TABLE OF CONTENTS

    For many, the home-buying journey is accompanied by a realtor who acts as a guide, offering expertise on market conditions, property evaluations, and negotiations. Realtors have a depth of knowledge and experience and can provide invaluable support when buying a house. However, many buyers may walk this path solo and forgo the conventional route of working with an agent.

    Can you buy a house without a realtor? Buying a house without an intermediary can offer some advantages, like more direct control over the buying process. However, this option is not without disadvantages. To essentially become your own real estate agent, you’ll need to perform research and embrace the complexities of buying property.

    Keep reading to learn how to buy a house without a realtor and determine if this is the right avenue for you.

    KEY TAKEAWAYS

    • You don’t need a realtor to buy a house, but these professionals can help you navigate the complexities of the real estate market to ensure you make the right decision.
    • Buying a house without a realtor can indirectly save you money while giving you control over the entire home-buying process. However, there are risks associated with opting out of working with a realtor, such as overpaying, missed opportunities, and no help negotiating.
    • There are certain situations where buying a house without a realtor makes sense, such as when you have experience, know the seller, or are purchasing a property For Sale By Owner (FSBO).
    • Individuals who should consider working with a realtor include first-time buyers and those who want peace of mind knowing an expert will work to ensure a smooth process.

    Do You Need a Realtor to Buy a House?

    No, you don’t need a realtor to buy a house. The process of purchasing a home can be something you can do independently using online resources and platforms. These tools can help you locate properties, gauge market prices, and improve your understanding of the paperwork involved.

    However, while it’s possible to buy a house without a realtor, there’s a reason many individuals choose to work with one. Realtors have specialized knowledge of the housing market, which can help first-time buyers navigate unfamiliar terrain. A good realtor can provide insights into the history of a property and neighborhood, along with the potential long-term value of a home.

    Realtors also excel in negotiations. They can help buyers strategize on making competitive offers, suggest contingencies to protect the buyer’s interests, and avoid potential pitfalls.

    Therefore, while a realtor isn’t mandatory when purchasing a house, they can be helpful, eliminating many of the stress involved in the process.

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    What Does a Real Estate Agent Do?

    A real estate agent plays a significant role in the home-buying process, especially from a buyer’s perspective. Here’s a general overview of the key responsibilities and the role they assume when helping buyers:

    • Market knowledge: Real estate agents possess in-depth knowledge of the local real estate market, including trends, prices, and neighborhood specifics. They can guide buyers on whether a property is priced right, which neighborhoods might suit their needs best, and how the market might evolve.
    • Property search: Based on the buyer’s criteria, such as budget, preferred locations, and specific needs like number of bedrooms, features, and proximity to amenities, agents shortlist available properties. They also have access to multiple listing services, which might include properties not available to the general public.
    • Scheduling: Once potential homes are identified, the agent arranges visits and tours for the buyer. They can provide insights into the property while highlighting potential red flags.
    • Negotiation: Agents are skilled negotiators. With their market knowledge and experience, they can advise on making a competitive offer and negotiate on the buyer’s behalf to get the best possible deal.
    • Paperwork: Buying a home involves a significant amount of paperwork, from offers to counteroffers, disclosures, and mortgage documents. Agents guide buyers through this paperwork to ensure all the necessary steps are completed correctly.
    • Sale closing: From ensuring the buyer’s interests are protected in the final contract to coordinating with title companies, agents assist in every step leading up to the final sale to ensure a smooth ownership transition.

    Benefits of Buying a House Without a Realtor

    A white realtor in a blue suit welcomes a Hispanic couple into a home and prepares to show them around.

