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(AP Photo/Keith Srakocic)
(AP Photo/Keith Srakocic)

Less than two months ago, Joanne Cleaver sold her home in a suburb of Charlotte, North Carolina, for $725,000 in an unusual way: Facebook Marketplace.

She did not hire a real estate agent, lining up a lawyer instead to do the closing, and she declined to pay a commission to the buyer’s agent — a standard practice of the industry which for decades has put the burden of commissions of around 5% or 6% of the home’s sales price on the seller, though the fees were split between agents for the buyer and the seller. Cleaver, 66, estimates that she saved $25,000 in real estate fees, money that she pocketed.

Changes that alter the way real estate commissions are advertised and paid went into effect nationwide in August, and some people are touting the “death of the real estate agent.” Like Cleaver, some people are proposing that homebuyers simply pay a flat fee to a lawyer to draw up the paperwork. No agent needed.

It’s a scenario that many real estate agents feared would be the consequence of a lawsuit brought against the National Association of Realtors by a group of homeowners who accused the powerful industry group of creating an unfair collusion between the seller and the buyer’s agents. For decades, fees paid to the representative for the buyer came out of the proceeds paid by the seller to their agent.

Now the two sides have been uncoupled, and people like Cleaver are going at it alone.

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Although sellers can continue to pay for the buyer’s commission, it’s possible that some sellers may not, leaving the buyer responsible for a share of the commission. It’s an extra cost that could be especially burdensome for first-time buyers, who are already scraping together the down payment and the closing costs just to afford a home at a time when the cost of housing has hit a record high.

And unlike closing costs, which can be built into the loan, there is currently no system in place for lenders to also wrap the commission into the loan. That means that some first-time buyers may try to buy the home with no agent.

But real estate professionals warn that the list of things that can go wrong in a property transaction is long, and the downside if they do go wrong is steep and financially painful, from discovering mold to finding a faulty foundation or a termite infestation — all things that should be flagged on an inspection report, but sometimes aren’t detected.

Beyond potential problems with the home itself is the cobweb of regulations and paperwork that both buyers and sellers need to navigate, as well as the growing problem of title and wire fraud.

Cleaver is the first to point out that she has a big leg up on most people: As the former real estate editor of the Milwaukee Journal Sentinel and the author of a book on real estate, she knows more about real estate than most. “I am not a rookie,” Cleaver said.

Here are some issues to consider before deciding to go it alone:

What Is That?

During the inspection of the three-bedroom she was hoping to buy in Moreno Valley, California, Brenda Cea, a software engineer, discovered that there was a damp spot on the ceiling.

The seller initially refused to allow a roofer to check the property, claiming that the inspector had already done a walk-through. Cea’s agent insisted and the roofer discovered that a piece of the roof was cracked.

“Me personally, I strongly needed an agent. It was my first time ever just purchasing any property or anything big like that,” said Cea, 29, who closed on the house in the low $500,000s.

Before she moved in this spring, she also discovered that the seller had absconded with the curtain rods. With the help of her agent, Elena Flores of eXp Realty of Southern California, Cea forced the seller to pay for the roof repairs and to give her a $500 credit for the rods.

More Negotiation

Leaks, mold, pests, including termites, foundation problems and septic issues are among the more difficult to untangle, especially if the buyer is on a tight timeline.

Earlier this year, Brent Wofford, a real estate agent, helped a buyer who was living in Colorado negotiate the purchase of her new home in Arizona.

Her home in Colorado had already been sold, when they discovered a major issue with the septic tank on the property.

“All of her personal belongings were in a moving truck,” Wofford said, and the buyer was facing a $1,000-a-day storage fee if her furniture was not dropped off at the appointed time.

Wofford negotiated that the seller would repair the septic system. Next, he said he negotiated an “escrow hold back,” where the lender agreed to close, on the condition that the repairs be completed afterward. The cost of the repairs: $15,000.

How do you do it?

When her daughter unexpectedly moved overseas, taking her four children with her, Cleaver was suddenly filled with sadness at the sandbox and play area she had set up in her backyard for her grandchildren.

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She decided to sell the sandbox and toys online — a process that allowed her to familiarize herself with the fraud that proliferates on Facebook Marketplace.

After that, she sold a piece from Restoration Hardware which had cost her $8,000, carefully vetting the buyer by doing a reverse address search and insisting they pay cash — she netted just under $4,000.

Finally, she listed her home on Facebook. She vetted each potential buyer through reverse address searches and by checking their LinkedIn profiles. She used the same closing lawyer she had used to buy the house, who made sure that the buyer’s money was moved into an escrow account.

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She admits that her hand was over her heart as she waited for the sale to close earlier this summer. It went through and she now lives in a condo in New Hampshire in a retirement community.

Even as she jokes that she wants her obituary to say that she saved $25,000 by not paying a real estate commission, she is also the first to caution: “I would never recommend a very first-time buyer do it on their own.”

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