12 min read Jul 20, 2022

How to Buy a House Without a Realtor

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Does buying a house without a realtor really work? Is it the right decision to do it on your own? What are the steps on how to buy a house without a realtor?

It’s obvious. You want to buy a property you love for a fair price. So, if you really want to save more cash, doing it on your own can be a great option. But it doesn’t mean you’ll land on some dream house without exerting a lot of time and effort. Home sales are not all about knocking on a door and handing over cash easily to buy a property. Real estate agents went through so many challenges to learn the process. After all, they have the hard-earned experience that most of us don’t have yet.

Although hiring an agent can be pretty promising, it can also be costly. So, most buyers resort to doing it themselves. Let’s start by checking what reasons most buyers prefer purchasing a home without a realtor.

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Why Buy a House Without a Realtor?

By numbers, only 11% of actual home buyers bought properties last 2019 without a broker or agent. Although that’s fairly a low number, some buyers have their personal preference or want to do the process without someone who they’ll have to rely on every time. In fact, most buyers who bought homes directly from the house owner are satisfied with the experience.
  • Transactions are simplified. Both the buyer and seller are in direct contact and don’t have to go through a middleman—whether these are for home visits, offer purchase, or when you have queries or info needed.
  • The overall process is shortened. Without an agent, you don’t have to rely on someone’s pace. You have the same momentum with the seller every transaction. So, both parties are always up-to-date with what’s going on.
  • Avoid paying a hefty price for an agent’s commission—at least 6% of the purchase price of your home between both party’s agent commission. Sellers, too, who opt into FSBO (For Sale by Owner) usually go for this since they don’t have to pay a listing agent commission.
  • No one knows the property better than the seller/homeowner. Instead of asking the agent for some detailed info about the house, you can talk or contact the seller immediately. This saves you more time and can trust the info too.
  • In some cases, you’re buying a property from a close friend, a relative, or someone with who you have complete trust. Or you’re a realtor yourself or a former one, which in this case, you know the ins and outs already—or often, you know someone who is a realtor and your friend or relative.
Additionally, most of the resources are readily available online. Homebuyer tools and other property information can be used and viewed without the help of an agent. With today’s technology, you can access data at the tip of your fingertips.

Things to Consider Before Homebuying Without an Agent

Although starting on how to buy a house without a realtor sounds complicated, it is still doable with the right procedure. But don’t forget that you’re on your own most of the time and it’s your full responsibility to close the deal. If you’re eager to purchase a home without an agent, here are some things first you have to think about.
  • You’ll likely do most of the work which means you’ll be bombarded with paperwork. Agreements, contracts, and deeds that you have to get familiar with beforehand.
  • You have to learn how to negotiate well. Negotiating an offer is a tricky process. If done right can help you save thousands.
  • Some sellers may withhold some disclosure forms. Or major defects that could affect the home’s condition in the future. So, research what disclosures are needed in your state or municipality.
  • You don’t have someone to answer your certain questions about the neighborhood. Some agents specialized in working on specific areas, county, or state. They know most of the facts, papers, and disclosures necessary in that neighborhood.
  • Sellers may take advantage of you since you have no idea of the costs. You might pay more which you shouldn’t have or could have split between both parties.

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How to Buy a House Without a Realtor?

Preparation is vital. When you buy a house without the expertise of a realtor or agent, there are definitely underlying risks involved. That’s why research as much as you can and set the groundwork to lessen the hassles of the home-buying process.

Determine What House You Can Afford

Don’t buy a house because you want an investment. Decide on purchasing a property because you simply want a home. Don’t think of it as quick cash or profit. Or in other words, buy a property that you can afford today, not for a few years. Spending too much on your mortgage can cause serious problems in the long run. Perhaps, you can’t even save or cover the expenses.

Prepare Your Finances

Save the cash for the home down payment and other miscellaneous expenses. Make sure you’re financially qualified to buy the property. Otherwise, someone will eventually grab it.

Check Your Credit Score

A good credit score means you can get a mortgage easily. Before getting a mortgage, avoid applying for any kind of loan or a fresh credit card. Prepare at least six months to improve your score.

Prepare Your Documentation

It’s also critical to gather your documents to verify your finances on your mortgage application. Make sure you have your W-2’s, paystubs, bank statements, and as well as copies of your last two tax returns (for freelance or self-employed income)

Go Shopping for Your Mortgage

To show you’re a serious and qualified buyer, get a mortgage pre-approval. With that, you can know the range of your mortgage loan and the interest rate you can expect since this verifies how much price you can afford to spend on a home.

Research the Neighborhood and Find Homes

Now, you have to be very careful in choosing the neighborhood because it may also determine the home’s price, too. What kind of neighborhood are you looking for? Do you like homes near top schools? Or areas close to malls, parks, or highways? Think about it. Look at more than one area and see if it’s within your price range. You can visit Zillow or Houzeo’s site, especially if you’re looking to buy homes for sale by owner (FSBO). Also, you can check out a few lists of the best For Sale by Owner websites (with reviews) that feature houses for sale. After narrowing your search online, visit the home to take an in-depth look, and to check its condition. You can now contact the owner or agent to schedule an open house.

