Should I Buy A House Without A Realtor? Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Hero Images/Getty Images January 12, 2021 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Sarah Li Cain is an experienced content marketing writer specializing in FinTech, credit, loans, personal finance and banking. Her work has appeared in Fortune 500 companies, publications and startups such as Transferwise, Discover, Bankrate, Quicken Loans and KeyBank. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Jeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you’re wondering whether you need a Realtor to , the short answer is no. You might be hesitating to work with one because you don’t want to be saddled with , but typically, buyers don’t pay a real estate agent’s commission — sellers do. The fact is, many homebuyers use a Realtor to help guide them throughout the process, so before deciding whether or not to work with one when you buy a home, consider these pros and cons. Reasons to buy a home with a Realtor s help
(some of whom are Realtors, members of the National Association of Realtors, or NAR) are licensed professionals. In most cases, sellers have a real estate agent working for them — a listing or seller’s agent — so you’ll want someone on your side, a buyer’s agent, who also has your back in negotiations and can help you understand . A buyer’s agent can help homebuyers in a host of other areas, as well. Here are some of the tasks you’d have to do yourself if you were to buy a home without a Realtor: Find homes that and needs. Real estate search sites give you a sampling of what’s available, but you’ll have to research whether asking prices are justified based on in the area. Your Realtor can help you do this and save you time. Dig up facts on a neighborhood, including ones that a seller might not disclose that could be important to you. Your Realtor can share insight you might not have thought to ask about, too. , including the price and in the purchase agreement. Navigate the , and negotiate repairs or credits with the seller. Decipher paperwork that could be filled with complex jargon and terms you don’t understand. Request and review seller disclosures. You might not know what to ask for or what sellers in your state are required to disclose. The bottom line: Unless you’ve been through the process of buying a home before, it can be better to go with a Realtor than not. “There are too many legal loopholes and fancy terms that can get overwhelming and confusing for someone who’s not well-versed in the real estate business,” explains Laurie Blank, a Realtor with Edina Realty in Minneapolis. Why some buyers pass on working with a Realtor
Although the majority of homebuyers work with a Realtor — just 12 percent of homebuyers didn’t in 2020, the NAR reports — buying a home without one can be a viable option for some, especially if you’re familiar with the property. In fact, not working with a buyer’s agent on “an intra-family transaction is fairly common,” according to Pamela Linskey, attorney and founder of Linskey Law LLC, specializing in real estate, estate planning and probate in Massachusetts. Most buyers considering not working with an agent are looking to save money — a goal that can be misguided given how Realtor commissions are typically structured. The commission is usually about 5 percent to 6 percent of the home’s purchase price and is split between the listing agent and buyer’s agent. Often, sellers build this fee into the price of their home. “Generally, the only advantage to buying a home without an agent is saving the money it would cost to pay the agent, typically about 3 percent of the purchase price,” explains William P. Walzer, attorney at Davidoff Hutcher & Citron LLP in New York. “For expensive homes, that amount isn’t trivial and could come to tens of thousands of dollars.” On a $450,000 home, for example, a 3 percent buyer’s agent commission would equal $13,500. However, because the seller pays the commission, there might not be any real money-saving advantage for the buyer, Linskey points out: “The seller pays the brokerage fee for the listing agent and any buyer agent, so there’s really no benefit to the buyer for going it alone.” In addition to saving money or already knowing the home in question, there are a few other reasons you might choose not to work with a Realtor: You’ve hired an experienced to walk you through the paperwork and offer advice. You’ve purchased multiple properties and understand the process. The seller isn’t willing to pay the commission for a buyer’s agent, and you don’t want to pay it either. Regardless of your motivation, though, know that without a Realtor, you could end up paying more for a home. That’s because one of a Realtor’s key tasks is to evaluate the prices of homes currently on the market, along with those that have sold in recent months, to determine whether a seller’s asking price is in line with . If you’re inexperienced in doing this type of analysis yourself, you could unknowingly overpay. You could also wind up with a home that has serious issues, having to sink money into repairs without help from the seller because you didn’t have the right contingencies in place or, worse yet, skipped the inspection altogether. “I’ve heard stories where buyers worked out terms for a contract and found multiple, serious problems after they moved into the home,” Blank says, adding that the contract left those buyers with no recourse to get their money back or require the seller to pay for repairs. Mark B. Huntley, a former real estate attorney who now runs a personal finance blog in San Diego, relays a similar story of a buyer who purchased a home without an agent. The buyer relied on his own inspection to justify why he wanted to forgo contingencies, which didn’t end well. “Turns out, the house was riddled with termites, and the buyer had no legal way to get out of the contract, so he lost his $5,000 deposit,” Huntley says. How to buy a home without a Realtor
