How to Buy a House Without a Realtor

When you make the decision to buy a house without a realtor, you are definitely taking the road less traveled by. Many will tell you that this road also happens to be a particularly difficult one.

But, just because you are taking the more challenging path, it doesn’t mean it’s not a smart one (something about “roads less traveled” and “making all the difference” comes to mind). After all, the services of a real estate agent often come at a not-insignificant cost to you (which we’ll get to soon).

But, before we dive into costs, let’s address some of the common misconceptions people have about real estate:

  • You can’t buy a home without a real estate agent. Now, hold on… this is obviously not true. If it were, we wouldn’t write a 1,500-word article explaining how to go about doing it.
  • If you buy without an agent, you can only buy for-sale-by-owner homes. Again, this is false. You can make an offer on any home you want. Technically, you can knock on your neighbor’s door and ask to buy their home. This would be weird and we don’t recommend it, but you can do it.
  • If you buy without an agent, you don’t have to pay any commission. This is both true and false… it all depends on the agreement the seller’s agent has with his or her sellers. Before making an offer, this is certainly worth checking into. If you are going to pay the commission either way, then you might as well have your own agent.
  • If you don’t use an agent, you don’t need an attorney. This is definitely a misconception. While in some states you can buy a home without an attorney, many of them require it. But, regardless, we highly recommend that you hire an attorney since you will be dealing with multiple legal agreements.
  • Closing without a realtor is just awful, like something from a horror movie. While closing without a realtor is definitely a more involved process, it’s nothing you can’t handle. A few google searches will help you find the necessary templates for all the different documents you’ll need in the closing process. And, especially if you hire that attorney, you’ll find this process to be relatively breezy.

Now that we have addressed some of the misconceptions about buying a house without a realtor, let’s dive into the details–– what is the cost of buying a house?

neon dollar sign

Cost of Buying a House

The cost of buying a house can vary drastically depending on several details–– What city or state is the house located in? What neighborhood is the house in? How old or how new is the house? What kind of view does the house have? Is the house located near or at the edge of a body of water? How expensive are the homes near the house you are interested in?

These are all factors that can drastically change how much a home is worth.

However, one thing stays pretty consistent as far as the cost of buying a house goes–– commission. Generally speaking, buyers and sellers agents split a 6% commission on the sales prices of the home.

So, if the home sells for $1,000,000, the agents are splitting $60,000 between the two of them–– not a bad paycheck. As you can see, when you’re dealing with house-sized sums of money, an additional 6% can get quite pricey. And now you get a better idea of why some might opt to try their hand at buying a house without a realtor (and without the markup).

No, you probably aren’t buying a million dollar home, but let’s just think hypothetically for a second–– what could you do with another $30,000+ to your name?

Buy a brand new car. Pay for part of your kid’s college tuition. Buy an exotic cat. Purchase a lifetime supply of Ben & Jerry’s Cherry Garcia Ice cream.

Anyways, you get the point… 6% can amount to a lot of money.

a man setting out on his own, without a realtor

How to Buy a House Without a Realtor

Like we mentioned earlier, buying a house without a realtor can be difficult. But, it is our hope that with these 6 easy steps, you will find that buying a house without a realtor is doable. Let’s break this down, step by step:

  1. Pick the best time to buy a house (for you). Many people have the misconception that the Spring is the best time to buy a home and for good reason–– this is when the most deals take place. But, a lot of buying and selling can lead to stiff competition, meaning you are likely to spend more money on your dream home.If you see a home that you have your eye on, you might want to consider waiting–– winter is coming. In all seriousness, winter is when home prices drop to an all-time low as buyers stay cooped up in their homes keeping warm. If you are looking for good prices, this is the time to buy–– but beware, you may not love the selection. More houses tend to go up for sale during the warmer months. Something about supply and demand.
  2. Start looking at house hunting sites It’s much easier to buy a home today without a realtor than it was a decade ago. With so many house hunting sites available, you can find your dream home while in your pajamas, sitting on the couch, watching Seinfeld, and drinking red wine. (While you get your hunt on, check out our more thorough list of apartment hunting tips here). Here are a few great house hunting sites we recommend you take a look at:
    • Realtor.com. This site updates its listings every fifteen minutes. Which means they will save you the time and frustration of falling in love with a home that’s already been sold. And, you can find good deals as soon as they go live.
    • Homefinder.com. If you’re interested in searching by category (new construction, foreclosure, classified, etc) this is a great place to look. Plus, it walks you through how to buy a home step-by-step.
    • Trulia.com. This is an awesome site that is super user-friendly. You will quickly take a liking to its bright vibrant pictures and smooth user-interface. There’s nothing worse than looking at poor-quality pictures when trying to find potential dream home candidates online.
  3. Find a lawyer. As we mentioned before, it’s important to find a lawyer before making an offer on a home. While a real estate agent isn’t necessary for you to buy a home, we would definitely recommend that you make the investment in a good lawyer that knows his or her stuff. Buying a home involves a lot of legal agreements and paperwork, and it would do you some good to get an expert’s opinion.
  4. Tour the home in person. This really goes without saying, but you are going to want to tour the home in person before ever making an offer. You can do this in one of two ways: 1. Attend an open house or 2. Call the listing agent and set up a time to see the home. But, before doing so, you want to be transparent with the seller’s agent. Let them know you are buying a house without a realtor.
  5. Get Pre-Approved for a Loan Before ever making an offer, you want to get pre-approved for a loan (unless you can pay for it in cash, Mr. Money-Bags). But, for most of us common-folk, we don’t have a couple hundred thousand dollars cash laying around to buy our dream home. Since a home is a really big purchase, you will want to reassure the seller that you can back up your offer. This can be done with a pre-approved loan.
  6. Closing Without a Realtor Now, it’s time to make an offer. While closing with a realtor can be hard, it is certainly doable. Let’s say you find the perfect home and decide to make an offer. The listing agent may expect to take a share of the commission that would usually go to your agent (if you had one). To avoid this situation, be certain that your offer spells out in writing that you are offering less than the listing price (with the expectation that the seller will not need to pay out the buyer’s agent’s share of the commission). This should be reviewed by your attorney.

After making an offer, you will need to conduct inspections and appraisals to make sure you aren’t getting yourself into a nasty situation. The last thing you want to do is buy a house with a crawl space full of black mold. Normally, the buyer’s agent is the one that helps with these things, so you are going to have to work your negotiation skills and have the seller’s agent help you out–– some agents will help out graciously, some will not.

If everything checks out okay, you can finally move on to the paperwork–– which is where your lawyer is going to come in handy.

SOLD: Buying a House Without a Realtor

As you’ve read, buying a house without a realtor is no walk in the park, but it can definitely save you a lot of money. If you do decide to go the non-realtor direction, our biggest piece of advice is to hire a lawyer. Yes, we have said it a lot, but we mean it. We want you to stay out of any legal trouble, and having a licensed attorney on your team is the best way to do just that.

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