How to Buy a House Without a REALTOR®
11 Min Read | Published: August 5, 2024
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Explore the process of buying a house without a real estate agent, including benefits, challenges, and essential steps to navigate the home-buying journey independently.
At-A-Glance
- You can buy a house without a real estate agent and no laws require you to have an agent present when closing on a home.
- If you opt not to hire a real estate agent, you’ll need to review contracts, participate in negotiations, and find properties without the support of tools like a Multiple Listing Service (MLS).
- Much of the benefit of using a real estate agent is their expertise, which saves you time from needing to understand local laws and markets intimately.
Buying a home is one of the most significant financial decisions you’ll make. So, it’s only natural that you may look to save money anywhere possible. Since real estate agent commissions tend to come in at around 3% for the seller’s agent and 3% for the buyer’s agent, that can seem like a logical place to start cutting.1
Legally, you can self-represent and buy a house without the support of a real estate agent, and you’re not required to have a licensed agent present to close on a home.2 If you have the time, know-how, and desire to learn, there’s no reason you can’t take on buying a home without an agent.
In this article, we’ll explore how to buy a house without a real estate agent and the benefits and risks you’ll want to consider before going it alone.
Did you know?
While the terms are often used interchangeably, real estate agent and REALTOR® have different meanings. A real estate agent is anyone who is licensed to assist people with buying or selling real estate. A REALTOR® is a member of National Association of REALTORS® (NAR), America’s largest trade association. With this membership, members agree to abide by the organization’s strict Code of Ethics, pledging to uphold integrity, honesty, and client interests.3
Pros and Cons of Buying a House Without a REALTOR®
| Pros | Cons |
|---|---|
| Complete control of the buying process | No access to professional tools like MLS |
| The chance to save money (although sellers are typically responsible for fees) | Must learn end-to-end processes, legal agreements, and how to negotiate |
Pros
- Potential to Save Money
While some prospective home buyers cite avoiding commission as a reason for buying a house without a real estate agent, in reality, the seller typically covers commission for both the seller’s agent and the buyer’s agent. You may only benefit as the home buyer if the seller is more willing to accept a lower offer from you since they won’t be shelling out up to 3% to cover the buyer’s agent commission. - Complete Control of the Process and Conversations
Without a buyer’s agent acting as the middleman, you’re free to communicate directly with sellers and their agents to get any questions answered and negotiate on price. This access may help to give you a greater sense of control over the process.
Cons
- No Access to Professional Tools
Real estate agents have access to Multiple Listing Services (MLS). Access to these private databases gives agents a leg up since they can obtain details on properties, sometimes before they’re released on other public-facing websites. - Need to Learn End-to-End Process
Having an expert on your side means guidance every step of the way to help you ensure you don’t miss anything important. - Must Decipher Legal Agreements
Real estate agents have expertise in state and local real estate laws. Many agents are experienced in contracting and know potential warning signs to look out for. In lieu of a real estate agent, you may need to hire an attorney. - Must Handle Negotiations
Because many real estate agents are in the housing market 40+ hours a week, they know the going price for comparable homes in the area.
How to Buy a House Without a REALTOR®
If you’re interested in navigating the home-buying process without a real estate agent, below are some steps you’ll want to take.
- Define Your Budget
The first and most crucial step in home-buying is figuring out how much you can spend. This includes determining how much money you need for a down payment, what monthly mortgage payment you can afford, the price of closing costs, and the cost of homeowner’s insurance. Also, consider how you’ll pay for home repairs in the first few months after buying, should the need arise. - Consider Seeking Pre-Approval for a Mortgage
If you plan to secure a mortgage to finance the home, getting pre-approved can help you move more quickly when the right listing pops up. During pre-approval, your lender will check your credit and ask you to submit pay stubs, tax returns, and information about assets and debt. Once the lender verifies your financials, they may issue a preapproval letter, which is the amount you’re eligible to borrow. Typically, preapprovals are good for 30 to 60 days.4 - Look for Homes and Areas You Like
Sixty percent of home buyers cite neighborhood quality as the most important metric for buying a home. Beyond the neighborhood, convenience to friends and family also ranked highly for 45% of buyers, according to the latest NAR profile of home buyers and sellers.5 From these numbers alone, it’s clear location is a big deal in the home buying process, and it’s worth your time to do deeper research. If you’re planning to buy in an area you’re already familiar with, this may be the most straightforward part of the process. Buyers who know which neighborhoods or areas of town they want to be in will naturally have fewer listings to comb through. - Conduct Thorough Research on Comparable Home Sales
It’s critically important to know what price you should be offering based on comparable homes (comps) in the market. Look for homes in similar neighborhoods, about the same size, and with the same number of bathrooms and bedrooms as the one you want to buy. While real estate agents are often the most educated regarding comps, you can leverage online tools to review prior listings that sold in the last few months to come up with an appropriate price. - Request the Seller’s Disclosure
