The Risk of Buying a Home Without a Real Estate Agent

The law doesn’t require us to hire a real estate agent when buying a home. A home is a big-ticket item that making even a single wrong move could spell disaster. Home ownership requires a long-term commitment. Hiring the right agent will help us live comfortably with our chosen lifestyle and avoid the pitfalls that inexperienced home buyers will certainly make. Know the risks of buying a home without a real estate agent. 

Limited options  

When you decide to buy a property on your own, you don’t have access to important resources such as connections and key tools that real estate agents have at their disposal. As a result, your choices are limited. You only rely on online listings or classifieds for properties to choose from. You won’t even know if the property you’re interested in is already sold as some listings are not updated regularly. 

Taking too much of your own time 

Searching for the perfect home for your family takes time. When you’re doing this all by yourself, expect to spend the majority of your time focusing on planning your next move. You can definitely save time when you choose to work with an agent because they’ll do most of the heavy lifting for you.      

Buying an overpriced home 

Buying an overpriced home is surely bound to happen. You don’t know if the house is actually worth its asking price as you have no idea what home appraisals are for. If you decide to buy a property from a seller with an agent, you’re at a huge disadvantage. You have no experienced negotiator on your side. You are always at the mercy of the seller’s agent. He will likely set the price too high in order to earn a bigger commission. 

Buying a home with too many unforeseen problems  

When you’re out buying a home on your own, you’re most likely to skip some processes that cost money. One of the most important thing that you shouldn’t miss is a home inspection. A home inspection is an essential part of the home buying process. It can protect you from buying a home with inspection problems that would cost you too much money on maintenance costs.  

Missing some of the required paperwork 

A home purchase is not complete without completing tons of paperwork. This is the part where the agent really earns his money. He can review the contracts or documents and lets you know what you’re getting into. This is very important because buying a house is entering into a legally binding agreement. You have to keep your end of the bargain or suffer the consequences. 

You’re totally on your own if you choose to buy a home without an agent’s help. You must be sure that you know what you are doing and can live with the possible consequences. 

Things to Remember When Applying for a Mortgage

Most people buy a home by taking on a mortgage or home loan. People get excited over the idea that they’re finally going to have a place they can call their own. It is because of that overwhelming feeling that many people commit mistakes when taking on a mortgage. Here are the things to remember when applying for a mortgage. 

Know your credit score 

Your credit score will play a huge factor in getting your mortgage application approved and the interest rate that goes along with it. Get to know your scores from the 3 credit bureaus to have an idea of where you stand financially. When your credit score is 620 or higher, you’re in good shape. A lower score means that you’ll be charged with higher interest rates if ever your mortgage application gets approved. 

Pay off existing debts 

When your credit score is lower than 620, it’s not yet over. You can still raise your credit score if you can manage to pay off any of your existing debt and avoid taking on new ones. Put off any plans of making big purchases and work towards eliminating debt. This can work very well in your favor as you now have more money you can allot to pay for your monthly payments on your mortgage. 

Build up your cash reserves 

The lender is going to take a look at your bank statements. It will serve you well if you have managed to build up your cash reserves months before you apply for a mortgage. This will tell them that you are well prepared financially and you have adequate resources to pay for your monthly payments. Lenders will always place great emphasis on the risk they are going into by financing your home purchase. 

Have the necessary documents ready 

Applying for a home loan involves a lot of paperwork. You will have to prepare the necessary documents that the lender will require you to show. These are your recent tax filings, pay stubs, financial statements of your bank accounts, credit report, and all the other documents your lender will ask you to furnish. Prepare these documents beforehand to save time and effort on your part. 

Know how much you can afford 

By knowing how much you can truly afford, you are protecting your family’s quality of life and financial future. This means you have really done your part and shopped for the best available deal. Weigh all your options carefully as an approved mortgage is a long-term commitment. That means making the necessary sacrifices and adjusting your current lifestyle to be able to make your monthly payments on time. 

Easiest Ways You Can Get a Better House Financing Options

The most common way to buy a house is to get a mortgage. The problem is you need to qualify first before you can be approved to purchase a house. To qualify, you need to get a good credit score, a sufficient down payment, employment records, and enough savings plus stable income. A mortgage is a commitment which you need to religiously pay every month or else you will need to face consequences including losing your property to foreclosure. 


