Most people you know who have bought a home have probably done so with the help of a Realtor® or real estate agent. In fact, a 2023 report shows that 89% of home purchases involve a Realtor or broker. (Realtors, by the way, are real estate agents who belong to the National Association of Realtors, requiring them to adhere to a certain code of ethics; we’ll use the terms interchangeably here.)
But agents may charge a fee, so you might be asking yourself, “Do I need a Realtor or real estate agent to buy a house?” The answer is no — you aren’t required to go through a professional to complete the transaction.
That said, doing without an agent is not a decision to make lightly. Buying a house is likely the biggest investment you’ll ever make. So if you make a mistake in the home-buying process, there’s a lot of money and possibly other risks on the line. Let’s take a look at the pros and cons of going solo as a home shopper.
Table of Contents
What Does a Real Estate Agent Do?
Before you decide whether or not to forgo a real estate agent, it can be a good idea to brush up on what they actually do.
Real estate agents are licensed to help clients buy and sell real estate. Realtors, as mentioned, have to follow an ethics code, which includes putting their clients’ interests first.
Among the work that real estate agents do for buyers is:
• Look for property listings that fit their clients’ goals
• Check out listings in person
• Write offers and counteroffers
• Be present for inspections
• Help negotiate with the seller
• Troubleshoot any roadblocks that come up
They can also often help with a variety of referrals, whether to a mortgage broker, a home stager, a real estate lawyer, or a contractor.
How to Buy a House Without a Real Estate Agent
If you want to join the few buyers who forge ahead and buy a house without a Realtor, it’s important to prepare yourself to take on the tasks agents normally do.
Especially if you’re green, it’s essential to learn how you can prepare to buy a home. Here’s a rundown of some of the key responsibilities you will likely need to manage.
Step 1. Consider Your Mortgage Options
Unless you are an all-cash buyer, you’ll need to explore the different types of mortgage loans. You could get prequalified for a mortgage with several lenders so you have a sense of what size mortgage loan you might qualify for.
Step 2. Research Neighborhoods
As you zero in on neighborhoods that meet your criteria, then it’s a good idea to do your research and learn the price of recent sales. This will help you understand if the homes you tour are priced correctly — and if they fit within your budget.
Step 3. Get Preapproved For a Home Loan
As your house search starts to heat up, you’ll probably want to get preapproved for a mortgage. Once your application is processed, you’ll have a preapproval letter to share with sellers to reassure them that you’re serious about buying. The lender will consider your income, your debt-to-income ratio, credit scores, and ability to make a down payment and meet closing costs.
Step 4. Hire a Home Inspector
When you find a home you’re interested in, it’s recommended that you hire a home inspector. This professional will issue a report that lets you know the ins and outs of a home’s condition and may lead to further negotiation.
Step 5. Request a Seller’s Disclosure
Ask for a seller’s disclosure, a document that can contain information about repairs and upgrades the seller did on the home as well as problems they’re aware of. You can ask them about any structural problems; condition of the HVAC, plumbing, and electrical systems; mold and mildew; termite damage; the presence of lead paint, radon, and asbestos, and so forth.
Step 6. Make An Offer
The offer will include the amount you’re offering, what you’d like to stay in the home (such as appliances), and closing dates. Including an appraisal contingency in the offer means you can cancel the contract if something goes wrong without losing your deposit.
Recommended: How to Make An Offer On a House
Step 7. Hire a Real Estate Lawyer
It’s usually a good idea to hire a real estate lawyer to prepare documents and look over your contract before you sign it.
Step 8. Negotiate
Sellers, meanwhile, will likely include a loan contingency. During this part of the process, there may be counteroffers and negotiations between you and the seller about the price of the home or repairs you might want the seller to make. The appraiser will also file a report on the home, so that you and your lender can feel confident the home’s value matches its price. Keep copies of all communications as negotiations progress.
Step 9. Finalize Documentation and Close On Your Property
At the closing of the loan, you’ll need to sign documents and handle other aspects that a Realtor might typically help you with.
It is typically recommended that the buyer obtain owner’s title insurance, which protects the buyer against title defects such as mechanic’s liens and other after-closing problems. It usually costs about $1,000, but will vary with the price of your home and from state to state.
Recommended: How Long Does It Take to Close On a House?
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Benefits of Buying a House Without a Realtor
Buying a home without a real estate professional can have some upsides. Here’s a closer look at the benefits you might reap.
1. Saving Money
Historically, there wasn’t much incentive for a homebuyer to work without a real estate agent because the agent’s commission fees were paid by the seller. But starting in mid-2024, the landscape changed. Now real estate commission fees are changing, and there is no guarantee that the seller will pay the buyer’s agent. Instead, the buyer and agent need to discuss a fee structure before they begin working together. You might find that an agent is paid an hourly fee, or perhaps charges a flat rate. Some agents may request a percentage of the home price.
