Can I represent myself when buying a Crown Point, Munster, or Chesterton home?  What most people who ask this question really mean to say is, “Won’t I save money (translated commission) by doing it myself instead of using a Realtor?”  The answer to the first question is, Yes.  You absolutely can, and you have every right to represent yourself when buying a home.  You can find homes for sale by owner in the newspaper, call to set up showing appointments for yourself, negotiate on your own behalf, etc.  You can hire the appraiser and an inspector.  If you’re going it alone you will probably at a minimum need to hire an attorney to draw up the contract to purchase, but beyond that you can do it all for yourself, drawing on your own life experience to help guide you through every decision until closing.

The answer to the second question, “Will I save money by doing it myself?” is NO.  As a homebuyer, doing it yourself, you will not save money by not using a Realtor, and you may in fact spend more.  There are many reasons for this, primarily including who pays commissions in a Real Estate transaction, and higher average sales prices for homes for sale by owner.

In a Real Estate transaction the seller generally pays all commissions, both to the listing agent representing the seller, and to the buyer agent representing the buyer.  If this is your first Real Estate purchase this may not make sense on the surface (click here for a lengthier discussion on agency).  However, all commissions are paid out at closing by the seller, NOT by the buyer.  The bottom line is the buyer does not pay commissions.  Just like at the car lot, the buyer does not come in and have to pay a commission to the sales person who sold them their brand new car.  That commission is paid by the dealer (seller).

In addition, homes listed for sale by owner tend to be advertised for a higher price than like homes listed with a Realtor.  This is because a Realtor will show sellers how much homes are going for in their market at that time by providing a CMA (Comparative Market Analysis), and will use that information to price their home competitively with other homes on the market.  And again, if you’re looking to purchase a home that is listed for sale through a Realtor you need to keep in mind two things.  First, the seller pays all Realtor commissions, and second, and just as importantly, that Realtor is professionally representing that seller only.  They will use all their skills to negotiate and secure the highest sales price possible for their sellers – treating the buyers fairly through the entire process – but representing the seller’s interests above all others.

So, the question, will you save money by representing yourself ?  No, you’ll probably end up paying more for the house you ultimately purchase, and since commissions are paid by the seller, AND the seller has professional representation with their Realtor shouldn’t you have professional representation too?