Buying a House Without a Realtor: Smart Idea or Big Headache?

Is buying a house without a Realtor a good idea? You might think it can save you money, but you should consider all the potential pros and cons first.
Last updated Aug 30, 2021 | By Ben Walker
First-time homebuyers looking at house

FinanceBuzz is reader-supported. We may receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

If you’re in the market to buy your first home, you might be hesitant to use a Realtor because you’ve heard it will cost you money. The reality is that Realtor commissions are often factored into a home’s sale price, so you typically won’t pay extra fees as a buyer.

Buying a house without a Realtor might not save you money, but in certain cases, it could still make sense for both first-time homebuyers and experienced homebuyers to be their own agents during the home purchase process. So whether you’re new to home buying or buying your second home, consider the pros and cons not using a Realtor might entail.

In this article

Buying a house without a Realtor: When it might make sense

There are a few unique situations you might run into where buying a house without a Realtor might make sense, including:

You’re buying a family home

If you’re buying a home from a relative, you likely don’t need to hire a real estate agent.

“There are many times that a property is sold within the family from one generation to another, and there is definitely no need for a real estate broker in this scenario,” says Bill Samuel, a licensed real estate broker with Blue Ladder Development.

Family members are often more familiar with each other and have an increased likelihood of coming to an agreement by simply talking it out. This doesn’t mean you can avoid doing paperwork, which could require working with a real estate lawyer.

You’re buying a for sale by owner (FSBO) home

Certain home sales may be FSBO, or for sale by owner. These are special cases where there is no listing agent, or seller’s agent, helping coordinate and push the sale through. Instead, the home seller is the owner and also their own agent, likely because they want to avoid paying the cost of a selling agent’s commission.

Communicating directly with the owner of a home can have its advantages, such as allowing you to learn more about the house and leaving room for you to negotiate. If the owner favors direct communication and you’re comfortable with the buying process, you might also be able to skip hiring an agent. However, hiring a real estate attorney to help with paperwork could be a good idea in this case, too.

You’re buying a brand new home

Buying a brand new home that’s being built gives you a unique opportunity to work directly with the builder. And if you’re working with the builder, you might not need help from a Realtor. Builders are often experienced with how the homebuying process works, so they might be able to help you take the right steps as your house is being built.

You understand the homebuying process

A real estate agent’s primary role is to help you buy or sell a home. This could include helping you find the type of home you’re looking for or making sure your house is listed correctly so interested buyers can find it.

But if you already understand how the homebuying process works, you might not need the help of an agent. Understanding the process means knowing how to get a loan, what counteroffers are, what a closing date is, and more. In addition, you would also have to be comfortable with negotiating with the seller or seller’s agent and filling out all the necessary paperwork.

3 potential drawbacks to consider

In most cases, buying a house without a Realtor isn’t going to make sense. If this is a route you’re considering, think about the potential drawbacks. Here are a few to acknowledge:

Limited guidance

If you don’t hire a real estate agent to help you find and buy a home, you’re effectively on your own. Any decision you make will be limited to your own understanding and thought process, and it’s up to you to make sure everything is legit and in order.

“My wife and I bought our first home in Conroe, TX in 2004. We did not use a Realtor,” says Andrew Fortune, Realtor and Owner of Great Colorado Homes. “We ended up overpaying because the neighborhood developer was creating fraudulent appraisals and eventually got sued in a class-action lawsuit. If it weren’t for the lawsuit, we would have lost our first home completely and had to start over.”

An experienced real estate agent often knows the ins and outs of the market and the homebuying process, so it’s easier for them to spot and help you avoid potential pitfalls.

No assistance with buying process

In addition to having to do the home search on your own, not having an agent’s help means you also have to navigate other parts of the homebuying process. This often includes securing a home loan, figuring out if you should hire a home inspector or attorney, doing paperwork, working through contingencies, and more.

Do you know how closing costs work? Are you up to date on housing laws where you live? The list of things a Realtor can help you with is exhaustive, but all of these responsibilities fall to you if you don’t have a buyer’s agent.

You’re on your own with negotiation

Everyone wants to get the best deal possible when buying or selling a home, which typically involves a negotiation between both parties. This is often where a buyer’s agent and seller’s agent will talk and discuss potential options, making sure to keep their party’s wishes in mind.

Negotiations may be simple for an experienced professional who knows the market. But when the negotiations are up to you, it might be a different story. Considering homes are often worth hundreds of thousands of dollars, a negotiation could easily impact the cost of a home by thousands of dollars.

If you don’t know what you’re doing, you could end up paying a lot of extra money because you didn’t negotiate well.

