While it may not be for everyone, it is possible to buy a home without a real estate agent. We’ll show you what questions to ask when buying a home without a realtor as well as what to look out for.
What to Know When Buying a Home Without a Realtor:
Let’s start off by looking at some common beliefs about buying without an agent. Are they true, false, or somewhere in between?
True, obviously, or this would be a very short article.
False. You can make an offer on any home that you could if you were represented by an agent.
Tricky. If you’re not careful, this can definitely happen. Many listing agents have contracts with their clients that have variable commissions; if the buyer doesn’t have an agent, the listing agent automatically gets the “leftover” commission that would normally go to the buyer’s agent.
True. You’re dealing with multiple legal contracts and processes when you buy a home, and taking this on without a lawyer is very risky. A lawyer’s services will generally cost far less than the commission collected by a buyer’s agent. (Also, remember that in some states, a real estate attorney is required even when you have an agent.)
Toss-up. Every seller is different. Some might be happy to work with you, and others may not be interested. If you’ve done your homework, can offer proof of finances, and have all your paperwork in order (like a pre-approval), you’ll raise your chances of a good reception from a home seller.
False. There’s debate as to whose money pays the agents, but for most people, the important part is this: it’s the seller who determines what percent of a commission is paid to their own agent and to the buyer’s agent. If you can negotiate with the seller to lower the price of the home in exchange for them having to pay nothing to a buyer’s agent, then that’s money you can save. Learn more about real estate agent commission.
True. Usually, a licensed agent is required to be present for inspections or appraisals, and usually, this is the buyer’s agent. You may be able to get the listing agent to agree to be there for these tasks, in the interest of closing the deal. Again, everyone is different; some listing agents will be happy to go the extra mile to close the deal, while others will insist on at least a partial cut of what would have been paid to your real estate agent. Time to practice those negotiation skills.
How to Buy a House Without a Real Estate Agent
Start as you would with any home purchase — by searching for the right home that you can afford in the right neighborhood. There are plenty of online real estate resources. On Redfin, you’ll see all the homes for sale with listings updated every 15-30 minutes.
- Find a Real Estate Attorney
Before you get too far down the road, find and hire a good real estate attorney to work with. You’ll need one as soon as you start dealing with paperwork. Get their services lined up ahead of time, so you can move quickly on the right home.
- View Homes
Once you find a home online, you should see it in person. You can attend an open house, or call the seller or listing agent to ask for a tour. You should be clear with the listing agent that you are buying a home without an agent. If the listing agent asks you to sign any forms, have them reviewed by your attorney first.
- Get Pre-Approved
Before you make your offer, get pre-approved for a mortgage with a lender. This will tell you how much your mortgage loan, interest rate, as well as the monthly payment, will be. It also reassures the seller that you can back up your offer, and that you’re a serious buyer.
- Make & Negotiate an Offer
If you find the right home, you’ll want to make an offer. The listing agent may expect to collect the share of the commission that would normally go to your agent. Make sure your offer clearly spells out that you are offering less than the listing price with the expectation that the seller will not need to pay out the buyer’s agent’s share of the commission. This should be agreed to in writing and reviewed by your attorney. Also, be prepared to renegotiate and make sure that your offer includes all the contingencies that will protect your earnest money if the deal falls through.
- Deal With Inspections and Appraisals
After you make an offer, you’ll need to deal with several tasks. Two of the most important are the home inspection and appraisal. You’ll need an agent present during both of these tasks; usually, the buyer’s agent handles this. Since you don’t have a buyer’s agent, you’ll need to get the listing agent to pick up the extra work in regards to the home inspector and appraisal. Some may be happy to go the extra mile to close the deal, while others may demand compensation or a flat-fee.
- Close the Deal
Closing the home purchase involves plenty of paperwork. This is where your attorney really earns that fee. Make sure they’ve reviewed all contracts & forms; you might need to sign well over one hundred documents. Once you’re done, the ink dries, and the seller receives the purchase funds, the home is yours! You can now also completely close on your home virtually with eClose.
Note: The information on this page is not intended to be legal advice. Before making a home purchase without an agent, you should consult a licensed and qualified real estate attorney.