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- Working with a real estate agent can save time, money, and potential headaches when buying a home.
- The vast majority of homebuyers work with an agent, but it is possible to buy a home without one.
- However, while buyers who choose to go it alone may save some money, there are serious downsides and risks to consider.
If you’re wondering whether you’re required to hire a Realtor to buy a home, the short answer is no. You can certainly buy a house without one. However, think about your reasoning: Most homebuyers who hesitate to work with a real estate agent don’t want to be saddled with commission fees, but the fact is, buyers typically don’t pay an agent’s commission — sellers do. And a Realtor can be a tremendous help in guiding you through the complicated buying process.
So, do you need a real estate agent to buy a house? You don’t need one, but before deciding to go it alone, consider all the angles.
Buying a home with an agent’s help
All real estate agents are licensed professionals; those who are members of the National Association of Realtors (NAR) may also be called Realtors. Whether they’re a Realtor or not, most sellers have a real estate agent working on their side of the deal (typically called a listing agent because they’re handling the listing), so it’s smart to have someone on your side as a buyer, too. A buyer’s agent will have your back in negotiations and can help you make an appropriately competitive offer on a home.
A buyer’s agent can also help homebuyers in a host of other areas. Here are some of the tasks you’d have to do yourself if you were to buy a home without a Realtor:
- Find a home that matches your budget and needs. Real estate search sites give you a sampling of what’s available, but determining whether asking prices are justified takes research. Your agent will do this for you based on comparable home sales in the area, saving you time and offering the benefit of their professional expertise.
- Dig up facts on a neighborhood, including ones that a seller might not disclose that could be important to you. Your agent can share insight you might not have thought to ask about, too.
- Negotiate an offer, including the price and other clauses and contingencies in the purchase agreement.
- Navigate the home inspection, and negotiate repairs or credits with the seller.
- Decipher paperwork that could be filled with complex jargon and terms you don’t fully understand.
- Request and review seller disclosures. You might not know what to ask for, or what sellers in your state are required to disclose, but agents do.
Buying a home without a pro at your side can be risky, so unless you’ve been through the process of buying a home before and are very confident in your knowledge, it’s often better to go with an agent than not. “There are too many legal loopholes and fancy terms that can get overwhelming and confusing for someone who’s not well-versed in the real estate business,” says Laurie Blank, an agent with Timber Ghost Realty in St. Paul, Minnesota.
This is one of the biggest, most important purchases of your life, and there’s a lot of money at stake. Having a pro working on your behalf gives you the benefit of their knowledge and expertise — without one, you risk making any number of mistakes that could cost you money, time or worse.
Buying a home without an agent
The vast majority of homebuyers do work with an agent — 89 percent in 2023, according to NAR data. But buying a home without one can be a viable option for some, especially if you’re familiar enough with the market that you know your property’s worth. Or if you’re familiar with the seller: If you’re buying from a family member, for example, it might seem silly to hire an outsider to negotiate on your behalf. Not working with a buyer’s agent on “an intra-family transaction is fairly common,” according to Quincy, Massachusetts attorney Pamela Linskey, founder of Linskey Law.
There are a few other reasons why you might choose not to work with a Realtor, such as:
- You’re working with an experienced real estate attorney to walk you through the paperwork and offer legal advice.
- You’ve purchased multiple properties in the past and understand the process very well.
- The seller isn’t willing to pay the commission for a buyer’s agent, and you don’t want to pay it, either.
- You’re hoping to save money.
Does buying without an agent actually save you money?
Most buyers considering not working with an agent are looking to save money. This goal can be misguided, though, given the way Realtor commissions are typically structured.
The commission is usually about 5 to 6 percent of the home’s purchase price, split evenly between the listing agent and buyer’s agent. But the system dictates that sellers pay this fee, not buyers: “The seller pays the brokerage fee for the listing agent and any buyer agent, so there’s really no benefit to the buyer for going it alone,” Linskey says.
That said, sellers often build this fee into the asking price of their home ahead of time, so they might be open to a lower-priced offer if they know they won’t have to pay a buyer’s agent. If you’re buying without an agent, you could ask the seller to lower the purchase price based on the commission savings on their end — but of course, they don’t have to agree.
Pros and cons
You may save some money if you handle the sale yourself, particularly if the seller is willing to discount the asking price in exchange for not having to pay an agent’s commission. And you may simply prefer not to relinquish control to someone else, which is fine. But be sure you’re ready for the amount of time, work and research it will take to make the deal happen on your own.
The cons outweigh the pros here for most people. One of a Realtor’s key tasks is to evaluate the prices of homes currently on the market, along with those that have sold in recent months, to determine whether a seller’s asking price is in line with fair market values. If you’re inexperienced in doing this type of analysis yourself, you could unknowingly overpay.