    The largest benefit of working with a realtor is the time savings. Since you don’t have to worry about finding suitable properties or lengthy negotiations, you can leave the heavy lifting to someone else. However, there are advantages to buying a house without a realtor, such as:

    • Cost savings: As the buyer, you don’t pay the real estate agent’s commission. Instead, the seller pays both their agent and yours. This fee is usually deducted from the proceeds of the home sale. However, buying a house without a realtor can indirectly save you money. In situations where the seller isn’t paying for a buyer’s realtor commission, this can play in favor of buyers, especially those using VA loans, as VA guidelines have limits on which closing costs the veteran can pay. The seller won’t have to factor in the buyer’s agent commission, meaning you might be able to negotiate a better deal on the home.
    • Direct communication: Dealing directly with sellers or their representatives can facilitate more transparent and immediate communication, potentially leading to quicker decision-making. This direct interaction can build trust and understanding between the buyer and seller, fostering a smoother transaction process. It also eliminates the potential for information to get lost or misinterpreted as it gets passed through multiple parties, ensuring that both sides are always on the same page.
    • Personal control: When you buy a house without a realtor, you have complete control over your property search, viewing schedule, and negotiations, allowing you to move at your own pace. This autonomy allows you to make decisions based on your personal preferences and intuition without external influences. It also ensures that your home-buying journey aligns with your unique needs and timeline, offering a more tailored experience.

    While these advantages may present a compelling case for independent home-buying, it’s crucial to understand the potential challenges ahead. Buying a home requires significant time, research, and due diligence to ensure a smooth and beneficial transaction.

    Risks of Buying a House Without a Realtor

    While buying a house without a realtor can offer you more freedom, these advantages come at a potential cost. For many, a realtor is a safety net that can help them avoid pitfalls and difficulties. Without this professional guidance, here are some of the risks of buying a house without a realtor:

    • Overpaying: Without an expert’s market analysis, buyers might end up paying more than the property is actually worth, missing out on comparable sales data that could inform their offer.
    • Missed listings: Realtors often have access to listings before they hit the public market. Without these connections, buyers may miss out on ideal properties.
    • Paperwork errors: Real estate transactions involve complicated paperwork. Buyers might overlook essential details without proper guidance, leading to legal issues.
    • No negotiation help: Skilled negotiation is crucial when purchasing a property. Buyers may miss out on better terms, price reductions, or essential contingencies if they don’t understand real estate negotiation tactics.
    • Overlooking property issues: realtors know how to spot red flags during property viewings, from structural issues to neighborhood concerns. Without this expertise, buyers may overlook key issues that can affect their happiness in the home.
    • Lack of network: Realtors have an established network of professionals, from inspectors to lawyers and contractors. Buyers might struggle to find reputable services without these connections, potentially leading to subpar work or extended timelines.
    • Limited market knowledge: Local realtors have in-depth knowledge about various neighborhoods, future development plans, and the overall real estate climate. Buyers may miss out on essential insights about the areas they’re considering, affecting their long-term satisfaction with a purchase.
    • Mishandling of escrow and closing: Without a realtor’s guidance, handling escrow and understanding the closing process can be daunting, potentially leading to costly errors and delays.

    How to Buy a House Without a Realtor

    A realtor isn’t necessary for every real estate transaction. With the right tools, knowledge, and preparation, individuals can buy a home without a real estate agent. Here are a few steps to help you if you opt out of working with one:

    Establish a budget

    Before you begin house hunting, you should know exactly what you can afford by establishing a budget. You can begin by assessing your personal finances and reviewing savings, income, debts, and monthly expenses. Consider future financial changes like changing jobs or expanding your family.

    Keep in mind that the sales price of a home isn’t the only cost involved. Factor in expenses like closing costs, property taxes, insurance, HOA fees, and maintenance expenses. You should also try to set aside an emergency fund to act as a safety net for unexpected costs or changes in your financial situation.

    Get pre-approved for a mortgage

    Find a mortgage lender and get pre-approved to ensure you set an accurate budget. Mortgage pre-approval provides financial clarity to help you determine what lenders are willing to offer you based on various factors like your income, debts, and credit history. For those who might not fit the traditional lending mold, consider alternative financing options such as a non-QM loan, which offers more flexible qualification criteria.

