Buying a home without a realtor in Miami can save you $14,250 on real estate commission alone.  iBuyer,  selling or buying your home without a real estate agent, promises a simple and convenient transaction.  However, you can end up losing more than what you save on commission if you don’t do your due diligence.

What Is iBuying

iBuying is two-fold–an online real estate company can evaluate your listed home (seller) and make you an offer, or you can research all information on a listed home (buyer) and make an offer to the seller.

The middle class is facing serious housing challenges, but if you can afford to buy a new house and decide to handle the process yourself, here are four things you need to know:

 Reduced Commission

Saving is the main reason for iBuying, and you can save big if you don’t make costly mistakes elsewhere.  For example, you can save $14,250 on commission alone if you buy a home without a realtor in Miami.

The median listing price in Miami is $475,000. If you negotiate with the seller’s agent yourself, you will get half of the commission that the seller pays to both buyer and seller’s agents.  

Usually, the commission is between 5% to 6% divided equally between both agents.  For a home that costs $475,00, you will get as much as $14, 250 ($475,000×0.03).

You get the 3 percent commission that would have gone to your realtor if you hired one.  You still need to negotiate the best price on the home you want to purchase.  The commission and the fair value of the house are two different things; don’t confuse the two.  

Potential Legal Issues

The moment you decide to go solo on your home buying process, you forfeit the expertise that a realtor would bring to the table.  Now for that savings on realtor commission to add up, you have to familiarize yourself with the real estate closing documents.

After the 2008 Housing Crisis, Congress passed, and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

The law has strong mortgage regulations, which can save buyers time and money.  The most important provision is the Closing Disclosure.

The Closing Disclosure is a five-page standardized form that provides final details about the mortgage loan you have selected.  It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage.

For even more in-depth knowledge of the home buying process, the Consumer Financial Protection Bureau (CFPB), which Dodd-Frank created, has tons of documents that will guide you through every step of the home-buying process.

Lenders and Inspectors

Great realtors always have established relationships with various lenders and excellent inspectors.  If you mess up either one of those two things, you will end up paying a lot more than what you save on commission.

The CFPB recommends that you shop for rates; get at least three quotes from 3 different lenders. That process can be dull and time-consuming, but you can’t skip it.  You will regret it later if you do. 

The internet has plenty of horror stories about cracks in the foundation, rusty pipes, termites, or all of them right after closings.  Do not try to save on hiring an inspector; you need to hire a seasoned inspector and check her credentials and better business bureau’s reviews.

Final Utility Bills, HOA, & Others

Are you going to take over the solar panels’ payment? This question, as mentioned earlier, is the type of item you need to have answered before closing.  You have to get the Closing Disclosure three days before closings. 

You take your time and review the closing disclosure.  You want to make sure that no utility bills are past due and, HOA and golf membership dues are prorated accurately. 

If you decide to buy a home without a realtor, you can’t skip steps. You have to acquire neighborhood knowledge, including local history, information on the house you want, and comparable sales.

Should You iBuy?

iBuying is easier for sellers than buyers.  As a seller, your only risk is you might sell your home for way less than its actual value.  However, as a buyer, the risks are compounded. If you have the time and are willing to do your due diligence, then go ahead and “iBuy.”