You could also wind up with a home that has serious issues, having to sink money into repairs without help from the seller because you didn’t negotiate well or didn’t have the right contingencies in place — or, worse yet, skipped the inspection altogether. “I’ve heard stories where buyers worked out terms for a contract and found multiple, serious problems after they moved into the home,” Blank says, adding that the contract left those buyers with no recourse to get their money back or require the seller to pay for repairs.
How to buy a home without a Realtor: 5 key steps
If you’ve carefully considered the downsides and decided to move forward in the homebuying process without a Realtor, here’s how to make it happen, and what to expect at the closing.
1. Negotiate with the listing agent
You might be able to negotiate the price of the home with the listing agent, since you’re saving the seller from having to pay your agent’s commission. Even though the seller pays the commission, the buyer’s agent’s commission is often baked into the purchase price — since there’s no buyer’s agent, the seller might be willing to knock that fee off the purchase price.
Negotiating on a home purchase, of course, takes skill. But if the seller lowers the purchase price to reflect the lack of agent fees, that means a smaller mortgage and lower monthly payments for you.
2. Review the closing disclosure and ask questions
The closing disclosure is an important document that includes information about the terms of your mortgage and closing costs. Be sure to read this document carefully and compare everything to the original loan estimate from your lender. If you notice any discrepancies, now is the time to ask questions. Take special note of the interest rate, number of payments, whether there’s a prepayment penalty and any significant changes to closing costs, including the lender fees and title services fees.
It might also be wise to submit a request for final bills to be delivered on closing day. This will show that all of the seller’s outstanding bills, such as utilities, have been paid. In addition, you may need to prorate or give credit for real estate taxes, service contracts and homeowners insurance.
3. Have a professional review the paperwork
If you’re not using an agent, be sure to hire a real estate attorney early on to review the purchase agreement and closing documents. Buying a home is a large commitment, and the documents can be complicated. An experienced lawyer will be able to advise you and incorporate language into the contract to protect your interests.
Remember that issues can come up at any time in the sale, as well, so a real estate lawyer can be a resource and ally throughout the process. “Forget waiting until the closing to get an attorney,” Linskey says.
4. Bring cashier’s checks, proof of insurance and your IDs
There are a few important items you’ll need to bring to the closing. Have these items ready well in advance so you don’t run into any issues on the big day:
- Certified or cashier’s checks: You should be notified in advance of the checks you’ll need to bring to the closing, including who they should be made payable to and the exact amounts. Personal checks are usually not accepted, so you’ll need to go to your bank. Be very cautious if you get an email asking you to wire the funds instead — this can be a sign of mortgage fraud. Always confirm payment instructions with the title or settlement company directly.
- Proof of homeowners insurance: You’ll likely need to show proof that you have secured a policy to insure your home on the day of the closing that is good for at least one year.
- Government-issued photo ID: Make sure you have a current driver’s license or passport with you. If you’re buying a home with a partner or spouse, you’ll both need legal ID.
5. Sign all the documents and get the keys
At the closing, plan to spend one to two hours reviewing and signing two sets of documents: One set contains the agreement between you and your mortgage lender, and the other set contains the agreement between you and the seller. Take your time and read everything — and, if possible, have an attorney present. You never want to sign a legal document you don’t understand.
There are a lot of moving parts that go into buying a home, and working with an agent can save you time and money and stave off potential headaches. Take some time and interview a few different candidates to find an agent you trust to guide you through the process. If you’re concerned about being able to afford their commission, know that the buyer’s agent’s fees are typically paid for by the seller, not the buyer. However, the amount is often worked into the price of the home, so the buyer may technically be “paying” it, anyway.
If you’ve decided to buy a home without an agent, be cautious and consult a real estate attorney to review the paperwork and help walk you through the more complex parts of the transaction.
Yes. Buying a home with cash, meaning you pay the full price upfront rather than securing a mortgage loan, is fairly common. Most people don’t have such a large amount of liquid funds to spare, but if you do, a cash purchase can save you from having to pay back a large loan with a hefty interest rate. It saves you money in closing costs as well, since many buyers’ costs are lender-related.
It depends on which state you’re in. Many states legally require homebuyers to hire a real estate attorney, or require an attorney to oversee the closing. Even if your state does not require it, it is still a good idea: Real estate contracts are complex, and the stakes are high, so it’s smart to make sure everything is legally buttoned-down.
Yes, especially if you are inexperienced or a first-time homebuyer. An agent can help you navigate the complexities of purchasing a house, including finding options that meet your needs and budget and crafting a successful offer. And in a tight real estate market, a buyer’s agent’s expertise can make a big difference in securing a purchase.