Explore your mortgage options
For many first-time home buyers, the home buying process can feel like a journey into uncharted waters. That’s why many buyers recruit a real estate agent to help them navigate the home buying journey.
But you’ll find intrepid buyers who don’t need or want a real estate agent to help them buy a home. It can be done, but you’ll want to make sure you’re prepared for a solo adventure.
If you’re thinking about buying a house without a real estate agent or REALTOR®, we can show you how to do it successfully.
Pros and Cons of Buying a House Without a REALTOR® or Real Estate Agent
Many buyers who decide to strike out on their own do it to save money on a key cost: the purchase price of the home.
The seller typically pays the buyer’s real estate agent’s commission. When you buy a home without a real estate agent, you might be able to get the seller to drop the home’s sale price by the amount they would have spent on commission.
Real estate commissions differ by area, but they’re typically somewhere around 3 – 6% of the home’s sale price. If the seller agrees to reduce the sales price by 3%, it would make a noticeable cost difference.
Let’s have a closer look at the pros and cons of going it alone on the home buying journey.
PROS of Buying a House Without a Real Estate Agent👍
The biggest potential perk of buying a house without a real estate agent is negotiating to get the seller to drop the sales price by the amount they would’ve paid in agent fees, potentially saving you thousands of dollars.
You get to decide everything – from when you want to look at houses to how you negotiate. The only schedule you have to work around is yours and the seller’s agent’s.
CONS of Buying a House Without a Real Estate Agent👎
For buyers who aren’t real estate agents or know one, a lack of experience could cost you money. You may miss out on mortgage assistance or opportunities or working with reliable real estate professionals because you aren’t well-versed in the industry.
Without an agent taking care of things, you’ll need to find the houses, contact the agents and negotiate. All of these phases may take longer than they would if you hired an agent.
Real estate negotiation is an art – an art an agent has likely engaged in more than you have. Without an agent, you can’t benefit from their expertise, experience and insight.
Steps to Buying a House Without a REALTOR® or Real Estate Agent
Buying a house without a REALTOR® or real estate agent involves all the same steps – only you’re doing all the work the agent would do.
1. Apply for a mortgage preapproval
Some sellers might question a buyer’s commitment to buy if they aren’t working with a real estate agent. Getting a preapproval may help ease their concerns.
A preapproval letter states how much a mortgage lender is willing to let you borrow to buy a house. You can use the lender’s estimate to prove your commitment to buying and help you focus your home search in the appropriate price range.
When you’re not working with an agent, a preapproval carries extra weight. It shows the seller that – agent or not – you’re a serious buyer.
2. Get to know the neighborhoods
Falling in like (or love) with a neighborhood or street you want to live on is the easy part. Especially if you have an agent looking for you.
But if you’re working without an agent, you’ll have to do all the digging to make sure an area fits your needs, lifestyle and budget. Look into these factors when you’re considering a neighborhood:
- The area’s job market
- School options, ratings and commute
- Upcoming commercial developments in the area
- Hospital and urgent care options
- Public transportation options and accessibility
- Any slated road improvements or major highway construction projects nearby
3. Find the house you want
Thanks to your preapproval, you know how much house you can afford. Once you have a pretty good idea of where you want to live, it’s time to start scanning those online listings.
To avoid sinking in a sea of results, you’ll need to filter for more than price and locations. Think like an agent. When your search is targeted, you can work faster and jump on good opportunities before other equally motivated buyers do.
Create a list of must-haves, but be flexible. In a competitive housing market, a buyer’s real estate agent will keep their clients’ expectations and demands in check. Without a real estate agent, you’ll need to do the same for yourself.
Here are some other ways to take control of your search like a real estate agent:
- Take advantage of virtual tours.
- Get contact info for a seller’s agent off a house’s listing page and reach out to them.
- Attend open houses before you reach out to the agent to help save you time.
- Look CLOSELY at everything during a home tour. Note the condition of the house, appliances, yard and outbuildings (like a shed or garage).
4. Research recent sale prices of comparable homes
Once you’ve found your dream home, do yourself a big favor and do real estate comps to find out how much similar homes in the area sold for.
Recently sold homes (often referred to as “comps”) can help you decide what price you want to offer on the house you want. Make sure you’re only researching the sale prices of houses that were recently sold – not homes that are currently for sale.
Here are some things that need to be the same (or nearly the same) for a comp to be a good comparable:
- Square footage
- Number of bedrooms and bathrooms
- Lot size
- Age of the house
- Garage (size, age, if it’s connected to the house or not)
- Approximate era and quality of any cosmetic updates
Researching comps is one of the most helpful services a real estate agent provides. They have free access to the most accurate and up-to-date info and are experienced at using comps.
But a buyer without an agent can handle this part. Remember, you’re not a professional appraiser and may not be able to make a formal estimate of a home’s value, but it’s better to have an idea of what a home is worth to help you make a realistic purchase offer.
5. Ask for the Seller’s Disclosure
The first thing you should do when you find a home you’re ready to make an offer on is ask about the Seller’s Disclosure.
In most states, the home seller has to disclose what they know about the condition of the house in the Seller’s Disclosure. You can get a copy of the disclosure from the seller’s listing agent.
