Buying A House Without A REALTOR®: What You Need To Know
Whether you’re a first-time home buyer or a seasoned homeowner who’s been around the home buying-and-selling block a few times, it’s never a bad idea to work with an experienced real estate agent when you purchase a home.
Their ability to stick to a deadline and their experience in the industry makes choosing a real estate agent one of the best things you can do when you start looking for a new home.
While almost everything is accessible online, and it’s easy to research listings on your computer or phone and schedule tours, there are certain stages of the home buying process when you may need someone in your corner.
Here’s what you need to know about buying a house without a real estate agent or REALTOR®.
Can You Buy A House Without A REALTOR®?
It’s not mandatory to hire a REALTOR® to buy a house, but there are definitely perks to using one. First, a quick lesson in terminology on REALTOR® versus real estate agent.
A REALTOR® is an individual who represents you in the home buying process. While the term is often used colloquially in a way that implies it shares the same meaning as the term “real estate agent,” there is a small difference between the two.
This does not mean that REALTORS® are better or more qualified than regular real estate agents; it just means they’ve joined a broader network of real estate professionals.
REALTORS® and real estate agents will set up home viewings on your behalf, give you information on houses that pique your interest and help you negotiate the best price on the home you would like to purchase. They also provide references for reputable mortgage lenders, home inspectors and other service providers you’ll need to work with during the home buying process.
A good real estate agent will have access to neighborhood data, including comparable sales, local history and neighborhood demographics. They should also understand the current market and set realistic expectations for your home buying timeline and price point.
While buying a house without a REALTOR® or real estate agent is possible, there are important steps to follow if you’re going to navigate the home buying journey on your own.
How To Buy A House Without A REALTOR®
If you choose to buy a home without a real estate agent or REALTOR®, you should research and prepare as much as possible.
Here are nine important steps to take during the home buying process:
Step 1: Prepare Your Mortgage Documents
There are several documents you’ll need to apply for a mortgage. And the sooner you collect them, the easier the application process will be. Once you’ve gathered all your paperwork, start your mortgage preapproval. A preapproval can help streamline the home buying process and may even make your offers stand out to sellers.
You can make an offer on a home without a preapproval, but it may be rejected or slow the process down, increasing your chances of not getting the home of your dreams.
Step 2: Do Your Research
Get familiar with the neighborhood you’re considering and its market. You should make an effort to learn about local crime rates, school statistics, property development and anything that would encourage or discourage you from buying a home there.
As you research market conditions, you may find that current listings aren’t always indicative of actual value. However, it will be easier to navigate the housing market in the area where you want to buy a property if you know the prices of comparable homes. And it can help shield you from any unpleasant surprises with home prices. To help you navigate the competition, review how long homes have sat on the market and whether homes sold above or below their asking price.
Step 3: Ask For The Seller’s Disclosure
When you find a home you like, request a Seller's Disclosure and prepare questions. Many states require sellers to provide documentation disclosing any issues with a property. If you don’t know what to ask, they may not share all the information you need about structural issues, plumbing, heating or electrical system problems, the presence of lead paint, radon or asbestos and more.
Don’t hesitate to ask questions. Feel free to ask the seller why they’re selling, how much they paid for the home or if there were previous issues with the property they had to address during their time in the home.
Step 4: Hire A Real Estate Attorney
A real estate attorney can review your contract and provide legal advice. Some states require a real estate attorney to finalize a home sale and transfer the title. But even if it’s not required, an experienced lawyer can protect your interests.
Step 5: Make An Offer
Once you’ve found your perfect home, it’s time to make an offer. Your offer letter should include: the home’s address, the offer amount, the names of everyone buying the house, contingencies, the earnest money amount, any seller concessions, items you want included in the sale (like appliances and window treatments), your mortgage preapproval letter, your desired closing date and more.
Step 6: Hire An Inspector
A home inspection will help you understand the home’s condition. Ask friends and family for home inspector recommendations.
