Most Kenyans always consider homebuying without an agent. In fact, very few buyers would purchase homes without a real estate agent or broker.
Although many for-sale-by-owner (FSBO) sellers will pay a commission to a buyer’s agent, some will not. Some want to sell without any real estate agent involved in the transaction. In the industry, these types of sellers are considered unrepresented.
Homebuying From an Unrepresented Seller
An unrepresented seller might decide against hiring a real estate agent so that they can save money by not having to pay a real estate commission. But, in some cases, this approach can backfire, especially when it can be the case that hiring a competent agent with effective negotiation skills can end up saving you money.
Agents in the industry see a lot of FSBOs underprice, which is favourable for the buyer. It’s also common for a homebuyer to wonder if the seller is hiding a defect or some other problem because they don’t want an agent involved, which is also possible.
Beware if you are trying to buy a home directly from an unrepresented seller. The seller may not know what they are doing or might be taking advantage of you; either way, it could be problematic.
Risks of Homebuying Without an Agent
Note that some homebuyers, especially first-time homebuyers, are wary of real estate agents. They think that real estate agents care only about closing the deal and not about them. A small percentage of real estate agents are like that, but the larger percentage care deeply about providing quality service and treating clients honestly and ethically.
If you are homebuying without an agent :
- You’ll have to do your own negotiation. Negotiating an offer is very different than, say, buying a car, because the risks in buying a home far exceed price considerations.
- You won’t have a neighbourhood specialist on which to rely. Agents who sell in certain areas know facts about that neighbourhood that a seller might not disclose.
- You might not receive all of the seller disclosures to which you are legally entitled. Sellers might not purposely withhold a disclosure, but you likely will not know what to request.
- You might pay more for closing costs than is customary in your area. Sellers might make you pay for everything, and you won’t know the difference.
- You’ll be left to decipher piles of paperwork filled with contract language. An agent can explain the difference between a disclosure and an agreement, and help you to understand what you sign.
- You’ll find your own mortgage. You won’t know if your lender has a reputation for closing on time or whether you’re getting the best rate and terms.
- You’ll be on your own to determine the types of inspections you should perform. Most buyers don’t know how to spot potential problems or know how to determine if a sewer inspection is necessary.
The Bottom Line
Before buying a home directly from an owner, you should consider ways to protect yourself from risks that can be costly. Using a buyer’s agent and hiring a real estate lawyer to answer questions and review contracts can minimize risk. Also, do your own research to learn about home values, schools, and transportation in the area.