    A pre-approval can also give you a competitive edge when house hunting. Sellers tend to favor pre-approved buyers because it indicates a serious intent to buy and financial stability.

    In addition, mortgage pre-approval can help you save money. Some lenders might offer you the option to lock in your interest rate upon pre-approval to shield you from potential future rate increases.

    Understanding your pre-approval letter is crucial. Ensure you’re aware of its duration — typically 60 to 90 days. The duration can vary depending on the lender and changes your financial situation. After this period, interest rates may have changed, or your financial circumstances may need to be re-evaluated, which would require you to get a new pre-approval if you haven’t found a property to purchase within the initial time frame.

    Start house hunting

    Without a realtor’s guidance, the house-hunting process demands more time from you. You can use online platforms like Zillow, Redfin, and Realtor.com to find comprehensive property listings in your desired areas.

    Once you find suitable properties, you can visit open houses to personally assess the homes and neighborhoods and potentially meet sellers and their representatives. Networking during these visits can provide valuable insights, especially if you meet long-term residents who can share information about community dynamics and future development plans.

    This is one of the most time-consuming components of purchasing a home. You should understand the trends, pricing, and characteristics of an area to make an informed decision.

    Consider hiring a lawyer

    Do you need a realtor to buy a house? No, but you might need a lawyer. Realtors often handle many transactional elements, so most buyers don’t need to hire legal representation. However, without a realtor to protect you, it’s a good idea to hire a lawyer to ensure all the paperwork, especially the purchase agreement, is legally sound and protects your interests.

    Lawyers can also help ensure the property has a clear title without any liens while handling closing procedures to prevent legal snags and ensure a smooth property transfer.

    Keep in mind that, again, buyers don’t usually pay a realtor’s commission fees. Instead, the seller typically covers the commission for both their own realtor and the buyer’s realtor, making yours essentially free to you. However, if you hire a lawyer, you’ll be paying another party to handle some of the realtor’s responsibilities.

    Request seller disclosures

    Seller disclosures are documents the seller provides detailing known issues, defects, or malfunctions a property might have. These disclosures aim to inform buyers about potential problems or concerns that the seller is aware of to ensure transparency.

    These disclosures can illuminate significant problems, like mold, pest infestations, or foundational damage. Knowing these things before investing in a property is essential because it will allow you to assess the true value and potential future costs associated with the home. By being informed of these issues upfront, buyers can negotiate repairs or adjust their offer price accordingly. Additionally, understanding these issues now can prevent unexpected expenses or challenges after the purchase.

    Make an offer and negotiate with the seller

    You’ll decide on a starting bid based on your research, property values in the area, and any disclosed issues. While you can communicate your offer verbally, it’s essential to have everything in writing. If your financial situation allows, you might consider opting to make a cash offer. This can give you a competitive edge, as many sellers appreciate the simplicity and certainty of cash transactions. However, you should still be clear about terms, conditions, and any contingencies.

    A couple reaches over a table to shake hands with another person.

    Next, the seller can accept, reject, or counter your offer. If they counter, they’re initiating a negotiation process where both parties work toward a mutually agreeable price and terms. During this phase, open communication and flexibility are important to ensure the buyer and seller feel satisfied with the final agreement.

    Order an appraisal and inspection

    Once the offer is accepted, you must do your due diligence. Before sealing the deal, you should confirm the value and condition of the property. If you’re getting a mortgage, your lender will require an appraisal to ensure the property’s price aligns with its market value. An appraiser will evaluate the home and compare it to similar properties in the area that have recently sold to determine its worth.

    Additionally, it’s essential to order a home inspection. Home inspections typically aren’t required by lenders, but they can be beneficial for buyers. A home inspector will assess the property from top to bottom, checking for potential issues or repairs, whether structural, electrical, plumbing or otherwise.

    This step can help identify any unseen problems that might lead to significant expenses in the future. Based on inspection and/or appraisal results, you can negotiate with the seller to address repairs or adjust the price accordingly.