Step 7: Purchase A Title Insurance Policy
Be sure to purchase a title insurance policy. You must buy one that protects your lender in case of title issues. And there’s a separate owner’s title policy, which will give you the money to buy a new house if someone makes a successful claim to the property after you close.
You can ask the seller to purchase the title insurance policy as part of your purchase agreement.
Step 8: Negotiate
Be ready to negotiate. There’s a lot more at stake when negotiating the purchase price of your soon-to-be home. Unless the home is for sale by owner (FSBO), expect to negotiate the price and terms with the seller’s agent. Otherwise, you’ll submit your purchase offer directly to the owner.
You’ll want to get familiar with the best negotiation tactics and what’s appropriate when negotiating the purchase of your new home. Be sure to establish who will pay which closing costs. You don’t want to get stuck with extra expenses without agreeing to pay them first.
Step 9: Finalize Home Financing And Closing Documents
When you reach an agreement with the seller, it’s time to close on your home loan. Once the appraisal and underwriting process is complete, your mortgage lender will send you a Closing Disclosure that outlines the terms and conditions of your loan, monthly mortgage payment, closing costs, loan interest rate and other important details.
Your attorney can help you review the closing package and guide you though the final closing process.
Working With Buyer’s Agents Vs. Seller’s Agents
Generally, the buyer and seller are represented by different agents.
The seller’s agent can represent you, but they may not have your best interest in mind. A seller’s agent, also referred to as a listing agent, has a fiduciary duty (legally mandated obligation) to the seller.
Sometimes a seller’s agent can declare dual agency, meaning they claim to represent both the seller and buyer in a home transaction. However, at the end of the day, their primary duty is to the seller.
This is just one of the many reasons to hire a real estate agent to represent your interests in the transaction. Actually, in some states, dual agency is illegal.
On the other hand, a buyer’s agent only has a fiduciary duty to you, the home buyer. This means they have a responsibility to act in your best interest. They ensure your private information stays confidential and account for all the documents and funds in the home buying process.
Pros Of Working With A REALTOR®
Even if you’re tempted to work alone when buying a home, there are some benefits of working with a real estate agent that you should consider.
- They’re experts in the industry. Most real estate agents have a wealth of knowledge and expertise that can help you navigate the home buying process. If you’re a first-time home buyer, your agent can offer helpful tips to make the process as simple as possible.
- They can save you a lot of time and energy. With all your daily responsibilities, it may be challenging to juggle purchasing a home. Having an agent by your side can add a level of convenience while making one of the biggest purchases of your life. An agent can also save you time by screening listings and searching for homes that fit your criteria.
- They can calm your nerves. If you choose to buy a home without a REALTOR®, you will need to handle communications by yourself. Delayed responses from sellers can make it hard to find your dream home and can create more stress throughout the process.
- They can handle the paperwork. Another important component of buying or selling a home is the paperwork. If you miss something, it will delay the process. Thankfully, your agent can help you manage every document and form along the way.
- They can help with negotiations. You might have questions and concerns about a home before you put in an offer. In their role as a party representing your interests in the buying process, a REALTOR® should be able to diplomatically express any of your concerns to sellers. Your agent can also use your concerns to negotiate the best price for you.
If you decide that working with an agent is right for you, our sister company Rocket HomesSM can help match you with a Verified Partner Agent who has expertise in your area and can understand your goals as well as your budget.2,3
Cons Of Working With A REALTOR®
Although there are many positives to working with an agent, there are still a few downsides.
- You may have to pay a commission. Hiring a full-service real estate agent can be pricey. Either the seller or the buyer and seller can expect to pay an average of 6% of the total home’s sale price. The more the seller has to pay in agent commissions, the less willing they may be to accept a lower offer.
- You may be one of many clients. Real estate agents make money when they sell houses. That’s why they tend to have multiple clients at any given time. You may not get the individualized attention you want or
- You may find yourself working within their time constraints. You likely have your own goals and time frame for purchasing a home that may not sync with your real estate agent’s time frame. You may have to spend extra time communicating with your agent to ensure they’re doing what they can to help you meet your goals and deadlines.