If you are thinking of other ways to finance your house, here are some options: 

  1. Live off one income

Paying off cash is the best way to acquire a property without a lot of hassles. For many, this is an impossible undertaking. However, if you’re a two-income household, one way to save is to live off a single income for a few years. If you and your partner are both working and receive decent income, pay all your dues with one income while you save another income for the house.  This method will be able to make you save 100% of your partner’s salary. This can be very difficult as it means you need to live a very humble lifestyle and sacrificing a lot of things for 3-5 years. 

  1. Sell Your Home and Buy Another One 

If your current home has plenty of equity, what you can do is sell it, take the profit and buy a new property. This method is ideal for homeowners with very expensive homes and they want to downsize it and live simpler. The profit that you will receive from the sale of your current property might be more than enough if you will purchase a smaller one from a Denver real estate agency.

  1. Get an Investor

Seek an investor and join your funds together to buy a house. There are also people who, like you, want to buy a house without getting a mortgage. Once you found your co-investor, look for a property that is within your budget. You can flip the home for a profit and then split the proceeds with your investor. 

  1. Use Seller Financing

Seller financing is another option if you did not qualify for a mortgage. This is how it works: You make an agreement with a seller that you will pay the loan every month and the seller signs over the deed of the property. Since you have the deed, you become the owner of the house and the seller is your lender who you need to pay each month until you pay the entire price of the property. Though this works well, in theory, the hard part is finding a willing seller. Many sellers are pessimistic about this method because it doesn’t give them enough security. 


Trick To Finding Your Dream Home In A Hot Market

A hot market usually means high demand and low housing inventory. In layman’s terms, it means more people are looking to buy a house when there aren’t too many for sale. This creates an atmosphere of tough competition among home buyers that anyone who gets to successfully buy a house is considered lucky. Finding your dream home in a hot market is tough but not impossible. The key here is to beat your competition by applying these tricks in finding your dream home in a hot market. 

You have the right connections 

It’s either you hired the right agent or know the buyer too well. In a hot housing market, having the right connections is key as it helps you stand out by being always a step ahead of your competition. You have access to resources and insider information that the other homebuyers don’t have access to. This advantage can certainly be applied to pocket listings. Pocket listings are homes put up for sale by owners who want to keep their privacy. Buyers are carefully selected and are usually by invitation only.  Only when you have the right connections that you’d be able to take advantage of this kind of situation.   

You have enough money to make an irresistible offer 

We all know that we need a huge amount of money to buy real estate. It is certainly an advantage if we have enough money readily available to make an irresistible offer while our competition is still getting pre-qualified or pre-approved. You have the chance to move quickly and convince sellers that you are the buyer with the best offer for their property. Sellers would always prefer buyers who can give them the best money for their investments and by having enough cash on hand, it enables you to do just that.    

You are persistent in searching homes for sale 

When competition is tough, you can always expect the houses you’re considering to buy get purchased immediately the moment you make your move. The key for you here is to keep on looking and you’ll eventually find a house without too much competition because others weren’t looking hard enough.  

You added your personal touch 

A seller who gets too many offers will get confused. You have to stand out in order for your offer to get noticed by the seller. A personal handwritten note can almost always do the trick. Tell your story as to why you’re the perfect buyer for his property and if he can relate with you on an emotional level, there’s no way the seller won’t choose you over your competition.  

You always have a backup plan 

Things can always go wrong with any Real Estate deal. If you come in prepared, you’ll know what to do if in case any of your plans don’t work. You don’t lose sight of your goals and you just keep on going until you have successfully bought your dream house in a hot market. 


Real Estate Brokerage Is Changing to a Virtual Brokerage Model

Real estate offices are closing all over the country. Real estate agents are hanging up their licenses in every state. The traditional bricks-and-mortar real estate brokerage is hemorrhaging, and all that keeps this archaic business model alive is consolidations. As offices close, some agents quit, but the survivors move their licenses to another sinking ship, a ship that looks just like the last one and often with the exact same name on the bow.

A large franchise office closes its doors, no longer able to keep the lights on after more than a year of operating in the red. The agents are worried sick, not knowing what they will do, until their savior walks in the door.

A broker from a large bricks-and-mortar across town with the same franchise offers to take all the agents in with the exact same contract terms: each agent pays $600 per month and keeps 100% of their commissions. The agents sigh in relief and quickly sign the new contracts like sheep to the slaughter.