    Take the final steps and close on the home

    If all contingencies are satisfied, your lender can finalize your mortgage approval and ensure that you can borrow the necessary funds. Once your mortgage application is accepted, both parties can coordinate a closing date. You’ll need to secure homeowners insurance, and both sides will finalize paperwork with their attorneys or escrow companies.

    Just before closing, you should tour the property to ensure it’s in the agreed-upon condition and that there are no new issues. You’ll also need to prepare the necessary documents, which might include the deed, settlement statement, and other relevant paperwork.

    On closing day, you’ll sign paperwork, finalize your mortgage, and make the necessary payments, including the down payment and closing costs. Then, once everything is finalized, you can move into your new home. The exact timing might vary based on what was agreed upon in the contract.

    When to Consider Buying a House Without a Realtor

    There are some situations when it’s better to work with a realtor. For instance, first-time home buyers or those without a lot of time or willingness to learn about the housing market will prefer working with an expert who can guide the entire process.

    However, there are also some situations when working with a realtor isn’t necessary. Here’s when buying a house without a realtor might make sense:

    • You know the seller: If you’re familiar with the seller, you may not need a realtor because you already have access to them for open and transparent negotiations. Previous relationships can reduce concerns about potential hidden issues in the property’s disclosure, making it less necessary for the buyer to hire a realtor.
    • You have experience: If you’re a realtor yourself or have experience in the real estate industry, you likely already have the skills necessary to navigate the process.
    • You’ve already purchased homes: Having purchased homes before, you might be well-versed in the steps, paperwork, and potential pitfalls. Previous buying experiences can provide confidence in negotiating terms and prices with sellers.
    • The house is For Sale By Owner (FSBO): FSBO properties often mean the seller is also trying to avoid realtor fees, potentially offering better prices. The negotiation and sale process can be more straightforward without multiple parties involved.
    • New construction homes: New constructions often come with warranties, reducing or even eliminating concerns about potential defects or repairs. Dealing directly with a builder or their representative can provide clear insights into the property’s construction, materials, and features.

    When is it beneficial to buy a house with a realtor?

    Keep in mind that buying a house without a realtor might make it easier in some situations, but it can make it more challenging in others. Here are some situations when you should consider working with a realtor when buying a home:

    • You’re a first-time buyer: Understanding the process can be overwhelming for those buying a home for the first time. A realtor can provide guidance, answer questions, and help buyers avoid costly mistakes.
    • You want more negotiating power: Not everyone is a master negotiator, especially in real estate. Realtors know standard practices in the industry and can often secure better terms, price reductions, or contingencies in the contract.
    • You want to see all available listings: Realtors can access properties before they’re publicly listed, giving you a competitive edge in hot markets.
    • You have special circumstances: If you’re dealing with foreclosures, short sales, moving from out of state, or buying a house with low income, working with a realtor can provide targeted advice and guidance. Realtors have a network of professionals and can connect you with lenders or programs tailored to low-income buyers, or they might know of special listings or discounts in foreclosures and short sales.
    • You want peace of mind: One of the most significant advantages of working with a realtor is peace of mind. Buying a home is a significant investment, and having an experienced professional guide can reduce stress.

    Simplify the Home-Buying Process by Working With a Trusted Lender

    Do you need a realtor to buy a house? While the decision ultimately depends on your personal preferences, knowledge, and comfort level, the answer is no: you don’t necessarily need a realtor to buy a house. However, they can help you save time while reducing the stress and complexity of the home-buying process.

    Whether it’s your first or fifth real estate transaction, purchasing a home is a mixture of anticipation, challenges, and complicated decisions. While the choice of property, the neighborhood, and the inspection are important aspects of purchasing a home, one component can streamline your journey — a trusted lender.

    Griffin Funding is committed to providing personalized service that guides our borrowers through the home-buying process. Whether you’re a first-time home buyer or refinancing an existing loan, we can help you navigate the complex mortgage landscape. Apply for mortgage pre-approval today to get started.

    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.