Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

Should You Consider Buying A House Without A Realtor?

Written by Than Merrill

Key Takeaways

  • Buying a house without a Realtor may work in your favor, but it might not.
  • If you know how to buy a house without a Realtor, you may be ahead of the competition, but that doesn’t always mean you should.
  • It’s not a question of if you can buy a house without a Realtor, but rather if you should buy a house without a Realtor.

Buying a house without a Realtor is entirely possible, and can actually be a great move for those of you that know what you are doing. At the very least, you’ll save on the cost that would have coincided with hiring a real estate professional. It is worth noting, however, that working with a Realtor is completely case dependent. While it’s true — you can buy a house without a Realtor — there are a lot of factors you need to consider; namely, your own experience, expectations and timeline. Not unlike many other aspects of the investing industry, buying a house without a Realtor is a double-edged sword. It can be one of the best or worst decisions you make, so be certain you know what you are getting into.

I want to make it abundantly clear: I, myself, am a huge proponent of working with a real estate agent. I am convinced their knowledge of a particular area is invaluable, and can actually save you a significant amount of time and money over the course of a transaction. That said, it can certainly pay to buy a house without a Realtor if you are prepared to handle the workload yourself.

Before you think about buying a house without a Realtor, I urge you to continue reading.

What Buying A House Without A Realtor Looks Like

Buying a house without a Realtor is exactly what you’d expect: you are solely responsible researching, finding, negotiating and dealing with every aspect that has become synonymous with purchasing a property. You, and you alone, are responsible for whichever outcome transpires. For better or for worse, your fate is in your hands, which is why many would argue in favor of working without a real estate agent.

If you are comfortable proceeding with a transaction without the help of a professional, buying a home without a Realtor would look something like this:

  • 12 Months Out: Whether you plan on hiring a Realtor or not, I highly recommend starting your home buying process at least 12 months out. That way, you should have ample time to sure up your finances and get things in order. That said, it’s at this point you should be doing things like checking your credit score, establishing a budget and identifying how much of a down payment you are comfortable parting ways with. The idea is to get your finances in order as early as possible so that you have a better idea of what you can afford when the time comes. So before you even look at your first home, be sure to mind due diligence and get your finances lined up.

  • 9 Months Out: Once you are confident you have a better idea of how much house you can afford, put your research to work and start looking for homes that meet your criteria. Proceed to research neighborhoods that fit within your price range and get a better feel for how far your dollars will take you. Feel free to visit some homes to get a better idea, but know this: you are only looking at this point. The idea here is to get a better idea of what you want, and what you may not be able to afford.

  • 6 Months Out: It’s not a bad idea to line up and secure financing about six months out from your impending purchase. That means you should start getting a little more serious about the method in which you plan to finance the deal. Research lenders and identify the loan that will work best for your situation. If you are buying a home as an investment property, this is when you would want to have a private money lender lined up. If, however, you plan on living in the home, you may want to find a traditional lender that meets your needs. It is worth noting that you are only researching at this point.

  • 3 Months Out: Here’s where things start to fall into place. It’s at this time, after all, I recommend finalizing your loan and initiating your home search. That said, I highly recommend getting pre-approved for a loan at least three months out — not pre-qualified (there is a difference). Pre-approval will award you with a specific amount you are approved for, and give you a firm number to shop around with. Once you have said number, start looking at houses in your price range with the intent to buy.

  • 2 Months Out: In the event you find a home you can’t live without, feel free to make an offer if it meets all of your criteria. More often than not, your initial offer will initiate a period of negotiations, which is where you will want to break out the research you have previously done. Any offer you make should be substantiated by facts and comparables. And remember, it’s normal for owners to counter offer, so don’t be discouraged if they turn down your first offer. In addition to the offer, it’s at this time that I recommend getting a home inspection. You want to be certain of what you are getting into, and an inspection is the best way to do so; it’ll also help you justify your offer.

  • 1 Month Out: Provided all the numbers match up and you are ready to proceed with a purchase, now is the time to conduct a final walkthrough and close the deal.

