Technically you don’t need a real estate agent to buy a home, but it’s probably for the best. An experienced local Realtor has insight into your neighborhood and the housing market.
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While it may not seem like it at first glance, buying a house without a Realtor by your side is a very real option. A real estate agent or a Realtor (a licensed real estate salesperson who belongs to the National Association of Realtors) provides you with a lot of support during the home buying process, but if you want to fly solo, you can. Because many real estate agents are in fact Realtors, we will be using these terms interchangeably to explain what your options are as a buyer.
Do you need a Realtor to buy a house?
Legally, you aren’t required to work with a Realtor to buy a house. Hiring a real estate agent can make the whole process go a lot more smoothly, but you don’t have to work with one if you don’t want to.
Only 12% of homebuyers did not use an agent to buy their home, according to a 2020 study from the National Association of Realtors. Even people buying new construction homes can benefit from using an agent and often do — Realtors can help negotiate with the builder on your behalf.
If you plan to buy from a family member, friend, or neighbor, you may not need an agent as much as someone does in a normal sale when they're buying from a stranger.
Can you be your own real estate agent?
If you have a license, it's perfectly legal to act as your own real estate agent when you're buying (or selling) your own house.
If you decide not to work with a Realtor, here are a few important steps you'll need to take on your own.
- Negotiate with the listing agent: Most likely the seller of the home you want will choose to work with a listing agent. Instead of having your Realtor make an offer for you and negotiate on your behalf, you will do this yourself.
- Review closing disclosures with the mortgage lender: The closing disclosures will include key information about the terms of your mortgage and closing costs. Normally your agent would be able to help walk you through this information — regarding interest rates, payments, and closing costs — so pay close attention.
- Navigate the home inspection process: A home inspection can help you identify any issues with the house and negotiate seller concessions.
- Consider hiring an attorney: You may want to hire a real estate lawyer to review your purchase contract and other documents to make sure everything is in order.
Pros and cons of buying a house without a Realtor
Before you make a decision regarding whether or not you want to work with a real estate agent while you hunt for the perfect home, keep these advantages and disadvantages of doing so in mind.
- Save money: Because the seller won’t need to pay commission for your Realtor if you don't have one, you can try to negotiate a lower purchase price for the home.
- No middleman: If you want to expedite a sale and work directly with the seller, cutting out the agent can make the communication process simpler.
- Process can be overwhelming. Buying a new home isn't easy and Realtors have a high level of expertise that usually makes the whole process run smoother. Not to mention, they take on a lot of work like filling out forms, keeping the process moving, and making sure you have all of your ducks in a row.
- Less industry insight: Agents have access to the MLS real estate portal that lists a ton of information about homes for sale and as a normal consumer you can’t access that information. A good Realtor is familiar with neighborhoods in your area, what fair prices are, and what warning signs to look out for when you buy a home.
- No negotiation help: A confident and experienced Realtor can help you get the best deal possible and put in a competitive offer below the asking price based on their comparative market analysis. Without an agent you'll have to negotiate with the seller's agent on your own.
- You could overpay for your home: Without an agent's insight on pricing, the seller or their agent might convince you to skip inspections or appraisals. You may even find you are stuck with a lot of pricey repairs once you move in.
- You could miss out on homes: Real estate agents may have access to off-market homes or homes that haven’t been listed yet that you wouldn’t be able to find otherwise.
- You may spend more on lawyer fees. If you skip out on hiring an agent and things go awry, you may end up seeking legal advice from a professional. The seller won’t cover the attorney fees, so you'll have to pay out of pocket.
Should you buy a home without an agent?
If you are very familiar with the homebuying process, have bought homes in the past, or are purchasing a home from a friend or family member, you may be able to navigate the process without hiring a Realtor.
It’s important to negotiate a discount if you do make an offer without a realtor. If the seller won’t budge on price, you’re better off bringing your own Realtor in to help you finalize the sale since you aren’t the one footing the bill.
But if you’re a first-time homebuyer, still house hunting, or buying in a competitive market, you may benefit from having an agent. A good Realtor can help you find a home that meets your budget and suits your specific needs. (If you need a home in a good school district with a mother-in-law's suite and double ovens for under $800,000, your agent will research all the comparable homes in your area to find the ones that meet your unique specifications.)
Having an agent can save you a lot of time and stress, by helping you negotiate your offer to make sure you not only get the best deal financially and logistically, too. Because the seller pays the Realtor commission when you buy a house, money shouldn’t be the reason why you decide not to work with an agent.
A home is likely the biggest purchase you will ever make, and more often than not using a real estate agent will better your odds of making the right moves during the process. When you work with Orchard, you'll have a dedicated local agent who'll help you find a home that checks all the boxes. Learn more here.