While working without an agent may save you money, how much is up in the air. The only thing you can be certain of is that if you don’t use an agent, you will work harder to find a home and close the deal.
2. Info Galore
If you’re planning on buying a house without a Realtor, you likely have access to some of the same information that the pros do. Historically, agents had lots of insider tidbits about listings.
Now, you can instantly find out about new properties and neighborhood demographics with the click of a button online. That means taking the buying process into one’s own hands is considered by some as increasingly feasible. Plus, there are an array of great tools to help you with calculations, like a home affordability calculator.
And since no one knows what you are looking for as well as you do, the search process can sometimes be more efficient.
3. A Familiar Real Estate Deal
One situation where it might make sense to eschew an agent is if a friend or family member is selling you the property.
Although risks may still be involved, the transaction may be more straightforward if you are buying a house from a relative or someone you know well. You still want to make sure you and the seller are clear on the price, closing date, what furniture or fixtures will be included, contingencies, and more.
It is typically recommended that a buyer review and approve home inspections and obtain full loan approval in writing before lifting certain contingencies.
If it is known that a contingency date cannot be met or another material change takes place after the contract is written, such as a seller credit for closing costs, a contract addendum executed by all parties outlining the change is usually obtained.
Check out local real estate
market trends to help with
your home-buying journey.
Drawbacks of Buying Without a Realtor
Not hiring a real estate agent or Realtor to assist you with your home search comes with disadvantages and risks.
1. All the Work
You have to be constantly on the ball, keeping a lookout for properties and arranging a time with sellers to visit them.
The process can be exhausting and time consuming, and if you aren’t attentive, you could let great homes slip by or make the hunt longer than it might have been with a real estate agent.
You’ll also have to navigate the world of mortgages (from the mortgage basics to possibly buying points to bring down your rate) without an agent to serve as a sounding board or offer a second opinion.
2. All the Risk
You’ll be on the hook for all the details of the transaction. Without an agent, you’ll need to determine the correct bid price and terms, watch the contract contingency dates, and know the ins and outs of the purchase contract.
Agents are experienced in helping to point to hidden flaws in the property or transaction.
If you don’t have a real estate agent in your corner to help research the proper bid price, you may risk paying more than you need to on the home — which may work out to more money spent.
3. Your Pool of Knowledge May Not Be That Deep
Agents have access to information that’s not necessarily online, thanks to their connections with other real estate agents, inspectors, etc.
Then there’s the experience factor. Most agents operate under a seasoned broker who oversees and consults on various transactions.
It could take a lot of effort to figure out what a Realtor has learned through years on the job and ongoing education. That learning curve may not be worth your time.
Factors to Consider When You Buy Without an Agent
So now that you have read about how to buy a home without a Realtor, as well as the pros and cons, perhaps you are still thinking that flying solo is right for you. If so, do one more check-in and consider these factors:
Market Knowledge
You will not have in-depth, ongoing insight into housing prices in the area where you are searching. A Realtor can help you understand pricing history, potential upcoming property-tax hikes, local drainage or flood potential, and more. They are often skilled at pointing out distinctive features as well as potential problem areas with homes.
Negotiation Strategy
Real estate agents typically have years of experience knowing when a home seller is negotiable and by how much. They can guide you through offers and counteroffers, as well as bidding wars. They also know next steps if a home inspection points out significant problem areas or if there are hitches as you work through your mortgage contingencies. This can save you time and stress, as well as keep your deal in play.
Red Tape and Paperwork
Bidding on and purchasing a home involves all kinds of paperwork, including mortgage applications, offers, contracts, title searches, and more. For someone who is not familiar with the process (you, quite possibly), this can be a steep, time-consuming, and possibly frustrating learning curve. A Realtor can help alleviate a chunk of this burden.
Professional Connections
As noted above, it can take a village of professionals to finalize a home sale. Some of the people who may be involved include mortgage brokers, home inspectors, roof inspectors, real estate lawyers, contractors, and more. Most real estate agents have an extensive network to quickly get you the connections you need to qualified professionals.
The Takeaway
Do you need a real estate agent to buy a house? No, you don’t. It’s entirely possible to learn how to buy a home without a Realtor and perhaps avoid paying for the agent’s time and expertise. Just realize all of the work and risk involved in finding a home, making an offer, handling contingencies, and closing the deal.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Can you make an offer on a house without a real estate agent?
A buyer is not required to be represented by a real estate agent in order to make an offer on a house, but unless the house is for sale by owner, you’ll need to work with the seller’s agent to communicate your offer to the owner.
Does buying a house without a real estate agent reduce the price?
Not necessarily. Even if you, as the buyer, are not represented by a real estate agent, the seller may use an agent to list and show the home and process offers.
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