[ Just starting out in real estate? Copy these 12 “brain hacks” from America’s wealthiest real estate investors ]

Buying a home without a realtor

The Advantages Of Buying A House Without A Realtor Or Real Estate Agent

I maintain that there are both reasons for and against buying a house without a Realtor. That said, here are two of the most common reasons today’s buyers prefer not to work with a real estate agent:

Advantage 1: Control

There’s no way around it: some people prefer carrying their own fate in their own hands, and that’s exactly what neglecting to align your services with an agent nets today’s buyers. In foregoing the help of a professional real estate agent or Realtor, you are essentially expressing confidence in your own ability. Buying a house without a Realtor can be a great move if you know what you are doing. Provided you are in touch with a particular neighborhood, your own experience could actually play to your benefit. What’s more, there are no trust issues when you have nobody to blame but yourself. The control one is given when buying a home is a huge selling point — pun intended.

Advantage 2: Cost-Effective

Perhaps even more importantly, most buyers choose not to work with a Realtor for one simple reason: money. Hiring a Realtor or real estate agent, not surprisingly, costs money. Their efforts typically net them a percentage of the purchase price, which can amount to a large sum on most properties with today’s prices. Buying a home without the help of an agent means you are not obligated to pay anyone. In refusing to hire an agent, you don’t have to pay any fees that have become synonymous with the industry, sometimes adding up to tens of thousands of dollars.

The Risks Of Buying A House Without A Realtor Or Real Estate Agent

As I have already alluded to several times, I am convinced real estate agents and Realtors are worth their weight in gold — truly great ones, at least. If for nothing else, a Realtor is an investment; while their services will cost you up front, they can very easily return more than you spent to hire them. Let me explain:

Risk 1: Time

In neglecting the help of a Realtor, buyers run the risk of wasting time. If for nothing else, buying a home is a lengthy process. Everything from looking for properties to negotiating deals takes time. If you don’t know what you are doing, you could very easily waste more time than you would like. And what is time, if not for the most valuable asset made available to today’s investors? There’s no doubt about it: time is invaluable. The less time you spend searching for and procuring properties, the better. And a good Realtor can save you a significant amount of time.

Risk 2: Money

Realtors and real estate agents are essentially investments; you pay them with the hope of coming out with more money on the other end. That said, buyers run the risk of losing money by actually not hiring an agent. Realtors, for example, are professionals in a complex industry; they know how things work and, more importantly, how to save you money. In addition to saving you time (which is better than money), a good Realtor should easily be able to negotiate a better price point. So while their services will cost money, it’s more likely that they will save you more than they cost upfront.

How to buy a house without a realtor

Working With A Realtor Vs An Agent

Working with a Realtor Vs an agent has less to do with the title and more to do with individual preferences. You see, there is no correct answer as to which type of real estate professional you should work with. If for nothing else, there are good and bad apples on each end of the spectrum.

In order to understand which real estate professional you should work with, it’s best to clarify their individual roles. Real estate agents, otherwise known as brokers, are essentially anyone that has earned their real estate license in a given state. Again, state requirements vary dramatically, but each state requires you to take a minimum number of classes and pass a test to earn your license. Realtors, on the other hand, are essentially agents with additional credentials — namely, a membership in the National Association of Realtors (NAR). As members of the NAR, Realtors not only have access to an unparalleled network of like-minded peers, but they must also uphold standards set forth by the association.

I want to make it abundantly clear, however: do not discredit a real estate agent for not being a part of the NAR. It is by no means a requirement to be a good real estate professional. In fact, a good real estate agent is invaluable. Al I recommend is that you mind due diligence and vet those you intend to work with.

Should you consider buying a house without a Realtor? The answer isn’t as simple as the question. Whereas neglecting to align your services with a real estate professional does put the ball in your court and at least award you the opportunity to save money, the results aren’t always as cut and dry as many would appreciate. There is only one definitive answer to the question: maybe. Yes, it’s true that you don’t have to pay for their services, but you also lose out on significant advantages. Their knowledge of a particular region and experience alone could save you significant time and money — a lot more than their initial cost. So before you consider buying a house without a Realtor, make sure you weigh the pros and cons.

Have you ever thought about buying a house on your own? Buying a house without a Realtor is tricky, but it’s not impossible. If you have any advice for our fellow readers, feel free to leave it in the comments below.