Do you need a REALTOR® to buy a house?

Can you buy a house without a REALTOR^®? Though you can certainly buy or sell a house without a real estate agent,  a trained and licensed agent actually handles a lot behind the scenes. From networking with other agents to negotiating offers and helping interpret paperwork, a REALTOR®’s services and expertise are often worth the cost.

A REALTOR^® is a real estate agent who is a member of the National Association of REALTORS^®. A real estate agent and a REALTOR^® are both licensed agents trained to help you along the home buying or selling process, and the terms are often used interchangeably.

So what changes when you don’t use a REALTOR^®? In short, more of the homebuying process falls on you, making it important to understand what to expect before you buy a house on your own.

Key takeaways:

• Buying without a REALTOR^® means handling the entire process yourself, from the home search to negotiations to closing.
• Buying a home without an agent doesn’t guarantee savings, since costs are often negotiable and are still commonly covered by the seller.
• A real estate agent's expertise can help you avoid making expensive mistakes throughout negotiations, contracts, and inspections.

What to consider when buying a home without a real estate agent

If you’re thinking about buying a house without a REALTOR^®, it’s important to understand what the process involves. While it’s possible to handle everything on your own, there are a few key things to keep in mind before getting started.

Agents have market knowledge

Licensed real estate agents not only have access to private tools like the multiple listing service (MLS) to quickly find properties that fit your criteria. Agents can also draw on professional networks and be alerted to upcoming listings before they go public. While buyers can search sites like Redfin to find active homes for sale, the MLS is the fastest way to access new and upcoming listings.

Great agents know their local market well, which can be a distinct advantage in finding homes and putting in an offer. Local agents can easily spot an overpriced home, potentially preventing you from overpaying for a property that doesn't have the comparables to back up its price.

Negotiations may be trickier on your own

Real estate agents are professional negotiators. If you buy a home without an agent, you will have to decide how much to offer and conduct all communications with the seller yourself. When you work with a buyer’s agent, they will negotiate on your behalf with the seller and the seller's agent.

A common issue buyers run into is problems uncovered during the home inspection. For example, if the report says the roof needs to be replaced, and it'll cost $15,000, how do you ask the seller for a price reduction or credit? Agents handle situations like this regularly and know how to negotiate, so you're less likely to take on major expenses after closing.

There’s a lot of paperwork involved

Buying a home involves a mountain of documentation, from disclosures and contracts to financial statements. Negotiations are also common and can go through multiple rounds of counteroffers, and each round generates more paperwork that is legally binding.

Working with an agent can draw your attention to legal clauses that could affect the home buying process or even what happens after closing.

Agents have connections you might not

Buying a home doesn’t just involve the buyer, seller, and agents. The process often includes lenders, contractors, home inspectors, specialty inspectors, attorneys, and title companies as well.

Agents spend years building relationships with professionals related to the home buying and selling process and can provide recommendations based on their experiences. Without an agent, you will need to find reputable experts on your own.

How to buy a house without a real estate agent

If you have accepted the risks and decided that you want to move forward without professional representation, here are the steps you should follow:

Step 1: Apply for mortgage preapproval

The first thing to do is to get mortgage preapproval. A mortgage preapproval, or initial mortgage approval, is a letter from your lender stating how much it expects you can borrow to buy a home. This helps you determine your budget.

Being preapproved before submitting an offer can indicate to sellers you’re serious. It shows that a bank has done an initial check of your finances and is willing to lend the funds to support your offer, if all goes well.

To get a preapproval letter, you can apply online with Rocket Mortgage by sharing documentation about your income, assets, and the home you’re interested in. We’ll check your credit report and give you an interest rate and payment information, so you’ll know the real numbers you’re working with.

Step 2: Research the neighborhood

Location plays a major role in both your day-to-day life and your home’s long-term value. Before focusing on specific properties, take time to research neighborhoods, looking at price trends, amenities, and what it’s like to live there. From commute and convenience to school districts and the overall feel, understanding the pros and cons of different neighborhoods can help narrow your search.

Step 3: Find a property

Once you’ve settled on a location, start tracking homes on the market. Even if a home is listed online, the description usually includes upcoming open houses and a way to reach out to the listing agent to request a tour.

During an open house or tour, pay close attention to the property’s condition. Ask what is included in the sale, like furniture or appliances. It’s all important information to have when considering how much to offer on the home.

Step 4: Make an offer

Once you find a home you like, you may need to move quickly, especially in a competitive market. That means submitting a formal written offer that lays out the terms of purchase. Using a vetted template and consulting a real estate attorney can help ensure your offer is complete and professional.