Obtain the Seller’s Disclosure

A seller’s disclosure is a standard checklist form containing material defects and features of the property. For sellers who use FSBO, it’s completed along with the listing paperwork provided by the listing agent. Make sure you review the form thoroughly. Here are some of the essential information home sellers have to legally disclose. Remember that seller’s disclosure laws vary from state to state or county to county. Some state has a “caveat emptor” approach, which means it’s the buyer’s responsibility to verify the condition of the home before a purchase is made. As such, you can ask the seller directly if you have questions regarding the home’s condition.

Give an Offer and Negotiate

First things first. Since sellers typically price their home for sale via CMA or using home estimates. Do a comparative market analysis or CMA to estimate a reasonable and competitive offer. Analyze what similar properties in the immediate area, specifically sold within the last 3 to 6 months.

Ultimately, make an offer lower than the amount of money you’ve preapproved on your mortgage. So, you can still negotiate for a better price. Once you have the right offer, you can now prepare for an offer letter on a legal contract. Here’s what the offer letter should contain. You may send it to the listing agent or directly to the seller (for FSBOs).
  • Complete home address
  • Your full legal name and other co-buyer
  • Amount offered for the home
  • Any condition or request the seller should know before the sale
  • Your mortgage preapproval letter
  • Closing costs or Seller Concessions—total costs the seller must agree to pay
  • Other items you want to be part of the sale, e.g. appliances, furniture, etc.
  • Your expected closing date
  • Your expected move date
  • Target date (deadline) of the seller’s response to the letter
After the proposed offer is accepted and the Purchase and Sale Agreement is signed, you may have the right to perform a home inspection or appraisal. Don’t forget to hire a real estate attorney. Some states require the presence of a real estate attorney, to legally transfer the home title. An attorney can also help you assist with the legal transaction and any other issues that could cause litigation.

Find a Title Company

To protect yourself from any future legal problems, get title insurance. Ask your lawyer for advice or opinion. The title insurance serves as your protection from any pending or future title issues such as forged documents or undisclosed liens.

Hire a Qualified Home Inspector

You need to find out if the home is still in good condition—from major to minor home systems. Is the foundation solid? Does the roof leak? Determine if the defects are serious or which ones need some minor repairs. There are telltale signs you can observe—especially to older homes, like a certain door won’t close completely—that may need some expert’s opinion. Important: Home inspections usually don’t include checking issues like asbestos or hazardous materials at home. You can hire a toxic substance expert to do that work if those issues might be present. If there are issues with the home’s condition after performing a home inspection, you can still re-negotiate with the seller afterward. You can ask for repairs, for reimbursement, a discount, or you can always cancel the sale. For documentation, always keep the whole records of emails or other written exchanges, from your first to the last transaction.

Closing the Home

Contact your real estate attorney during the home closing. Your lawyer will help you prepare the documents and legal paperwork needed. Since it’s the final step of the transaction, all things must be done with special care. Don’t forget to prepare a primary and secondary I.D. as well to verify your identity.

Review the Closing Documents and Paperwork

Before signing any papers, read the documents and form carefully and thoroughly to understand the imposed regulations and provisions stated in the contract, deed, or record. Be sure everything is in order. After signing, double-check if there are any typos in your name, address, property address, bank info, and other critical details. Also, don’t forget to examine the total amount or inadvertent costs.

Ask Questions When You’re in Doubt

To make sure there’s nothing missing out, let your real estate attorney review the papers. If you have questions, ask the seller or your attorney immediately. Otherwise, you may regret it in the future. Important: Ask questions when in doubt. Do some extra research about the state and municipality requirements. Congratulations! You’re now a proud homeowner.

Bottom Line

Learning how to buy a house without a realtor means you’ll have to wear many hats. There’s a big responsibility you have to expect since you overtake most of the real estate agent’s tasks. Hear this: you can still consider hiring a real estate to navigate all of the regulatory work and legal needs with buying a home. Make a list of reasons why you don’t need one—or what advantages you could have when you’re on your own. But if you’re confident and want to save more, understand the overall process and the risks involved. Always be prepared so you can minimize your stress. If you haven’t any idea of homes you’re looking for, you can buy FSBO homes for sale listed on our site for a fair price. Don’t worry, you can expect a smooth transaction from start to finish. Houzeo has made most of the paperwork automated and digitized. So, buying a property will be less exhausting.

Frequently Asked Questions

How hard is it to buy a house without a realtor?

Whether or not you find it hard to buy without a realtor depends on how experienced you are in real estate transactions. In case, you had hired an agent then they will be responsible for pulling in comparable sales reports, negotiating on the sale prices, taking care of the legal paperwork, etc. However, since you don't have an agent by your side you'll have to do all of these tasks by yourself or hire some third-party professional to look after these transactions.

What documents do I need to buy a house without an agent?

Real estate transactions are already complicated in themselves and involve a lot of paperwork at each step, right from the initial offer and counteroffer to inspection and appraisal documents. The closing documents are a separate task in themselves and since they all are bound by law, we recommend you to have a real estate attorney by your side to handle the legal paperwork for you.

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