In some states, aka caveat emptor states, sellers aren’t required to disclose defects in their homes. To help protect yourself, try to ask the seller questions about the home that could give you more insight into the home’s condition.
Here’s the kind of info you might find in a Seller’s Disclosure:
- The age of the roof
- Age or dysfunction of “mechanicals” (like a furnace or an air conditioning unit)
- Problems with any of the plumbing
- Current issues with mold or water damage
- Structural problems (like cracks in the foundation, crumbling chimney, etc.)
- The presence of older construction materials, like asbestos, can cause health issues
- Lead paint on the property (an important consideration for some loans)
Knowing this info upfront can keep you from investing too much time on a house that would require costly repairs. But if you love the house, you can use what’s in the Seller’s Disclosure to strengthen your negotiation position.
6. Make an offer
Before you decide how much to offer on a house, review the notes you made on the home and your market research, including:
- The prices of comparable homes recently sold in the area
- Estimated costs of repairs for items on Seller’s Disclosure
- Estimate how hot the seller’s market is
- Your mortgage preapproval amount (Pro tip: make an offer that’s less than your max preapproval amount so you have extra cash in case you need to make a counteroffer.)
Your purchase offer also specifies who’s paying closing costs – you, the seller, or the both of you – as well as any conditions (aka “contingencies”) that need to happen for the sale to go through. A contingency can be anything from selling a current house to pay for the new one or giving yourself an out if the appraisal comes back low.
If you aren’t working with a REALTOR® or real estate agent, you can find purchase offer templates online. Once you fill the purchase offer out, send it to the seller’s listing agent. Send it to the owner if you’re making an offer on a home for sale by the owner (FSBO).
There’ll be some negotiating at this point with the seller’s agent or the owner of the FSBO house on things like the sale price and any contingencies.
7. Hire a real estate attorney
In this phase of the home buying process, you should start thinking about hiring skilled professionals to read over your purchase offer and make sure its terms and contingencies are properly documented.
This could help prevent complications or legal repercussions stemming from any mistakes or ambiguities in the offer. That means it may be time to hire a real estate attorney.
In 21 states and Washington, D.C., attorneys are required to complete the sale of a home and transfer the home title from the seller to the buyer.
The purchase offer should also specify who will pay for title insurance: you or the seller. Title insurance protects you in case there’s a problem with the house title that wasn’t discovered in the initial title search.
You certainly don’t want someone to knock on your front door one day and tell you that they were the rightful owner of the house – not the person who sold it to you.
8. Get a home inspection
You’ll need to schedule a home inspection to find out if there are any problems with the house. The sooner you can schedule it – the better.
If the home inspector spots additional problems they aren’t qualified to assess, you may need to hire additional experts like a pest inspector to come and investigate.
Usually, a real estate agent will provide recommendations for these professionals. If you don’t already have those connections, you’ll need to ask around, spending a lot of time looking up pros, comparing reviews and researching prices.
It’s a good idea to attend the inspection. The inspector can explain any issues while you’re there and answer any questions you might have.
9. Negotiate the final price and terms of the sale
You can begin the negotiations and amend the purchase agreement after the home has been inspected and a big or expensive repair is discovered.
Don’t be afraid to request another contingency that makes the sale dependent on the seller addressing an issue with the house in one of the following ways:
- Getting the damaged part of the house fixed before closing day
- Giving you a cash seller’s credit at closing to pay for the repair (making you responsible for the repair once you become the owner)
- Lowering the home’s sale price to cover the estimated cost of the repair
These strategies may be risky in a competitive market. Anything you request is likely going to make your offer incrementally less attractive to the seller. Choose your battles wisely. During this phase of the sale, the seller has the right to refuse additional requests.
The deal could be called off if you or the seller don’t budge. That’s why it’s good to have an inspection contingency in case you need to back out.
Once you and the seller reach an agreement on the final price and seller concessions, you and the seller will re-sign the purchase agreement.
And congratulations! The bulk of the work a real estate agent would’ve done for you is now complete.
Next up, submit the agreement to your lender and apply for a mortgage loan.
10. Close on the home
Once the underwriter reviews and approves your mortgage application, you’ll be clear to close. The lender will send you a Closing Disclosure to review.
The Closing Disclosure outlines your loan terms, and closing costs and includes other important details about your loan like your interest rate.
Be sure to read the entire document and prepare to close. You may have the option to attend your closing in person or virtually. You’ll review the closing documents, pay your closing costs and sign.
And just like that, you’ve got a loan for your new home. Time to move in!
Should You Buy a House Without a Real Estate Agent?
Purchasing real estate can be a wild and crazy ride. The buying process can be complex and full of surprises. Sometimes you need to make quick decisions that may have long-lasting implications for you as a buyer, and eventually, as a homeowner.
Given these challenges, most buyers use an agent. But many don’t and still end up in a home they’re happy with.
Only you can decide if having an experienced real estate agent at your side while navigating the home buying process is necessary. If you believe in your ability to go agentless during the home buying process, we believe you can, too!
Take the first step toward buying a home.
Get approved. See what you qualify for. Start house hunting.