Buying a house without a Realtor is undoubtedly possible by just about anyone, but that doesn’t mean that you should take on the endeavor and according to the National Association of Realtors, about 88% of people hire a real estate agent to buy a home.
Home sales are very complicated and real estate agents are trained professionals with knowledge of contracts, pricing, negotiations and experience that most of us don’t have. They help people buy and sell houses every day while the average person does not.
Additionally, the buyer usually doesn’t pay for a real estate agent, the seller does. So there is no cost to enlist the help of a professional for a complicated transaction.
However, some people just want to do it themselves. Here’s a look at when they make sense and how to buy a house without a Realtor.
Reasons to buy a house without a realtor
There are few reasons when buying a home without professional help makes sense.
- You were a real estate agent or are currently one.
- A close friend or relative can help you with minor parts of the transaction for free.
- You’re buying the house from a friend or family member that is trustworthy.
- This isn’t your first rodeo and you’ve bought lots of other properties in the past.
- The seller doesn’t want to pay the agent’s commission. This happens when you are buying a home for sale by owner (FSBO) and the seller isn’t paying a listing agent their commission and doesn’t want to pay a buyers agent either. In this case, try to negotiate the price down a bit since there is no real estate commission whatsoever to be added into the price. You should be paying a little less since you are doing all of the work.
How to buy a house without a realtor
Before you even start the buying process, you should have a narrowed down list of communities that you want to purchase property in. Ensure your budget allows you to afford the purchase of a home and check your credit score to see if you can qualify for a mortgage.
Once you have your communities picked out and the budget worked out, then it’s time to do some general research on home prices in the target area. There are hundreds of real estate agent websites to choose from but it’s best to pick one that allows you to sign up for property search alerts. Search alerts are great because once you have everything lined up to start making offers, you can get notifications the second listings hit the market. If it’s a competitive market, then it will serve you well to be getting notifications before other people do. But before you can move forward, the following steps need to be completed.
- Get a mortgage pre-approval: This is an important step because it shows any potential sellers that you are a qualified, serious buyer. In addition, it confirms your initial budget research and tells you how much house you are able to afford and the associated interest rate with the mortgage.
- Hire a real estate attorney: If you are going at it alone, it’s advisable to spend the money on a real estate lawyer so they can review all of the paperwork. It’s easy to make a mistake if you aren’t familiar with the language in the paperwork and it could cost you a lot of money. Attorney’s are not as expensive as real estate agents and you pay them hourly. You probably will probably only need them a few times in the transaction.
- Get a sellers disclosure: Sellers have to legally disclose structural and safety issues in their property with potential buyers. If you are acting as your own agent, it’s your responsibility to ask for the sellers disclosure. Generally, disclosures contain uses of lead based paint, asbestos, radon, and the last time important items like the roof and furnace were replaced.
- Research comparable sales: Before making an offer, it’s important to know if the purchase price is reasonable or whether the desired area is hot or cold. The information will be useful in determining the recent selling prices of comparable properties and if there is any competition for the home. This will help navigate you when you decide what to offer.
- Make an offer: Offers are made on real estate contracts and is a good time to solicit the help of a real estate lawyer. These are binding legal documents and when submitting the offer there will need to be a check for earnest money which is determined by you and the seller. Any offers or counter offers need to include contingency clauses which involve the closing date, home inspectors, that need to take place before closing. You’ll want to find a home inspector who will spend a few hours going through the home to ensure that nothing is wrong with it.
- Talk to your mortgage lender: Once an offer has been accepted, you need to let your mortgage lender know so that they can move forward with getting your loan officially approved. They’ll tell you what the closing costs are and how much the final payment will be.
- Find a title company: You’ll need to have a title company and schedule a day to close. They will do a title search and obtain title insurance for your protection. Additionally, the mortgage company will need to be in touch with the title company.
- Closing: On the day of closing, make sure everything’s ready for you to take possession by doing a final walk through. When you go to the title company’s office to do the closing, have your ID, cashiers check.
Other options to consider
It’s worth considering a company like Trelora to assist you with purchasing your home. You’ll get all of the help a real estate professional would offer, but they throw in an extra perk by splitting their commission 50/50 with buyers. So not only will you save the headaches of doing it yourself, you’ll get money back at closing.
Mike is the Market Director for Colorado at TRELORA. He is personally responsible for closing over 600 successful real estate transactions and has played a role in closing hundreds more. He started at TRELORA in August of 2016 and began his real estate career in Jacksonville, FL in February of 2011. In his tenure at TRELORA he has been a Buy Manager, Buy Agent, Listing Agent, and Field Agent before accepting his current position as Market Director in January of 2021. Mike has a Bachelor of Science in Finance and a Master of Science in Entrepreneurship both from the University of Florida. Go Gators!