While it may not be for everyone, it’s possible to buy a house without a realtor. Whether you’re looking into buying an investment property or are a first-time homebuyer, here are questions to ask when buying a house without a realtor as well as what to look out for when navigating the housing market on your own.
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What to know when buying a house without a real estate agent
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Let’s start by looking at some frequently asked questions about buying a house without a realtor.
Can one opt to buy a house without a realtor?
Yes, but keep in mind that every home purchase is unique, and you’ll have a few added responsibilities when taking the home buying process on solo.
If you work without an agent, can you only buy homes that are for-sale-by-owner (FSBO)?
No. You can make an offer on any home just as you would if an agent were representing you.
If you buy without a real estate agent, will the seller’s agent keep the extra commission?
If you’re not careful, this can happen. Many listing agents, also known as seller’s agent, have contracts with their clients with variable commissions. If the buyer doesn’t have an agent, the listing agent automatically gets the “leftover” commission that would typically go to the buyer’s agent.
Even if you’re buying a house without a realtor, do you still need to hire an attorney?
Yes. You’re dealing with multiple legal contracts and processes when you buy a house, and taking this on without a lawyer can be risky. A lawyer’s services will generally cost far less than the commission collected by a buyer’s agent. (Keep in mind that a real estate attorney is required in some states even when you work with a real estate agent.)
Will sellers take you seriously if you don’t use an agent?
Every seller is different. Some might be happy to work with you, and others may not be interested. However, if you’ve done your homework, can offer proof of finances, and have all your paperwork in order (such as a pre-approval), you’ll raise your chances of a good reception from a home seller.
You don’t pay for your agent anyway; the seller does. Does buying a house without a realtor save you any money?
There’s a 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 agent and 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.
Do you need an agent to be present for inspections and appraisals?
Usually, a licensed agent is required to be present for the home inspections or appraisal process, and typically, 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.
What to consider when buying a house without a realtor
Even if you’re ready to buy a house without a real estate agent, doing so may be risky. Before making a decision, here are some things to consider.
Why some buyers pass on working with a realtor
- You’ll save money. One of the biggest reasons buyers may choose to forego working with a real estate agent is to save money. By not having a buyer’s agent, you’ll have more negotiating power in your offer since the seller would only be paying a 3% commission rate vs the typical 5-6%, as long as the seller’s agent isn’t allowed to capture the full 6% commission. This would effectively save the seller thousands of dollars and make your offer stand out.
- Full ownership of the homebuying process. Without a buyer’s agent as the middleman, you’ll be working with the seller directly. You’ll have complete control and can communicate with the seller for answers and negotiations, potentially saving you time since you’ll be working on your timeframe.
Reasons to buy a house with a realtor’s help
- You may not have the market knowledge. The main appeal of working with a real estate agent is their expertise. Buying a home is one of the biggest financial investments you’ll make, and you’ll want to have an expert that understands the ins and outs of the homebuying process. If you choose to buy a home without an agent, you’ll need to spend some time doing the research yourself.
- Real estate language is complicated. If you opt-out of working with a buyer’s agent, you’ll be responsible for understanding and managing the complex paperwork that comes with a home purchase. Mistakes can cause a deal to fall through, and partnering with an agent ensures you’ll have an expert at your side to walk you through the process.
- Negotiating the right sale price and conditions can be tricky. Agents serve as the liaison between you and the sellers or seller’s agents. Negotiating on a home purchase takes skill, and deciding how much to offer is a crucial step when buying a home. Seasoned agents have neighborhood data and experience to help you find homes within your budget and understand what constitutes a good deal.
Should you buy a house without a real estate agent?
If you choose to go down the route of buying a house without a realtor, you’ll need to put in a little extra work to prepare yourself for the home buying process. Real estate agents have the industry knowledge and experience to navigate a home sale, so they can offer insights on what you should expect. They’re also assets when touring homes, negotiating with the seller, making an offer, and understanding the local market.
Another important consideration is your level of comfort when dealing with the paperwork involved in a home sale. Working with a real estate agent can give you peace of mind knowing that there’s a pro on your side who understands all the contingencies, legalities, and other fine-print that you may have missed.
However, if you’re comfortable undertaking the process yourself, here’s what you need to do when buying a house without a realtor.
How to buy a house without a realtor
1. Search for the right home for you
Start as you would with any home purchase — by scoping out your local housing market and narrowing down the list of neighborhoods to find homes for sale that fit your criteria. From there, you can begin budgeting for how much you can afford and find homes that fit within your price range.
2. Find a real estate attorney
Buying a home is an investment, so before you get too far down the road, it’s important to find and hire a good real estate attorney to work with. An experienced real estate attorney will be a resource as soon as you start dealing with the paperwork and legalities of buying a home without a realtor. Plus, they’ll help you navigate documents, resolve disputes, and make informed choices, so you can feel assured that your transaction is airtight.
3. View homes for sale
Once you find a home online, you should see it in person either by attending an open house or scheduling a tour to view the listing. You should also be clear with the listing agent that you’re buying a house without a real estate agent. If the listing agent asks you to sign any forms, have them reviewed by your attorney first.
4. Get pre-approved for a home loan
Before you make your offer, be sure to get pre-approved for a mortgage with a lender. A pre-approval letter specifies the amount you can spend on a house and gives you an estimate on how large of a mortgage loan you can borrow and the interest rate you can expect to pay. It also reassures the seller that you can back up your offer, which is especially important when buying a house without a realtor as it confirms that you’re a serious and qualified buyer.
5. Review the seller disclosure
Before you dive headfirst into making an offer, your next move is to find out everything you can about the home. Ask the seller for the seller’s disclosure, which lists any known issues like water damage, infestations, asbestos, and other information such as easements or repairs. You can also prepare some key questions to ask when buying a house to ensure that you’re leaving no stone unturned.
6. Make and negotiate an offer
Once you find the right home, you’ll want to make an offer. However, you’ll want to do your due diligence and review comps in your area to make sure you’re paying a fair price. You’ll also want an eye on the local housing market to determine if you’re buying in a buyer’s or seller’s market. These pieces of information are key guides when it comes to pricing your offer.
The listing agent may also expect to collect the share of the commission that would typically go to your agent. Make sure your offer spells out 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 ensure that your offer includes all the contingencies that will protect your earnest money if the deal falls through during closing.
7. Deal with inspections and appraisals
After making an offer, you’ll need to deal with two essential tasks – the home inspection and home 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 regarding 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.
8. Close the deal
Closing on the home involves plenty of paperwork, and this is where your attorney really earns that fee. Make sure they’ve reviewed all contracts and forms. Once you’re done, the ink dries, and the seller receives the purchase funds, the home is yours.
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.