Most of the time most people don’t even consider buying a home without an agent. But the fact is that in any given year approximately 20% of home sales involve transactions completed without a real estate agent. And a large share of these agent-less transactions are for investment purposes. So for anyone interested in pursuing real estate investing, here’s a guide to buying a Detroit home without an agent.
Search and Find
Because you won’t have an agent (and her access to the MLS) to do it for you, the process of buying a Detroit home without an agent begins with searching for likely properties. And that means scouring local classifieds, using Craigslist, checking local foreclosures, and just driving around. Generally, you’ll want to search for distressed properties that can be acquired at a fairly low price.
Calculate ROI Potential
Your next step is to do a market analysis and an investment property analysis to determine whether the property will be a good investment – whether you a re likely to see a reasonable ROI. You can even use the metrics a real estate agent would use, for example, the cap rate and the cash-on-cash return. These analyses to choose the right location and the best investment strategy for that location are critical.
Get an Attorney
Once you’ve found a likely property and determined that it would be a good investment, the next step in buying a Detroit home without an agent is to locate and retain the services of a good real estate attorney. For without the expertise and assistance of an agent, you will need another professional, the attorney, to deal with contracts and the myriad other documents and to handle the legal complexities.
Make Offer and Begin Negotiations
When you’ve got an attorney lined up, it’s time to make an offer for the property. When you do, it’s a good idea to have your attorney draft the offer so that it clearly spells out that you’re offering less than the listing price and that the seller will not have to pay any buyer’s agent commission because you are buying a Detroit home without an agent. Your offer should also include any and all contingencies to protect you when the deal goes through or to protect your earnest money deposit if the deal happens to fall through.
Then, get ready to enter into negotiations because it often happens that the seller doesn’t accept your offer. So the back-and-forth of offer and counter often begins and continues till you reach an agreement on the offer.
Get Ready for Inspections and Appraisals
After your offer has been accepted, you should be prepared to deal with inspections and appraisals as the next step in buying a Detroit home without an agent. And don’t skip or short-cut the inspection. It’s for your protection so that you don’t discover major problems after it’s too late. If it’s not a cash deal, then you’re lender will have to have an appraisal to make sure the property is worth what you’ve offered.
Close the Deal
The final step in buying a Detroit home without an agent, just as it is with an agent, is closing the deal, which involves a ton of paperwork. Just make sure your attorney is present to review all contracts and related documents. After the money changes hands and the ink dries, the property is yours.
Keep in mind that this guide to buying a Detroit home without an agent merely highlights the most important points for investment-property buyers who want to go it alone. But, hopefully, it will be enough to help you get started and make sound property investments.