few details may cause a transaction to ‘get ugly’ during closing. Realtors take care of many legal aspects to make sure the process of buying is ‘smooth sailing’, and prevents any surprises that can affect the buyer negatively.

 

Yes, you can cut your own hair. But would you?

 

An extra set of eyes with a grounded perspective

Also, across the board, many home buyers are very invested on an emotional level. A realtor is able to help a buyer with looking at ‘the good, the bad and the ugly’ of a home. In essence, a second set of eyes, looking at a home from a more rational perspective, can help a buyer steer away from a bad decision.

Save time. More viewings = more knowledge in a shorter time

Most buyers like to take their time to look at homes. Some buyers are comfortable looking at 3 homes, while some need to see 40 homes, before making a purchase decision. Either way, a realtor who helps in the process of buying can show many homes in a short period of time. A buyer gives the realtor the MLS numbers of the ‘liked’ homes, and the realtor takes care of the showings. This way, the buyer can concentrate on making the right decision. The buyer who likes to view without the help of a realtor needs to set up all appointments him or herself. The process often takes more time, especially if the buyer wants to see many homes.

Access to more professionals such as lawyers and home inspectors

Every home purchase involves other professionals, such as real estate lawyers, home inspectors, condo document reviewers, etc. Realtors often have a few experts in their ‘rolodex’ who are tried and tested. It gives many buyers peace of mind, knowing that they don’t have to chase other professionals who are very important pillars in the home buying process.

It all starts with a reliable and honest realtor

Buying a home? Have a realtor working for you with no money coming out of your pocket. It all starts with a reliable and honest realtor who understands what working in the best interest of a client actually means. This is a realtor who is not afraid to tell you that a home is overpriced, or that the home is not great in terms of resale.  Tanja van de Kamp was a lawyer and crown prosecutor in the Netherlands for 12 years and has been a realtor in Calgary since 2009. Like no other realtor, Tanja understands the legal side of a transaction, has experience in negotiations and has a straightforward and honest approach to her clients both in buying and selling.

Call Tanja van de Kamp at 403 978 5267 or Ariette van Pelt at 403 630 5190 for  a free consultation. Alternatively, drop us an email!

RECA, the Real Estate Council of Alberta offers ore information about buying a home for consumers. For more information visit RECA.