This includes your offer price, down payment amount, purchasing timeline, and any contingencies, which are conditions that must be met for the sale to go through. A common one to include is a home inspection contingency, which gives buyers the chance to cancel the purchase or renegotiate if the inspection uncovers any serious issues.

Step 5: Get an inspection

Once your offer is accepted, schedule a home inspection with a qualified and certified home inspector. They will not only check the home's heating and cooling systems, windows, roof, and structural integrity, but also note any other minor issues or signs of damage or deferred maintenance. A home inspection helps protect buyers from inheriting expensive issues with a home.

Step 6: Review the Seller’s Disclosure

Along with the home inspection, carefully review the Seller’s Disclosure. This is a document where the seller lists all known issues with the home, like structural issues, flooding, plumbing or electrical problems, or other major issues. It might also include information on past remodeling work.

Things to know about seller’s disclosures

• Knowledge limitations: Sellers are generally only required to disclose issues they are personally aware of.
• State variations: Disclosure requirements vary by state. The only disclosure required nationally is for lead-based paint in homes built before 1978.
• Caveat emptor: Some states follow caveat emptor, or a buyer-beware approach, meaning the seller has little to no legal obligation to disclose defects unless you ask.

If you are in a buyer-beware state, be sure to ask the seller direct questions. Most state laws require sellers to answer these questions honestly if they are asked directly, even if they weren't required to volunteer the information, such as:

1. Are you aware of any asbestos or lead paint in the home?
2. Have there been any issues with the plumbing or electrical systems?
3. When was the roof last repaired or replaced?
4. Has the home ever had termites or mold?
5. Has anyone died in the home?

Step 7: Close on the home

Closing escrow is the final step in the process. You’ll complete a final walk-through to ensure the property is in the agreed-upon condition and that any required repairs have been addressed.

After that, you’ll sign the final paperwork and loan documents to complete the sale. Whether or not you use an agent to buy your home, it’s recommended to have a real estate attorney review your closing documents to ensure everything looks good.

Does buying a house without a REALTOR^® save you money?

Buying a house without a REALTOR^® might save you money, but not necessarily. In the past, sellers covered both the buyer’s and seller’s agent fees, so buyers didn’t typically pay out of pocket.

But with recent industry changes, buyers need to sign a representation agreement that clearly states how much their agent will be paid. In some cases, that means the buyer may be responsible for covering part or all of the fee, though it can still be negotiated for the seller to pay as part of the offer.

Going without an agent can save buyers thousands in fees, but independent representation can also cost more in the long run. Handling negotiations, contracts, and potential issues, such as future developments or hidden easements, might be worth having professional help – and the seller might even cover the cost.

FAQ

Here are answers to common questions about buying a home without a REALTOR^®.

Are there situations where I have to hire a real estate agent to buy a house?

No, there are no laws requiring you to hire an agent. The decision is entirely up to you and your comfort level with the process. If you’re worried about finding the right house, negotiating, paperwork, and industry knowledge, you might prefer working with an experienced real estate agent.

What are the pros and cons of buying a house without a real estate agent?

One of the biggest benefits of buying a house without a real estate agent is having more direct control over the transaction. You may also have an opportunity to negotiate terms more freely. On the other hand, you'll take on all the responsibilities an agent would normally handle, including submitting offers, negotiating repairs, managing paperwork, and being aware of local laws, which can be time-consuming and risky if you're unfamiliar with the process.

Is buying a house without an agent worth it?

It depends on your experience. For seasoned investors, it might be worth buying a house without an agent. For first-time or infrequent buyers, the expert guidance an agent provides is often worth the cost, especially since agents can help you negotiate for the seller to pay their fee anyway.

The bottom line: You can buy a house without a REALTOR^®, but it’s more difficult

Buying a house without a REALTOR^® is doable, but it’s not necessarily the easy route. You’ll be taking on everything an agent typically handles, from finding the right home to back-and-forth conversations with the seller to ensuring all the paperwork is correct and on time. And while you might save money in some cases, it’s not guaranteed.

For many buyers, working with a real estate agent can make homebuying more manageable. If you decide to go through the process on your own, make sure you understand what you need to do, local real estate knowledge, and the risks you’re taking on. 

Whether you choose to work with an agent or spearhead the journey alone, you can jumpstart the process by applying for a mortgage with Rocket Mortgage – so when the perfect house appears, you’ll be ready to make an offer.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.

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