In most states, a seller must share any known issues or material defects with prospective buyers. However, sellers may avoid disclosing potential issues in states that may not have these requirements. Regardless of your state, be sure to ask the seller targeted questions about the home’s condition, including the last dates of major repairs or renovations, including when the roof, HVAC, and other major systems were last replaced or serviced. It may also be smart to include a disclosure contingency in the contract. Doing so means you’ll have legal backing to pull out of a deal if the seller doesn’t disclose certain home issues.6 - Hire a Lawyer
Due to the complexity of real estate transactions, a lawyer is a professional you may want in your corner when navigating home buying without an agent. A real estate attorney can help review purchase contracts and may even attend the closing. Note that some states require a lawyer to be present at closing, so it’s important that you check your state’s standards and have the appropriate parties involved.7 - Make an Offer
The offer letter serves as your intent to purchase the property. It will include a number of details, including the home’s address, the projected closing date, how much you’ll pay for the property, and details about any contingencies. - Schedule an Inspection
Unless you’ve decided to forego the inspection and purchase a home as-is, you’ll need an independent home inspector to review the property. Inspectors typically charge a flat rate and will review the home for damage, environmental, or safety issues. If you can, walking with the home inspector through the property is a great way to get acquainted with potential areas of concern as the new homeowner.8 - Negotiate
You may decide to negotiate further once you have read the results of the inspection report. For example, if an inspector finds damage to the roof and recommends replacing it, you may want the seller to come down on the price for the amount you’ll spend to replace the roof or get it replaced before you close. Depending on how many offers a seller receives, there may be one or more rounds of negotiations. - Arrange Financing
The amount you’ll need to finance and the method you choose depends on your financial situation. If you’ve saved a large down payment, you might decide to borrow the remaining money from a family member instead of a mortgage through a bank. If you’ve already been pre-approved for a mortgage, now you’ll need to apply and let the lender make its final decision. Lenders will also require an appraisal before issuing the loan, and they’ll hire the appraiser and pass along the cost to you as part of the larger financing agreement.9 - Attend Closing
The closing is the finish line of any real estate transaction. By the time you arrive, everything should be complete, and you should have received documentation to review in the days prior. On the day of closing, you’ll walk the property again to ensure everything is in working order, then proceed to complete the paperwork, culminating in the transfer of the deed. - Celebrate!
Once everything is closed, it’s time to celebrate because you’re now the proud owner of your new home!
While this may seem like a lot, much of the process will happen simultaneously, especially after you make an offer that’s accepted. Most of the time you’ll spend buying a home is finding the right property, which can take months if you have specific requirements.
Should You Buy a House Without a REALTOR®?
The answer to whether you should buy a house without a real estate agent comes down to your unique situation. In 2023, 89% of home buyers purchased their home through an agent or broker.10 Yet there are a few times when it may make more sense for you to explore buying a property without an agent’s expertise, such as when:
- You Know the Seller
You may have a friend or family member who wants to sell, and they’ve already identified you as the prospective buyer. These transactions tend to be fairly straightforward, especially if you’ve already agreed on a price. If you trust the person selling you the home, you may be able to close the transaction privately without the support of an agent. - You’ve Bought Homes Before
Real estate agents can provide a wealth of education to buyers, especially first-time buyers. If you’ve never been through the process of buying a home or securing financing, it may make sense to use an agent for your first transaction, learn what you can, and plan to do it yourself next time. However, if you’ve bought many homes in your lifetime and understand how transactions work, you may feel confident in navigating the process alone. - You Understand the Industry
If you’ve worked in the industry before, whether for a lender, agent, or otherwise, you may have industry knowledge that gives you a leg up when it comes to home buying. You may also have connections in the space that make it easier to find a lawyer, home inspector, and other professionals. - You Have Time to Spare
For many prospective home buyers, time is a critical factor. If you’re not in a season of life where you can dedicate the time to research properties and the buying process, it may be best to leave the heavy lifting up to an agent.
The Takeaway
The steps for buying a house without a real estate agent are straightforward, but going this route will require a bit more time and effort on your part. It’s also critical that you do your due diligence to familiarize yourself with the process first. You’ll also want to hire an inspector and attorney to help safeguard your interests when buying your home.
1 “How do real estate agent fees and commissions work?,” Bankrate
2 “Who should I expect to see at my mortgage closing?,” Consumer Financial Protection Bureau
3 “When Is a Real Estate Agent a REALTOR®?,” National Association of REALTORS®
4 “Exploring Loan Choices: Get a preapproval letter,” Consumer Financial Protection Bureau
5,10 “Highlights From the Profile of Home Buyers and Sellers,” National Association of REALTORS®
6 “Failure to Disclose: Should Buyers Sue Sellers for Not Revealing Problems With the Home?,” Realtor.com
7 “Do I need an attorney or anyone else to represent me when closing on a mortgage?,” Consumer Financial Protection Bureau
8 “What Does a Home Inspector Look For? A Whole Lot,” Realtor.com
9 “Understanding Appraisals and Why They Matter,” Federal Deposit Insurance Corporation
Brooke Joly is a writer on a mission to unravel the mysteries of personal finance and make them accessible to the everyday reader. When she’s not behind the keyboard, you can find her enjoying the outdoors in Charleston, SC.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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