Real Estate Possible without an Agent?

Many people in the country have been hurt by the mortgage crisis. People are getting foreclosed upon; they can't make their payments. Many people are trying to sell their homes themselves. Here are some ideas from Chris Pirillo to work without a Realtor, to save you some money.



My idea would be find a Realtor, and negotiate an acceptable fee for the services provided. It's like a free insurance policy. :-)

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The Real Estate Conversation

A Real Estate Market is social. Buyers and Sellers communicate to discover information and negotiate to exchange goods or services. From this I understand the Real Estate Market as a Real Estate Conversation.

Internet transparency is letting home buyers view Residential and Commercial MLS, FSBO listings on their own. It has reduced home buyers search costs, and given them access to multiple new product options to choose from when going into a real estate transaction. Also sellers have found new tools and services to attract home buyers and sell their houses, they can now leverage Internet market tools that are intended to increase the efficacy of transactional requirements.

This "conversation" transparency has made it difficult for Real Estate Agents, Appraisers, Lenders, etc. to collect the fees - tipping the balance of power towards the consumers. By opening access to information outside of the Brokers/Lawyers control, buyers and sellers now gain economic benefits that would be otherwise be received by market intermediaries or inappropriately distributed among the smart and connected deal makers of the financial world.

update: I added this to Wikipedia - *Still in progress.

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The Realtor As A Wing Man

Will Smith acts as a dating coach in the 2005 movie Hitch. Who, for a fee, helps men woo the women of their dreams. This service style of a coach is nothing new to the Realtor/Client relationship and it looks to be growing in popularity with consumers. So as a consumer how do you make sure that your unique needs are going to be served? What role will you play in the processes of searching for a home, negotiating the transaction, getting financing, or handle the transfer of ownership, etc.?

As Galen Ward of Seattle's Rain City Guide explains:

We are leaving the time of the agent-"leads"-consumer model in the real estate industry and we are entering the time of the agent-"coaches"-consumer model.

If your getting ready to sell or buy real estate - here are some things you should think about before taking the next step. Remember, a good coach will provide the client with the necessary support and structure needed to help realize the participants dreams.

• Define the Communication Performance: Make sure that an expected Turn Around time is understood. Ask great questions and explain your decision-making strategies.
  
• Define Team Strategies: Alerts of new homes on the market, Neighborhood and community information for properties you find on or off the MLS, Advice while working with transaction service partners (lenders, appraisers, lawyers, escrow, fees), Access to property walk-through times/lockbox access.
  
• Talk About Barriers to Performance: Set expected availability hours, Emergency contact availability
  
• Manage each others emotional state while working together - close to the purchase agreement you might start lacking sleep. Make sure to use respect in all situations.
  
• Mentor: Work with a Realtor that can lead or coach by experience.
  

A seasoned real estate professional might be the ever so valuable "wing" on your team to help catch the home or homebuyer that you're looking for!. Bonus: Teaching you how to do it yourself along the way ~!.

Manage Real Estate and Mortgage Closing Fees

LowerFees Inc. provides real estate consumers with fee transparency and reduces the confusion about the charges during a real estate transaction. The web portal is an "open marketplace" to breakdown complicated vendor fees for closing costs. In other words it provides a Good Faith Estimate for the transaction that compares fees from multiple vendors (line item by line item).

With consumers being charged as much as $55B in real estate closing costs last year, LowerFees is positioned to help save up to $21B in junk fees. Source: LowerFees Inc.

The bottom line is that LowerFees.com compares fees from local vendors, allowing consumers to make educated real estate decisions.


LowerFees.com currently offers the following products to aid the consumer:

Quick Quote:

Through the website's database of more than 10,000 real estate service providers, users simply input their property type, estimated property value/loan amount, occupancy type and zip code into the Quick Quote system and will instantly find the lowest closing costs for their transaction.

Fee Analyzer:

When consumers enter their fees in the Fee Analyzer, they receive a detailed explanation of each fee and whether that fee is common or not.

Home Seller Feeling Second Thoughts

Buyer's remorse is an emotional condition whereby a person feels regret after the purchase of an item. In the context of Real Estate there are a many possible scenarios that bring on buyer's remorse: such as - continuing to look at homes after you buy, no guidance after the transaction, or talking to others about the new house - etc... On the flip side of this is Seller's Remorse. Some scenarios that bring on sellers remorse are that the sellers start thinking about all the wonderful memories enjoyed in their home or how they think they will never be able to find another residence as nice.

If your a home seller avoid Seller's Remorse and ask yourself why do you want to sell your house. If the answer is a new job, divorce, financial problems, pending foreclosure, or moving closer to family then you should be safe from the issue of sellers remorse. However, if you answer that your curious what you can get for the house, need to sell for fast money, or your tired of the responsibilities of home ownership then make sure you want to sell before you list the house for sale.

Home Seller Beware: of the "we're not moving" possible legal consequences or penalty's of your breach of the buyers purchase agreement.

In a nutshell, if the buyer really wants the home, the buyer can bring a "specific performance lawsuit" to force the seller to complete the sale on the terms agreed in the signed sales contract.

To make matters worse for the seller, a savvy buyer's lawyer will usually record a "lis pendens" against the title to prevent the seller from selling to another buyer or even refinancing the property.

The legal reason is every property is unique, so monetary damages are not an adequate remedy for the buyer if the seller breaches the sales contract.

For more details about the results of breach of contract by either the home seller or buyer, it's best to consult a real estate professional.

Contract Contingencies

A contract contingency is used in most transactions - most often in a buyers market. The homebuyer will make an offer on the house that includes conditional circumstances that expire in a set timeframe. Basically, if a contingency is in the mutually agreed contract the seller and the buyer both must be satisfied before they have a legal duty to execute the terms of the deal.

There are many types of contingencies of not completely foreseen circumstances but all have a date to "lift" or "remove" the contingency in question.

Loan Financing Contingency: The homebuyer usually needs to get a loan to purchase the real estate for sale. When the buyer applies for the loan they have a negotiated timeframe to obtain the financing from the start of the accepted contract. The statement in the contact would look something like, "Buyer shall have ____ days from acceptance of contract within which to remove or otherwise act on said contingency. Buyer agrees to verify all loan terms directly with lender prior to removing this contingency." If the buyer is turned down for the financing within the negotiated timeframe then the contract expires.

Note: If your selling a home its best to have the homebuyer submit the initial offer with a "Pre-Approval" letter from the lender.

Note: The homebuyer does have the option to submit an offer to the seller with no contingencies but it is done mostly in a hot sellers market.

A few more samples of contingencies are as follows:

Structural Pest and Termite Inspection Contingency
Property Condition - Home Inspection Contingency
Home Insurance Contingency

Basic Steps of a Real Estate Transaction

Information Phase

Home Buyers: Research and evaluate needs and then choose the sources to fill them. Find and tour the available inventory of homes for sale.
Home Sellers: Valuate property and arrange to advertise home to qualified buyers.

Negotiating Phase

Participating players in the transaction negotiate the terms of the deal.

Execute & Monitor Phase

The transaction is executed with money and goods being exchanged according to the conditions previously stipulated. Monitoring accompanies to close the deal.