How to buy a house without a Realtor

To buy a house without a Realtor, follow these steps:

  • Get a preapproval: Before you start your house search, you need to know what you can afford. Getting preapproved for a mortgage loan can give you a range of how much you’re able to spend on a home, which may affect where you look and what types of houses you look at.
  • Use the right websites: Once you’re preapproved for a loan and know what you can afford, start searching for homes. One of the easiest ways to see what’s available in your area is to search for houses online. Use websites such as Zillow.com, Realtor.com, Trulia.com, and others to quickly and easily find homes for sale. These types of websites allow you to filter by sale price, bedrooms, bathrooms, and more to narrow down your search to your preferences.
  • Go to open houses: Looking at online photos and taking virtual tours of properties can give you a good idea of what to expect from a home. But these are no substitute for going to an open house and taking an in-person tour of the property. Open houses are typically open to the public and can provide excellent opportunities for speaking with a listing agent or whoever is hosting the open house.
  • Make an offer: Once you’ve done your due diligence researching home prices and other factors, it’s time to put together an official offer letter to give to the seller. This letter often includes your name and the names of anyone else buying the home with you, any contingencies you have for purchasing the home, a copy of your mortgage loan preapproval, and other important information.
  • Review seller disclosures: In most situations, sellers are legally required to disclose known issues about the property they’re selling. This could include water damage, pest infestations, mechanical issues, and more. It’s important to review these disclosures, so you know which repairs or adjustments, if any, need to be made to the house and whether you want to proceed with the purchase.
  • Get a home inspection: A home inspection can offer more information about a home than even the seller may not have been aware of. Getting an inspection done can be important if you want to be sure the house is safe and secure, from home systems to the structure itself.
  • Be prepared to negotiate: Seller disclosures and home inspections, as well as the asking price of a home, could leave room to negotiate the final purchase price. For example, if you find issues during an inspection, you might include fixes the seller has to make before you make the purchase. In addition, it could make sense to work a home warranty (that the seller buys) into the equation if you’re worried about future repairs.
  • Hire a real estate attorney: Some states require a real estate lawyer at some point during the homebuying process, often for reviewing important documents. If one is required where you live, you have to hire one. If one isn’t required, you might still consider hiring one to make sure all the paperwork is in order and to help with negotiations.
  • Work with a mortgage lender to secure financing: You should have already gone through the preapproval process to get a range of what you can possibly borrow for a mortgage loan. Now it’s time to get an actual loan to pay for your new home. The best mortgage lenders can help you compare interest rates and figure out the types of loans that work best for your situation.
  • Finalize the process: The end is in sight once you’ve signed your loan. Now you have to do a final walkthrough, sign closing documents, and make sure closing costs are covered. The date everything is finalized is typically called the closing date and is the day you become a new homeowner.

FAQs about buying a house without a Realtor

Is it a bad idea to buy a house without a Realtor?

Buying a house without a Realtor could make sense in certain situations, but hiring one will generally be the better option. This is because a Realtor can bring their experience into the equation and guide you through the homebuying process, whether it’s negotiating a home’s price, helping you secure financing, or making sure all the necessary paperwork is filled out correctly.

How do you make an offer on a house without a Realtor?

A Realtor would typically write up an offer letter with specific information included that protects your interests, including whether you have any contingencies in place as part of your purchase offer. However, if you haven’t hired a real estate agent, you’ll have to write an official offer letter yourself with all the necessary information.

Do you need to pay the seller’s agent commission as a buyer?

A buyer generally doesn’t pay a seller’s agent’s commission. Often, the commission is factored into the listing price of the home. The seller’s agent’s commission is typically paid by the seller with the proceeds from the home sale.

What are the benefits of not using a Realtor?

People generally opt not to use a Realtor because they’re concerned about the cost of a real estate agent’s commission, but these concerns are often unfounded. Since Realtor commissions are generally factored into a home’s sale price rather than a direct cost, there’s little downside to working with a real estate agent to buy a home.

Plus, if you’re not experienced with the real estate industry and you choose not to work with a Realtor, you could end up paying a lot of money out of pocket due to common mistakes. This could include not knowing how to negotiate the price of a home or not understanding how much a home is worth.

Bottom line

The homebuying process can be expensive and time-consuming, especially if you don’t have much experience with real estate. This is why it typically makes sense to hire a Realtor to help guide you through making important decisions. But buying a house without one can also make sense in certain cases.

If you want to go the route of avoiding the help of a Realtor, consider the potential drawbacks beforehand. This can help you decide whether it would be worth it for you to continue down this path or to research further the benefits of using a Realtor.

Figure Benefits

  • Take advantage of historically low interest rates
  • Easily see your rate in a few minutes
  • 100% online application done from the comfort of your home
  • Good/excellent credit needed

Author Details

Ben Walker Ben Walker is a credit cards and travel writer at FinanceBuzz who loves helping others achieve their travel goals through financially-sound decisions. For nearly a decade, he has been using credit card points and miles for the sole purpose of traveling the world. Ben has been featured in The Washington Post, MSN, Debt.com, and Finder.com.