Top 5: Cost-Effective Ways to Purchase Real Estate

One of my friends, a professor from the UK, recently reached out to me with a question about realtor commissions for selling her house in Eugene, OR. We discussed the process, then I told her I would list it at a discount of 5%. She was surprised when I told her the average realtor commission is 5.49% across the nation. She recalled that when she bought her house six years ago using a buyer’s agent, she was told that she didn’t have to pay the buyer’s agent commission, making it seem like a free service. So, she was puzzled and upset to learn that as a seller, she now had to pay a 5% commission.

What her buyer’s agent didn't explain was that the seller typically pays the commission, which is then split between the seller’s and buyer’s agents. This averages around 5.49%.

Her question got me thinking about realtor commissions in different countries. Research shows that in 2023, only five countries have higher realtor commissions than the US. In the UK, for example, selling a house costs the seller an average of just 1.5% in realtor fees. This raises an important question: Do higher fees always result in better services? According to my friend, the answer is no—she didn’t even like her buyer’s agent here in the US!

In recent years, more buyers are finding ways to purchase real estate in the US without using buyer’s agents. By doing so, they can receive the buyer’s agent commission as a credit from sellers or enjoy a significant price reduction. For example, on a $500,000 house, a 2.5% commission equates to $12,500 in savings!

However, real estate transactions involve a lot of paperwork, negotiations, and strict timelines. Can buyers manage these transactions on their own?

The simple answer is YES.

Here are the top 5 resources for buyers looking to navigate the process independently:

1. Eforms.com: This site offers a variety of fillable forms to write an offer on your own. It's free to use, but you need to know which forms you're looking for and find them individually. No buyer’s agent is involved.

2. Finaloffer.com: This platform simplifies writing an offer, but buyers must work with a buyer’s agent to write on the listings. Listings on Finaloffer.com still require input from a seller’s agent, meaning two realtors are involved, along with their associated fees.

3. Theofferhouse.com: Buyers can easily write an offer on any home they’re interested in within 10 minutes. The site manages all negotiations and timeline reminders in one place. They are about to launch their service and are going to offer a promotion of a flat fee of $499 (regularly $999) for six months of unlimited transactions. No buyer’s agent is involved.

4. Forsalebyowner.com: Transactions from properties sold directly by owners represent about 7% of the real estate market. Sellers who handle their own sales are more likely to work directly with buyers, potentially saving on commission fees.

5. Lawdepot.com: Similar to Eforms.com, Lawdepot.com offers free, fillable forms. However, you may need to search for individual forms and might have to use multiple websites to find everything you need.

By using these resources, buyers can potentially save tens of thousands of dollars on commissions and still navigate the complex process of purchasing a home. While working without an agent requires more effort and knowledge, the financial benefits can be significant.