How To Buy a House Without a Realtor
JA
Summary:
Although Realtors can make your life easier, you’re not required to work with one when buying a house. However, if you’d like to take on the housing market solo and eliminate the middleman, you’ll want to arm yourself with information. This includes locating properties for sale, researching the neighborhood, asking for property disclosures, hiring a real estate attorney, and learning how to negotiate prices with sellers.
Are you in the market for a new home but don’t want help from a Realtor? It may seem intimidating since you’ll need to do most of the legwork yourself. However, with prior planning and research, it’s possible to navigate the real estate world alone.
In this article, we’ll provide a step-by-step guide on how to buy a house without relying on a Realtor — from researching potential homes to making an offer and finally closing the deal.
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What does a Realtor do?
A Realtor is a trademarked term referring to a real estate agent who’s a member of the National Association of Realtors (NAR). When real estate agents become NAR Realtor members, they abide by a strict code of ethics and standards of practice.
Realtors play a key role in the home-buying and selling process. With their skills and knowledge, they help clients make informed decisions about properties that best meet their needs.
Realtors are responsible for negotiating contracts, managing documents, coordinating inspections, referring clients to related services, and helping buyers through all stages of the home-buying process. Ultimately, Realtors advocate for sellers and buyers to ensure that everyone is satisfied with the outcome.
IMPORTANT! All Realtors are real estate agents, but not all real estate agents are Realtors. However, since all perform the same tasks during the home-buying and selling process, we’ll use the terms “Realtor” and “real estate agent” interchangeably in this article.
How to buy a house without a Realtor
If you’ve decided to purchase a home without a Realtor, follow the steps below to ensure everything goes smoothly.
1. Get pre-approved for a mortgage
Before you start house hunting, get pre-approved for a mortgage loan. Once pre-approved, you’ll know what price range of homes you can afford, which will save time and help you narrow down your options when shopping for your dream abode.
Be sure to get pre-approved by multiple lenders (most experts recommend a minimum of three) so that you can compare rates and snag the best deal possible on your mortgage loan. You can do all of this from one location using our comparison tool below.
2. Research the neighborhood
When looking at potential properties, it’s crucial to thoroughly research the neighborhood. Get information about crime rates, average rental values, public transportation access, school ratings, and any other amenities in the neighborhood that may be important to you.
3. Find a property
Once you have narrowed down your list of potential properties based on location and your budget, visit the home online or in person. Online listings typically include either the owner’s or the listing agent’s phone number and a list of upcoming open houses.
4. Ask for disclosures
When touring the home, find out as much as possible about the property. Ask the seller or listing agent for disclosures such as the year built, recent improvements or repairs made, energy efficiency details, and pest infestations that could affect how much you want to offer.
Chase Michels, a real estate consultant, says: “It’s important to consider whether the property is located in a flood zone or historically had water damage. This is a huge issue that buyers sometimes forget to look into without an agent.”
Most states require sellers to provide buyers with a property disclosure — a legal document including undisclosed details about the property’s condition that potential homebuyers may find unfavorable. The disclosure requirements vary by state, so consider reviewing the disclosure with a real estate attorney to ensure that there aren’t any red flags.
5. Make an offer
If you’re happy with the property, it’s time to make an offer. Before doing so, find information about comparable properties in the area. Knowing what similar homes have sold for will help you determine a fair price.
When making your offer, consider factors such as closing costs, contingencies, and other fees related to the house purchase.
Related reading: Closing costs can really add up, so make sure you know how much you’re paying. And, while it may seem like a great deal, having the seller pay closing costs may not be the deal you think it is.
6. Hire a lawyer and home inspector
A lawyer specializing in real estate law can be invaluable during the buying process. They can review all paperwork associated with the purchase, including the contract and title, to ensure that your rights as a buyer are protected. Or, alternatively, they may have a good recommendation for a title company to review your paperwork.
Additionally, hiring an experienced home inspector can save you from costly repairs by identifying any property issues before you close on it. Your real estate attorney can also explain a home inspection report to you if you’re unfamiliar with it.
7. Negotiate
If the inspection reveals issues with the property, you can negotiate with the seller or seller’s agent by:
- Asking them to fix the problem before closing
- Asking for reimbursement for the cost of repairs
- Asking for a reduction of the home’s sales price
- Canceling the sale if you can’t reach a solution with the seller
8. Get ready to close
Once you reach an agreement with the seller, it’s time to close on the loan. When underwriting and appraisal clear, you’ll receive a Closing Disclosure from your lender, which details all the terms of the loan. If everything looks good, contact your lender to schedule the closing.
On the closing date, you’ll sign a few final documents and pay the closing costs. Then, the ownership of the property is transferred to you, and you’re officially a homeowner.
