Can you buy a house without a Realtor?

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If you’re wondering whether you need a Realtor to buy a home, the short answer is no. You might be hesitating to work with one because you don’t want to be saddled with Realtor fees, but typically, buyers don’t pay a real estate agent’s commission — sellers do. The fact is, many homebuyers use a Realtor to help guide them throughout the process, so before deciding whether or not to work with one when you buy a home, consider these pros and cons.

Reasons to buy a home with a Realtor’s help

Real estate agents (some of whom are Realtors, members of the National Association of Realtors, or NAR) are licensed professionals who work on your behalf and advocate for your interests. In most cases, sellers have a real estate agent working for them — a listing or seller’s agent — so you’ll want someone on your side, a buyer’s agent, who also has your back in negotiations and can help you understand how to make an offer on a home.

A buyer’s agent helps homebuyers in a host of other areas, as well. Here are some of the tasks you’d have to do yourself if you were to buy a home without a Realtor:

  • Find homes that match your budget and needs. Real estate search sites give you a sampling of what’s available, but you’ll have to research whether asking prices are justified based on comparable home sales in the area.
  • Dig up facts on a neighborhood, including ones that a seller might not disclose that could be important to you.
  • 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 understand.
  • Request and review seller disclosures. You might not know what to ask for or what sellers in your state are required to disclose.

The bottom line: Unless you’ve been through the process of buying a home before, it can be better to go with a Realtor than not, explains Laurie Blank, a Realtor with Edina Realty in Minneapolis.

“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,” Blank says.

Why some buyers pass on working with a Realtor

Although the majority of homebuyers work with a Realtor — just 12 percent of homebuyers didn’t in 2020, the NAR reports — buying a home without one can be a viable option for some, especially if you’re familiar with the property.

In fact, not working with a buyer’s agent on “an intra-family transaction is fairly common,” according to Pamela Linskey, attorney and founder of Linskey Law LLC, specializing in real estate, estate planning and probate in Massachusetts.

Most buyers considering not working with an agent are looking to save money — a goal that can be misguided given how Realtor commissions are typically structured. The commission is usually about 5 percent to 6 percent of the home’s purchase price and is split between the listing agent and buyer’s agent. Often, sellers build this fee into the price of their home.

“Generally, the only advantage to buying a home without an agent is saving the money it would cost to pay the agent, typically about 3 percent of the purchase price,” explains William P. Walzer, attorney at Davidoff Hutcher & Citron LLP in New York. “For expensive homes, that amount isn’t trivial and could come to tens of thousands of dollars.”

On a $450,000 home, for example, a 3 percent buyer’s agent commission would equal $13,500.

However, because the seller pays the commission, there might not be any real money-saving advantage for the buyer, Linskey points out: “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.”

In addition to saving money or already knowing the home in question, there are a few other reasons you might choose not to work with a Realtor:

  • You’ve hired an experienced real estate attorney to walk you through the paperwork and offer advice.
  • You’ve purchased multiple properties and understand the process.
  • The seller isn’t willing to pay the commission for a buyer’s agent, and you don’t want to pay it either.

Regardless of your motivation, though, know that without a Realtor, you could end up paying more for a home. That’s because 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 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.

Mark B. Huntley, a former real estate attorney who now runs a personal finance blog in San Diego, relays a similar story of a buyer who purchased a home without an agent. The buyer relied on his own inspection to justify why he wanted to forgo contingencies, which didn’t end well.

“Turns out, the house was riddled with termites, and the buyer had no legal way to get out of the contract, so he lost his $5,000 deposit,” Huntley says.

How to buy a home without a Realtor

If you’ve carefully considered the downsides and decide 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

As the buyer, 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 — but, if there’s no buyer’s agent, then the seller might be able 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 your 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.

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.

3. Have a professional review the paperwork

At the very least, hire a real estate attorney early on to review the purchase agreement and closing documents. Buying a home is a large purchase, and the documents can be complicated to read through and understand. An experienced lawyer will be able to advise you and have language incorporated into the purchase and sale agreement 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. Obtain a cashier’s check, 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 checkYou should be notified at least one day in advance of the checks you’ll need to bring to the closing, including who they should be made payable to and the exact amount. Personal checks are usually not accepted, so you’ll need to go to your bank for an official check.
  • Proof of homeowners insurance: You’ll 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 on you.

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 multiple 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 your attorney present). You don’t want to add your signature to a legal document you don’t understand.

Bottom line

There are a lot of moving parts that go into buying a home, and working with a Realtor can save you time and money and stave off potential headaches. If you’re concerned about being able to afford a Realtor’s commission, know that the buyer’s agent’s fees are typically paid for by the seller, not the buyer — although it’s often worked into list price of the home, so the buyer is technically “paying” it, anyway.

Still, most homebuyers partner with a Realtor. Those who don’t tend to be experienced buyers or are familiar with the home they’re looking to purchase. If you’ve decided to buy a home without a Realtor, it’s best to hire a real estate attorney to help guide you through the more complex parts of the transaction.

Summary: can you buy a house without a realtor?

Additional reporting by Diane Costagliola

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Written by
Sarah Li Cain
Insurance Contributor
Sarah Li Cain is an experienced content marketing writer specializing in FinTech, credit, loans, personal finance,and banking. Her work has appeared in Fortune 500 companies, publications and startups such as Transferwise, Discover, Bankrate, Quicken Loans and KeyBank.
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