- Agents are not the only professionals you’ll need to hire. Real estate agents can help you find a house and negotiate a fair price, but they can’t do everything. It’s also important to note that some states require a real estate attorney to review the final agreements.
- Every agent is different. Real estate agents have unique skills and personalities. Finding an agent you work well with may not be as easy as you think. It can take time to interview agents in your area before you find one you like.
Real estate agents and REALTORS® can add a lot of value to the home buying process if you select the right one to match your needs. Making a poor choice could cost you time and money. It’s also worth noting that you can negotiate the length of an exclusive agreement with an agent. If the partnership isn’t working out and you still don’t want to navigate home buying alone, you can let the clock run out and then work with another agent.
Buying A House Without A REALTOR® FAQs
Let’s answer some of the most frequently asked questions about buying a house without a REALTOR®.
Does buying a house without a REALTOR® save you money?
Home buyers typically don’t pay a REALTOR® or real estate agent out of pocket. The seller typically pays the buyer’s agent’s commission from the proceeds of the home sale. You may be able to negotiate a lower price on the house if the seller doesn’t have to pay an agent's commission. So buying a house with a REALTOR® could save you money.
When should I consider buying a house without a REALTOR® or real estate agent?
The home buying process can be complex, but you may want to consider buying without an agent or REALTOR® if you know the seller or have previously taken out a home loan and know what to expect and how to prepare for closing. Just make sure you and the seller are clear on the price, closing date and contingencies and you have it all in writing.
How hard is it to buy a house without a REALTOR®?
How difficult it will be to buy a home without a REALTOR® will depend on your previous experience and schedule. If you don’t have the time to attend open houses, search for comparable house sales, lack confidence in your negotiating skills or don’t understand the legal requirements, buying on your own might be more involved than you can handle. A good real estate agent makes their job look easy. Hiring a professional can help save you time and energy.
Will sellers take me seriously if I don’t use a REALTOR®?
Every seller is different. Some sellers may prefer to work with an agent, while others may be happy to work with the buyer directly. When buying a home without a REALTOR® or real estate agent, it’s important that the seller feels like you know what you’re doing. Being prepared may increase a seller’s reception of your offer.
The Bottom Line: Buying A House Without A REALTOR® Is A Personal Choice
Buying a house without a REALTOR® or real estate agent is doable – but it’s far from easy – especially if you’re inexperienced. If you want to get the best deal on a home, partnering with an experienced real estate agent may be your best option.
While starting your home buying journey with a real estate agent may be ideal, you can start out on your own and work with an agent later in the process. Just make sure to meet with several agents and choose the one who best understands your needs and goals.
Ready to begin your home buying journey? Apply online and start your search right away. You can also give us a call at (833) 230-4553.
1 Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, assets and debt. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Rocket Mortgage’s control, including, but not limited to satisfactory insurance, appraisal and title report/search, or if you no longer want to proceed with the loan, your participation in the program will be discontinued. If your eligibility in the program does not change and your mortgage loan does not close due to a Rocket Mortgage error, you will receive the $1,000. This offer does not apply to new purchase loans submitted to Rocket Mortgage through a mortgage broker. This offer is not valid for self-employed clients. Rocket Mortgage reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Rocket Mortgage. Additional conditions or exclusions may apply.
2 Rocket Mortgage, LLC and Rocket Homes Real Estate LLC are separate operating subsidiaries of Rocket Companies, Inc. (NYSE: RKT). Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation and applicable legal and regulatory requirements.
3 Rocket Homes® is a registered trademark licensed to Rocket Homes Real Estate LLC. The Rocket HomesSM Logo is a service mark licensed to Rocket Homes Real Estate LLC. Rocket Homes Real Estate LLC fully supports the principles of the Fair Housing Act. For Rocket Homes Real Estate LLC license numbers, visit RocketHomes.com/license-numbers. California DRE #01804478. Hawaii License # RB-23371. TREC: Information about brokerage services, Consumer protection notice.