Since the broker can’t generate enough leads for the agents, and since the agents aren’t selling enough to make the broker enough money on commission splits, any kind of split wouldn’t make sense for the broker today. A sharp broker will charge each agent a monthly fee. He laughs all the way to the bank, because with 60 agents paying $600 per month, he’s making $36,000 a month just for living.

Three years ago I sat across the desk from a franchise broker who looked at me and said, “Well, we’re feeding the business every month. You have to do that when times are tough. But we’ve been through tough times before, and we always come out okay.” I remember thinking to myself that was a silly thing to say coming from a man who told me he had no business plan, no budget for marketing, and no written vision for the future of his business. Unfortunately, that same broker just issued a press release that he is permanently closing the doors of his bricks-and-mortar and will be hanging his license with another bricks-and-mortar. Another consolidation.

This broker is merely jumping from one sinking ship to one that hasn’t sunk yet. The new ship has plenty of leaks, and it may take a while for folks on the Titanic to wake up. Bricks-and-mortar real estate brokerages that stubbornly refuse to bridge the gap to an entirely new business model will die a slow and painful death. Its one thing for brokers to ride their own ship down, but it is quite another thing altogether for those brokers to sell tickets to real estate agents with promises they can’t keep.

The most unfortunate thing about all of this is that the agents who think they are doing what it takes to survive are only re-arranging the deck chairs on the Titanic. Many of them truly do not know or comprehend how precarious their fate is. Many of them do have an uncomfortable feeling, and they know something is wrong with their business model. Just like so many of the passengers on the Titanic near the end who smiled and kept saying, “Don’t worry, everything always works out alright,” traditional agents continue to greet people with a smile and wait for the phone to ring. But the ship is tilting, and they are at risk. They just don’t know what to do.

Lease Option Real Estate Investing: Advantages

One creative way to get started investing in real estate is to use a lease option. The biggest advantage of using lease options to invest in real estate is –control. This method of investing, basically gives the investor the right to possess — be in control of — and profit from a property without owning it.

A real estate lease option contract is a combination of two documents.

The lease part of the contract is where the owner agrees to let you lease their property, while you pay them rent for a stated period of time. During the lease period, the owner cannot raise the rent, rent it to anyone else, or sell the property to anyone else.

The option part of the contract represents the right you purchased to buy the property in the future, for a specific price. If you decide to exercise your option to buy, the owner has to sell it to you at the negotiated price. The option part of the contract obligates the seller to sell to you during the option period — but it does not obligate you to buy. You are only obligated to make rental payments as agreed during the lease period.

When the lease option contract is written and structured properly, it can provide tremendous benefits and advantages to the investor. If the lease option includes the “right to sub-lease”, the investor can generate a positive cash flow by renting the property to a tenant for the duration of his lease, or lease option the property to a tenant-buyer for positive cash flow and future profits. If the lease option includes a “right of assignment” the investor could assign the contract to another buyer for a quick profit.

Lease option real estate investing, is a flexible, low risk, highly leveraged method of investing that can be implemented with little to no money.

High Leverage

It is highly leveraged because you are able to gain control of a property and profit from it now–even though you don’t own it yet. The fact that you don’t own it, also limits your personal liability and personal responsibility. Only if you decide to purchase the property by exercising your “option to buy”, would you take title to the property.

Little to no money

The real estate investor’s cost to implement a lease option contract with the owner requires little to no money out of pocket, because it is entirely negotiable between investor and owner. Also, there are a variety of ways the option fee can be structured. It can be structured on an installment plan, balloon payment or other agreeable arrangement between both parties. The option fee can even be as little as $1.00.

In order to secure the property for purchase at a later date, tenant-buyers typically pay a non-refundable option fee of approximately 2%-5% of the negotiated future purchase price to the seller. Depending on how the lease option agreement is written and structured, the investor could possibly use the tenant-buyer’s option fee money to pay any option fee owed to the owner.


Lease option real estate investing is a flexible method of investing because the terms of the agreement, like payment amounts, payment dates, installments, interest rate, interest only payment, balloon payments, purchase price and other terms are all negotiated between seller and buyer. Responsibilities of both parties are also negotiable. For instance, if the investor doesn’t want to act in the capacity of a landlord, he could specify in the lease option agreement that tenant-buyer will be responsible for all minor maintenance and repairs and the original seller will remain responsible for any major repairs.