How to buy a house without a realtor
Quick insights
- Buying a home without a real estate agent is possible; however, the buyer handles market research, paperwork, and independent negotiation, which can require significant effort.
- Situations like knowing the seller, having real estate experience or aiming to save on commissions may make skipping a realtor more appealing, though potential risks exist.
- Without a real estate agent, you'll need to assemble your own team of professionals (e.g., lawyer, inspector) and prepare for challenges like navigating disclosures, inspections and legal documents.
A great real estate professional plays an important role in buying or selling a home. They can help with navigating the complexities of finding a property, making an offer and preparing to close. But if you do want to handle this work yourself, you can. Keep reading to discover how to handle these tasks yourself without a realtor.
Can you buy a home without a realtor?
Yes, buying a home without a realtor is an option. It is perfectly legal, and you are not required to have a licensed real estate agent in the room.
You might want to do this for a few reasons. You may believe it could streamline the process by cutting out “the middleman” or because you believe it might save you money.
Is there a benefit to not using a realtor?
Handling the buying process yourself gives you a couple of potential advantages regarding negotiations. If you aren’t using a real estate agent as a buyer, you’ll be able to interact directly with either the seller or the seller’s agent. Acting as your own agent can streamline the process and potentially give you more insight and control over how to structure offers and counteroffers.
Risks of buying a home without a realtor
Here are a few circumstances that may cause you to think twice about DIYing your home search.
Limiting your house hunt
With no real estate agent, you won’t have access to housing inventory that’s available only to agents who use the multiple listing service (MLS). Most homes on the MLS are also on public sites like Zillow. But you won’t see the hidden gems on the MLS that realtors can see.
Similarly, real estate agents use a tool called comparative market analysis (CMA) to find comparable properties and determine a reasonable asking price. Without that knowledge, you could overpay for a property or lose out because you offered too little.
Less familiarity with the local market
It could be that you’ve just moved to the area and aren’t sure how properties stack up. Maybe you don’t have much information about how the real estate market in your area works. You may not know how many homes are for sale in a given area and how long they typically stay on the market. Or you may not have critical information about whether those properties are selling for over or under the asking price.
Researching these questions takes time. If that’s an issue, it may be wiser to work with a professional whose life’s work is understanding these details and communicating them to clients in a clear, effective way.
The paperwork falls on you
If dealing with paperwork feels overwhelming, you may want to swing for a real estate agent. Their job is to handle documents and figure out what goes where, and when. They’ll help you understand contracts and clauses, and they’ll help you schedule home appraisals and title searches. Sure, these are all things you can do on your own. But do you really want to?
Less experience to draw from
Even if you’ve purchased more than one home, most real estate agents have probably been through the process more times than you. Each real estate transaction is unique and comes with different compromises and pain points. Navigating the process without an agent may limit your access to valuable experience. And lacking their expertise could make a difference at key points, whether it’s the seller disclosures or price negotiations.
How to buy a home without a real estate agent: Step-by-step
Ready to learn how to buy a house without a realtor? Granted, you'll have some work to do before you begin the homebuying process, like saving for a down payment and making sure your credit score is in good shape.
But once you're ready to go, you can start the actual work of buying a house with these key steps.
1. Get preapproved
It may be a good idea to get preapproved for a mortgage and get a conditional letter of approval from your lender that explains how much you can borrow. You might need this letter when it’s time to make an offer.
2. Explore the market
Research the different neighborhoods you’re interested in. Know their names, boundaries and how much recently sold homes in the area cost. Use online tools to identify properties that might fit your needs and budget.
3. Hire a real estate attorney
Real estate transactions are complicated. Without a realtor to help guide you through contracts, clauses and conditions, you could find yourself in legal hot water. Don’t go it alone, and hire a lawyer. Specifically, find a real estate lawyer who can help with legal issues and review paperwork.
4. Ask questions
Prepare a list of questions that you want to ask a seller or listing agent. Include easy questions like "Are appliances included in the sale of the home?" and "How old is the roof/furnace?" to more complex questions like "Why are you selling?" and "What's the biggest problem you’ve encountered in this neighborhood?"
5. Request disclosures and schedule an inspection
Request a list of disclosures from the seller. At a minimum, sellers must report the possible presence of lead paint. In some locations, they must also disclose asbestos, mold, water or pest damage if they know about it. Sellers also must answer questions truthfully when asked.
Be aware that sellers are only responsible for telling you about issues they know about, and that each state has different rules about what must legally be disclosed. The only nationally required disclosure is about lead-based paint. Sellers who own a home built before 1978 must tell buyers about lead paint used in the house.
Other than that, it’s up to you to research what disclosures are required in your state. It’s always wise to get an inspection, especially if you’re buying a house without a realtor. You can technically forgo an inspection and purchase a home as-is. But that’s not a good idea if you aren’t working with a realtor or someone who’s familiar with common problems in your area.
6. Make an offer
The offer letter should include contingencies, proposed closing date and terms and any requested interested party contributions or concessions. You should also list any items you expect to come with the home, like appliances or outdoor structures.
Because this is considered a legal document, have your lawyer check it before submitting your offer to the seller or listing agent.
7. Apply for your mortgage
If you’re conditionally approved, you may have already submitted a lot of the paperwork for your application. You'll need to finalize the application and provide any additional documentation to ensure you'll have funds by the closing date.
8. Finalize repairs
Negotiate and sign off on any issues discovered during the inspection or lender’s appraisal. You might ask for repairs to be done, a reduction in the asking price of the home or allowances to address any problems.
9. Title
Find a title company. Your lawyer may be able to recommend a good company, or you can ask friends who have recently purchased a home. You’ll also want to get title insurance to cover any potential problems with the title.
10. Do a final walk-through and close
The final walk-through is typically done a day or so before closing so you can check on repairs and make sure the home is ready for you to take ownership.
To close on the property, you’ll need to have your legal ID, a check or proof of wire transfer for the down payment and closing costs. It typically takes around two hours to sign documents.
What to consider when you buy without an agent
When you don't use a real estate agent, you'll need to put in considerable time and research for the things an agent would normally handle. If any of these are sticking points, or you think they sound like a hassle, you may want to consider using an agent instead.
Here are some things that a real estate agent will do for you and you’ll need to figure out on your own:
- Researching the market: You'll need to spend significant time researching comparable homes in your price range, common features in local properties and, of course, what homes are on the market.
- Calling for showings: In hot markets, new listings are snapped up quickly. You'll need to pay close attention to what's new and arrange showings through the listing agent or seller quickly.
- Finding your own professional team: Agents have worked with many professionals and know who is good and who should be avoided. You'll need to find a lawyer, home inspector, title company and possibly other pros like contractors to get everything done.
- Negotiating any problems: From needing repairs uncovered during the inspection to convincing the seller that they should leave their appliances, you’ll likely have several items to discuss. Sometimes these conversations can be contentious. You may need to be willing to compromise in some areas or abandon the deal.
- Completing paperwork: You’ll need to create legal documents. Pay close attention to details in the documents you provide and the ones you receive.
If any of these tasks make you uncomfortable, or you don't think you can do them, it's important to use a real estate agent to help buy your home.
In summary
Whether you use a real estate agent or go out on your own to buy a home, you may need help with getting preapproved and applying for a mortgage. Speak to a Home Lending Advisor for more help.
