As young adults, trying to start a professional career, my colleagues and I are no strangers to living out of suitcases while we figure out accommodation arrangements. Maybe it’s moving every few months crashing on a friend’s sofa while lining up visits, or walking the streets of the city every free minute to feel out the perfect neighborhoods and looking for “For Rent” signs.
One thing is for certain though. There is a clear love-hate relationship with real estate agencies. If your budget is on the lower end, or you just arrived to a city and don’t plan to stay in the same place more than six months, you may have trouble justifying paying the agency fees every time you move. But maybe you do decide to work with an agent to see if you can get more bang for your buck or because their agency gives you access to many more services and you won’t have to worry about anything. Or maybe you are the kind of person that thinks that things only get done when you make them happen.
All this is to say that, depending on your goals and expectations, calling on a real estate agent for your property search may or may not be a worthwhile expenditure.
How to choose?
First off, you must decide what you want. By this I don’t mean “a charming flat in a lively neighborhood with East-West exposures, in the top ⅓ of the floors of the building”. I mean do you want to rent or buy a place? If renting, how long do you plan to stay? How big is your budget and contingency? What is your credit score like? Can you afford to take on more debt? What is your negotiation power? How much do you know about real est
Overall, it is important to have a realistic view of your situation and what you can and can’t do. Based on this and your desire to rent or buy, you can begin to weigh the pros and cons of using a real estate agent.
If you are still unsure whether you should rent or buy, take our handy #TrovitQuiz and find out.
When to trust yourself and just do it: renting a property
As a general rule, if you are looking to rent a place, you can do almost everything an agent can do. If you had the time, you probably already did 80% of the work anyway. So by the time you would have made it to the agency, you would know what neighborhood you want to live in, what type of public services and shops are around, what public transport is available, or even the buildings and flats or houses you are interested in. The agent has nothing more to do than call the owners and set up viewings. You must think if that’s really worth the fees you will pay?
Bottom line, if you are looking to rent and you have informed yourself about the market, you are most likely better off using the tools at your disposition and cutting out the middleman. If you are interested on learning how to do it by your own, check out these people who went through the process themselves.
However, if you don’t have the time to make a thorough research, you live abroad and need to relocate to an unknown place, or just don’t feel like doing the homework, by all means use the real estate agency. Also, if you are interested in high end luxury or new build properties, accessing the owner may be a bit more difficult and restricted. If you are sure of what you want and don’t have to empty the rainy day fund to access the property, go see an agency. Here’s a handy guide on how to choose the right agent for you.
Buying a home without an agent is trickier, though
If you are interested in buying a property, doing things yourself becomes a bit more complicated, but definitely not impossible. Most countries let individuals buy without going through a real estate agent, but it is in your interest to familiarize yourself with local regulations.
Next, approach the house hunt seriously. Do all your homework and know the local market like the back of your hand. Find out what comparable properties sold for, the price trends, get pre-approved financing or proof of funds as well as getting all your paperwork in order. All this will make you more credible to the buyer and protect yourself from them trying to rip you off. You can check how to do these things properly in our article the most common mistakes first-time owners make.
A few things to keep in mind are how the real estate agent gets paid. If the buyer is paying the seller’s agent’s commision as well as the buyer’s agent’s commision, what happens to the buyer’s agent’s commision if you don’t have one? Beware that some sellers may insist on keeping all the fees without saying anything to you. This is a an argument that can be used to lower the sale price a bit. There is also a rather glaring conflict of interest when using an agent. If they are paid exclusively on commision, it is in their interest that the sale goes through as fast as possible and at the highest price possible as their commision won’t suffer from the price drop and they spend the least amount of time working for it. So search for an agency that assures the quality of their home advisors.
An alternative to using a real estate agent is to hire a real estate lawyer. They will defend your interests through the contracts and take care of the paperwork, while avoiding the conflict of interest. Plus hiring a lawyer might cost much less as they are paid per hour and not on commision. Discover more about this kind of attorneys do here.
Over all it is possible to rent or buy you home without going through an agency if you are motivated and can/want to keep the control of the whole process.