Do I Need a REALTOR to Buy a House?

When you're ready to buy a home, you'll need to consider whether or not you want to work with a REALTOR^®. You’re under no legal obligation to hire a real estate agent when making a home purchase.

Buying a house without a REALTOR^® can save you some money — though only in the right circumstances. Before you decide to go it alone, learn more about what to expect when working with a REALTOR^®.

Your REALTOR^® will help you through every step from offer to close. They will ensure meeting all the legal and financial requirements.

Buying a home without an agent is possible. But unless you have a real estate background, a REALTOR^® can save you a lot of time throughout the process.

Risks of Buying a House Without a REALTOR^®

Buying a home without professional assistance poses clear risks. Without the help of a REALTOR^®, you could face such risks as:

• Overpaying for your home because you won’t understand fair market value
• Missing out on the latest listings to explore all your housing options
• Violating legal or regulatory laws when buying a home
• Causing delays or errors because of a limited understanding of complex paperwork
• Losing money on a sale if your contract doesn’t contain the right contingencies

This is to say nothing of the time and energy you’ll have to commit to the homebuying process.

Rather than just focusing on finding the right house, you’ll have to juggle the administrative and legal side of the process. This can be challenging if you lack real estate experience.

How to Work With a REALTOR^®

Working with a REALTOR^® can simplify the homebuying process and help you avoid potential missteps along the way. Should you go this route, here are some things to consider when working with a real estate professional.

Choose a REALTOR^®

Your first step is to find the right REALTOR^® for your situation. You'll want to identify one that’s a licensed member of the National Association of REALTORS^® (NAR). Ideally, you’ll also want a local REALTOR^® who has knowledge of the market in the area.

Don’t be afraid to interview a few potential REALTORS^® to find an agent that aligns with your unique needs or buying strategy. For example, ask potential REALTORS^® about their approach to finding an ideal home and select an agent that prioritizes your needs.

Property Search and Viewing

You can start searching for properties before you have a REALTOR^®. This may help you narrow down your neighborhood preferences. Many REALTORS^® have access to tools such as a multiple listing service that can expand your housing options to comparable homes.

Some selling agents will host “open houses” to give you a closer look at the property. You can attend these events without a REALTOR^®. However, it’s best to have an agent secured to help you later negotiate with the seller’s agent.

Your REALTOR^® may also be able to arrange a scheduled viewing of the property. This will give you a better idea of the property.

Negotiation and Offer

REALTORS^® can be particularly helpful in the process of making an offer. Local REALTORS^® will have a clear understanding of the fair market value of a property. They can help you determine an offer that’s fair to both parties. REALTORS^® can help you create an offer, including the price of the home and any earnest money you might use to secure your purchase.

Your REALTOR^® can also help you in negotiating a final purchase price. This can include contingencies in the offer itself, requiring sellers to make updates or repairs before closing.

Closing Process

Once you accept the offer, your REALTOR^® can guide you through the closing process. This includes scheduling a home inspection and an appraisal to ensure your mortgage approval.

The REALTOR^® helps with paperwork for a proper sale. They’ll also guide you through the closing documents, explaining the fees required.

How to Buy a House Without a REALTOR^®

If you prefer to buy a house without working with a REALTOR^®, it's possible. You'll want to be sure to follow a careful, strategic process. Here’s how to buy a house without working with an agent.

Research and Budget

Before you start looking for an actual home, conduct careful research to learn as much as you can about your local real estate market. What is the fair market value for a home in your area? What is the average cost per square foot? Is it a buyer’s or seller’s market?

Answering these questions can help you set a budget for what you want to spend on your home. This includes determining how much you have to put toward a down payment and your total loan amount. Always remember to leave some money in the bank to cover closing costs or any upgrades you plan to make.

Property Search and Negotiation

Once you set a budget, you’re ready to begin searching for a house that aligns with your needs. You can attend open houses or contact the seller’s listing agent to schedule a tour.

Without a REALTOR^®, you’ll need extra care to ensure the property fits your needs. Ask for a seller’s disclosure, which will give you insight into any issues with the property, such as:

• Structural issues
• Mold or water damage
• Problems with plumbing, heating, or electrical systems
• History of damage from pests
• The presence of lead paint, asbestos, or radon
• Issues with the soil

But be careful! Sellers must disclose only the issues they are legally required to and can choose not to disclose other information. Make sure to ask pointed, direct questions about the above topics. Most states require that sellers give an honest answer when asked direct questions.

If you’re satisfied with the home’s condition, you can make an offer letter. Your offer letter should include:

• The property’s full address
• Your full legal name
• The names of anyone buying the property with you
• The amount of your offer
• Any contingencies, such as a home inspection or repair
• Any items you want included in the sale price, such as appliances
• Seller concessions you’re requesting, such as discount points or cash for closing
• A copy of your mortgage pre-approval letter
• The date you want to close
• The date you expect to move in
• A deadline to accept or decline your offer

Remember, you’ll be sending your letter to the seller’s agent unless the home is “for sale by owner” (FSBO).

Inspections and Financing

Your mortgage lender will require a home appraisal to ensure the sale price matches the mortgage amount. Lenders don’t always require an inspection. However, this can reveal issues that even the seller wasn't aware of. This can include issues with the structure, plumbing, or utilities.

Depending on your state, you may need a real estate attorney to complete the sale and transfer your title. If you’re not using a REALTOR^®, an attorney can help you deal with the paperwork and ensure you comply with all regulatory issues.

Closing and Ownership Transfer

Once you and the seller agree on a sale price, you can close on the loan. Your lender will send you a Closing Disclosure that outlines your loan terms, interest rates, closing costs, and more.

Your next step will be to contact your lender to schedule your closing. You’ll pay your closing costs at this time and become a homeowner once you sign your paperwork.

Pros and Cons of Buying a House Without a REALTOR^®

Should you buy a home without a REALTOR^®? Here are the advantages and disadvantages of doing so.

Pros

Buying a home on your own can yield benefits such as:

• Saving on costs, especially if the property is FSBO
• Controlling the whole process
• Saving on closing costs and real estate commissions

If you have the experience, you could fulfill all the responsibilities a REALTOR^® would.

Cons

Conversely, buying a home without assistance can yield such drawbacks as:

• Limited access to real estate listings
• Challenges in handling important details
• Inability to effectively negotiate with the seller
• Increased time and energy involved in the process

Additionally, there might not even be that much cost savings. That’s because the seller usually pays the buyer’s agent’s commission fees, which means you won’t have to pay extra during closing for your agent’s commission.

Why a REALTOR^® Helps

REALTORS^® have years of experience in handling home sales. If you have the time and knowledge, buying a home on your own is certainly possible, but you may lack the expertise that an experienced REALTOR^® can bring.

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