Buying a House without a Realtor in Canada

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Listing agents are often approached by potential buyers who don’t have a realtor. Buyers might want to save money on commission, fees, or don’t trust the services of realtors in general. In Canada, the buyer’s realtor doesn’t get a commission, but can negotiate with the seller’s agent to get a cut of theirs. If a buyer can close the deal without a realtor, then the seller’s agent can be convinced to reduce their commission percentage, saving money for the buyer.

Can I go through the process of buying a house without the help of a realtor?

Buying a House without a Realtor in CanadaIf you’re planning to buy a house without a realtor, then your first answer is yes. It is entirely possible. The process is very complex as you’ll have to familiarize yourself with the policies that apply to buying a house. You’ll also have to do all the research yourself, find potential properties, and stay alert to avoid getting duped. If you can handle all these, then you’re ready for the market.

Could sellers reject my offer because I don’t have an agent?

The short relationship that is established while buying a house is mostly based on trust. Sellers might find it odd that you’ve refused to get an agent, but that doesn’t mean they would reject your offer. It is expected that a seller will be more comfortable with a realtor who is from a named, reputable organization. They will easily open their homes for a showing if they can trust you. To gain their trust, portray yourself as capable to the seller’s listing agent, as you’ll have to convince them first. Don’t go in wide-eyed or the seller’s agent will be skeptical about investing their time in your offer. Do your research first.  

What you should be on the lookout for are sellers who might try to cheat you because you have no realtor/little knowledge of the market. Be sure to get familiar with all the policies regarding selling or buying a home in your province. If a seller says or suggests something you don’t understand, speak up and ask question. Don’t go ahead with any process or suggestion you don’t understand.

Can I negotiate as well as the seller’s agent?

Probably not, except your profession has required you to fine tune your negotiation skills. To get a good deal, you need to make an offer that works for both you and the seller. They will probably try to increase your first offer, and this is where you will have to skillfully haggle like you’re in a market. Remember that you will be up against a real estate agent who is a professional negotiator. You probably won’t do as well as a realtor would, but you can still get yourself a good deal. The agent will be counting on your lack of representation to make some extra money off you, so you should get ready to barter.

Before you make an offer, get all your facts in check. During the showing, check for any fixtures or signs of age or rot that can be used to push down the property’s value. If you’re requesting a loan from the bank, then your bank will probably request a full appraisal of the property. Look through the report and pick out the weaknesses of the property to use as tools.

Remember that sellers and their agents are trying to make as much money as possible, so they might be unwilling to budge. You should also get comfortable with standing your ground, because you have to look like your final offer is truly the final offer. Repeat this process until you get a favorable offer on your preferred property.

Will I have full access to available properties of my liking?

Should I use a real estate agent?As expected, realtors have insider access that makes finding properties for their buyers a lot easier. There are traditional platforms such as listings and online marketplaces where you can expect a seller’s agent to publish their available properties, but sometimes, the real gems never make it to such lists. You won’t have access to most of these properties, and there’s hardly any way around this. Even if you find the information about such available homes, sellers might be reluctant to open their homes to an individual buyer for a showing.

If you’re looking for a home situated beyond your district, you might also find yourself in a bit of trouble. Your inability to ‘roam’ the neighborhood and spot potential properties means that you might have to depend fully on agent lists. However, remember that many people are also looking for well-priced homes in the same category as you are. Properties get on, and fly off the market easily. Finding a good deal might require a miracle as you won’t have anyone watching the market and fielding the best deals for you.

Do I have to know the lingo?

You’re not a realtor, so no one really expects you to throw around industry language casually. However, you should be able to use the common terms which are involved in property buying and selling. Not only will this help you understand conversations better, it will also present small mistakes from going over your head. Little things ignored today can have big consequences tomorrow. Even though you’ve decided to represent yourself, you shouldn’t expect the people you deal with to slow down for you. They will expect you to understand the terms they use, know the next step of the buying process, and other due processes.

I would advise that you quickly make Google your best friend. Don’t ignore anything, regardless of how small it may seem. Anything ignored could have a legal or financial implication in the future, and you would not have the excuse of ignorance. Just like the money you eventually pay, your time spent on studying the market is also an investment towards your future home.

How do I understand the market value of my dream house?

Every property has an average market value which applies to it. If you’re looking to buy a house, you want to ensure that you pay the right price, and that the value is not inflated to get more money out of you. To determine the ideal price for your potential home, you will have to consider the comparable properties.

Comparables, or comps, are sales in your target neighbourhood of properties which share the same features and amenities with your home of interest. Agents usually have easy access to comps, but you’ll have a harder time digging up these stats by yourself.

When you have the comps, you can derive an average bid for your home of in the rest without shortchanging the seller or yourself. Comparables help buyers to determine if the listing price is fair and gives them reliable info on the price range to place their offer. While looking at comparables, try to use the most recent data that you can find. The market is hardly static, so your information should be as recent as possible to provide the best value.

Do I need an attorney to pay for a home?

It’s almost impossible to go through the home buying process without the help of a third party. Even if you do manage to ditch a realtor, it is advised that you still work closely with your attorney. Of course, you can make a purchase without an attorney, but that’s a risky process. You need an experienced party on your side who can inform you of any factor which can shortchange you in the deal. The seller’s agent and lawyer will be working to get them the best deal, so don’t expect that they will do you any favours. A real estate attorney will provide some level of protection for you which you will appreciate in the long run. Real estate attorneys also help in the negotiation process to secure the best deals for their clients.

What questions should I be asking the seller?

There are a lot of important aspects to a home sale before signing the dotted lines. For example, the house could have fixtures that need expensive repairs done. Before making payment, you should agree with the seller on who will be making those repairs. If you assume, so will they, and they won’t pay for anything.

Many buyers often refuse to ask the right questions because they are anxious or are afraid of losing the deal. They assume that some issues will resolve themselves, but they never do. Any agreement which isn’t included in the contract is not binding on either party. To ensure that you are not being shortchanged, ask questions on how your concerns (regarding the property) will be resolved. Include the answers and agreements in the final contract.

Conclusion

As key players in the real estate market in Canada, we will always recommend that home buyers use the services of trusted realtors. The process of house hunting and negotiating with sellers is very tasking and can take away from relevant time. Eventually, the money you’re trying to not spend on fees will be lost in some other valuable way.

If you have the time and resources to find and purchase your home by yourself, then take up the project. However, if you’re looking for the easiest deal available, then you should get a trusted realtor. Even if you do find a realtor, some of the tips above will help you stay informed about their progress at all times.

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