You don’t need a real estate agent to buy a house. However, you may want to use one to protect your interests, given the complexities of the homebuying process.
Buying a home may be the biggest purchase you ever make, and the process can sometimes feel overwhelming. So, it’s no wonder 87% of buyers in 2021 purchased their home with the help of a real estate agent or broker, according to a 2022 report from the National Association of Realtors.
While working with a real estate agent typically makes the buying process go more smoothly, it’s also possible to buy a home without one. Going solo on a home purchase might be a way to save money, but it could also present a great deal of difficulty for someone who’s not a real estate professional.
Can I buy a home without a real estate agent?
Most real estate agents charge fees of 4% to 6% of a property’s sale price. That can be a significant sum of money, and it’s one you might be eager to avoid paying. But real estate agents do more than look for homes you might like – they also take on potentially difficult, complex and time-consuming tasks. Without an agent, you’d need to quickly learn the ropes of the numerous tasks a real estate agent typically would take on. These include:
- Locating a home to make an offer on
- Comparing the asking price to recent sale prices for homes in the same neighborhood
- Negotiating a sale price
- Obtaining legally required disclosures from the seller about the condition of the home
- Lining up a home inspection
- Getting an appraisal of the home to determine its market value
- Drafting a purchase agreement contract and submitting your offer on the home
- Working with the seller’s agent and your lender to hammer out the details of the purchase
- Hiring an attorney to draft legal documents for the deal
- Finding a mortgage company and title company
- Handling negotiations of contingencies and deal-sweeteners
Even if you’ve purchased a home in the past and consider yourself familiar with how the process typically goes, you may not be fully aware of the complete scope of duties real estate agents perform behind the scenes. Attempting to purchase a home without a real estate agent can be quite an undertaking, so it’s important you fully understand what you’d be getting yourself into.
Pros and cons of working with a real estate agent
Working with a real estate agent can have the following advantages:
- Agents offer expertise and experience you, the buyer, likely don’t have
- They might catch problems with the deal you don’t notice
- They may spot issues with the condition of the house you may not see
- They can ensure you get all the seller’s disclosures you’re supposed to
- They can schedule tours of homes
- They can help you evaluate which home is the best one for you to buy
- They might give you more credibility with a seller than if you’re acting as your own agent
- They provide insights about neighborhoods, schools and other factors homebuyers may not know
- They handle all sorts of paperwork involved with the home sale
Working with a real estate agent also has the following potential disadvantages:
- The price of a home might be higher. That’s because the seller normally pays commissions to both the buyer’s and seller’s real estate agents, and those commissions typically are built into the sale price. Working without an agent generally eliminates the commission for the buyer’s agent and, therefore, can lead to a lower sale price.
- An agent will act on your behalf, so you can’t negotiate directly with the seller
- Your agent may turn out to be bad at their job, or you may end up working with their assistants instead of the agent themself. They could also fumble the ball when it comes to completing their duties and cause you to lose out on a home purchase.
How to buy a home without a real estate agent
If you decide to buy a home without a real estate agent, here are steps you’ll likely need to take to complete a deal:
- Shop around for a mortgage and obtain a prequalification letter
- Find a home you want to buy
- Figure out, based on sale prices for nearby homes, whether the asking price is fair
- Write up an offer for the seller to consider
- Negotiate the sale price, including counteroffers if the seller doesn’t agree to your proposed price
- Include contingencies in case you need to back out of the deal. Contingencies are clauses written into a real estate contract allowing you to walk away from the deal in certain circumstances. For instance, one contingency clause might let you cancel the purchase if a home inspection uncovers the need for substantial repairs.
- Nail down the seller’s disclosures about the condition of the home
- Hire a real estate attorney to draft and review legal documents
- Schedule an inspection of the home
- Hire an appraiser to calculate the market value of the home
- Close on the purchase of the home. This normally involves signing paperwork at a title company’s office and paying closing costs.
Get your credit mortgage ready
Regardless of whether you hire a real estate agent or go the DIY route, you’ll want to check your credit report and score as part of the homebuying process. With better credit, you can improve your odds of securing favorable mortgage terms, such as a lower interest rate. If your credit isn’t where you want it to be, take steps to improve your credit before starting the homebuying process.