Pro Tip
Be sure to request a formal walk-through of the home 24 hours before the closing date. During the walk-through, check that all required repairs have been made and the property is in the agreed-upon condition.
The benefits of working with a Realtor
Buying a home can be overwhelming and sometimes complicated, but it doesn’t have to be. Working with a real estate agent can make the experience much easier and more manageable. Here are a few things Realtors can help you with during the home-buying process:
- Educate you on the real estate market
- Find a home that fits your budget and needs
- Assist you with loan prequalification
- Negotiate prices and terms of the sale agreement
- Ensure that paperwork is in order during the transaction process
- Manage closing details to ensure compliance with all applicable laws and regulations
- Assist with inspections, appraisals, title searches, and surveys as needed
- Recommend service providers who can assist in the buying process (e.g., attorneys, home inspectors)
Reasons you may not need a Realtor
As a homebuyer, here are some situations where it could make sense not to work with a Realtor.
- You’re a real estate agent yourself. Being a real estate agent yourself, you already know the ins and outs of the market, understand how to make a successful home purchase, and are familiar with the paperwork required. You also have access to resources such as databases of properties similar to the property you want, so you know what price point is realistic.
- You know the seller. If you have a relationship with the property seller, you can negotiate the purchase price directly instead of going through a real estate agent.
- You understand the market. If you’ve gone through several real estate transactions, understand the market, and have connections with local pros like title companies, hiring a real estate agent may not be necessary.
- Your family member or friend is a real estate agent. Another reason why you may not need to hire a real estate agent is if your close friend or family member is one. In this case, they may be willing to offer advice without requiring compensation.
Should you buy a house without a Realtor?
Ultimately, the decision is up to you. However, Chase Michels recommends that before taking on the housing market solo, ask yourself: “Do I understand escrow money, inspection terms, and financing contingencies?”
If not, he says you shouldn’t try to represent yourself as “it could cost you your earnest money or end up being more expensive down the line, than if you would have hired your own agent to begin with.”
FAQs
Who pays closing costs?
In real estate transactions, both the buyer and the seller pay closing costs. The buyer’s average closing costs range between 2% and 6% of the loan amount. That means, on a $250,000 home loan, you’d pay anywhere from $5,000 to $15,000.
Closing costs for sellers are typically around 8% to 10% of the home’s sale price. This amount covers both the listing and the real estate agent’s commission and other fees such as transfer tax and title insurance.
Can you save money by not working with a Realtor?
Since the seller is responsible for paying for the buyer’s agent, you won’t typically save money if you forego the option to work with one.
However, there’s still a way to indirectly save some money. You can try to put in a lower offer and cite that since they won’t have to pay agent fees, they should agree to your lower price. Whether or not the seller goes for the proposal is up in the air, but it never hurts to negotiate.
Can you buy a property without using an agent?
Yes, you can buy a property without using an agent. However, not having professional guidance during your home-buying process could be stressful. An experienced real estate agent can help you identify pitfalls, so you don’t make costly mistakes when buying a home. Plus, they know how to negotiate for you and handle most of the paperwork, making the whole experience much more enjoyable and stress-free.
Buying a property without an agent typically involves more legwork — from contacting a mortgage lender and attorneys on your own to visiting open houses, submitting offers, and negotiating terms. But it’s still doable with proper planning and research.
Can I use a real estate attorney instead of an agent?
When entering into a real estate transaction, it’s essential to ensure that you’re legally protected throughout the process. So, hiring a real estate attorney is a good idea if you don’t plan on working with a real estate agent. In fact, many states require a real estate lawyer to oversee the transaction.
These attorneys can help review contracts to ensure that there are no unfavorable clauses or loopholes and provide support through closing. They typically charge an hourly fee of $150 to $350 — though some may charge upwards of $500. Just keep in mind that a real estate lawyer can’t help you through every stage of buying a home like a real estate agent can.
How do I start the process of buying a house?
To get started on your home-buying process, know your budget and what financing options are available to you. Next, start touring homes online or in person to get an idea of what kind of house you’d like to buy. It’s also a good idea to visit neighborhoods that appeal to you and talk to local real estate agents who can help guide you through the process.
If you decide to buy a house without a Realtor’s help, be sure to read the section above titled “How to buy a house without a Realtor” for more details on how to do so.
Key Takeaways
- Realtors (or real estate agents) help buyers through all stages of the home-buying process, including negotiating prices and managing closing details.
- A Realtor can make the experience of buying a home much more manageable. However, you’re not required to work with one if you don’t want to.
- You may not need a Realtor if you’re a real estate agent, know the seller, understand the market, or have family members and friends in the profession.
- To buy a house without a Realtor, first, get pre-approved for a mortgage loan. Then, research neighborhoods and properties, make an offer, hire a lawyer and inspector, negotiate prices, and ensure that the proper paperwork is in order during closing.
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