If you’ve carefully considered the downsides and decide to move forward in the homebuying process without a Realtor, here’s how to make it happen and . 1 Negotiate with the listing agent
As the buyer, you might be able to negotiate the price of the home with the listing agent since you’re saving the seller from having to pay your agent’s commission. Even though the seller pays the commission, the buyer’s agent’s commission is often baked into the purchase price — but, if there’s no buyer’s agent, then the seller might be able to knock that fee off the purchase price. Negotiating on a home purchase, of course, takes skill, but if the seller lowers the purchase price to reflect the lack of agent fees, that means a smaller mortgage and lower monthly payments for you. 2 Review the closing disclosure and ask questions
The is an important document that includes information about the terms of your mortgage and . Be sure to read this document carefully and compare everything to your original from your lender. If you notice any discrepancies, now is the time to ask questions. Take special note of the interest rate, number of payments, whether there’s a prepayment penalty and any significant changes to closing costs, including the lender fees and title services fees. It might also be wise to submit a request for final bills to be delivered on closing day. This will show that all of the seller’s outstanding bills, such as utilities, have been paid. In addition, you may need to prorate or give credit for real estate taxes, service contracts and . 3 Have a professional review the paperwork
At the very least, hire a real estate attorney early on to review the purchase agreement and closing documents. Buying a home is a large purchase, and the documents can be complicated to read through and understand. An experienced lawyer will be able to advise you and have language incorporated into the purchase and sale agreement to protect your interests. Remember that issues can come up at any time in the sale, as well, so a real estate lawyer can be a resource and ally throughout the process, including at the closing. “Forget waiting until the closing to get an attorney,” Linskey says. 4 Obtain a cashier s check proof of insurance and your IDs
There are a few important items you’ll need to bring to the closing. Have these items ready well in advance so you don’t run into any issues on the big day: Certified or : You should be notified at least one day in advance of the checks you’ll need to bring to the closing, including who they should be made payable to and the exact amount. Personal checks are usually not accepted, so you’ll need to go to your bank for an official check. Be very cautious if you get an email asking you to wire the funds instead this can be a sign of a . As a practice, always confirm payment instructions with the title or settlement company directly. Proof of homeowners insurance: You’ll need to show proof that you have secured a policy to insure your home on the day of the closing that is good for at least one year. Government-issued photo ID: Make sure you have a current driver’s license or passport on you. If you’re buying a home with a partner or spouse, you’ll both need your ID. 5 Sign all the documents and get the keys
At the closing, plan to spend one to two hours reviewing and signing two sets of multiple documents. One set contains the agreement between you and your mortgage lender, and the other set contains the agreement between you and the seller Take your time and read everything (and, if possible, have your attorney present). You don’t want to add your signature to a legal document you don’t understand. Bottom line
There are a lot of moving parts that go into buying a home, and working with a Realtor can save you time and money and stave off potential headaches. If you’re concerned about being able to afford a Realtor’s commission, know that the buyer’s agent’s fees are typically paid for by the seller, not the buyer — although it’s often worked into list price of the home, so the buyer is technically “paying” it, anyway. Still, most homebuyers partner with a Realtor. Those who don’t tend to be experienced buyers or are familiar with the home they’re looking to purchase. If you’ve decided to buy a home without a Realtor, it’s best to hire a real estate attorney to help guide you through the more complex parts of the transaction. Summary Can you buy a house without a Realtor
Additional reporting by Diane Costagliola Learn more
SHARE: Sarah Li Cain is an experienced content marketing writer specializing in FinTech, credit, loans, personal finance and banking. Her work has appeared in Fortune 500 companies, publications and startups such as Transferwise, Discover, Bankrate, Quicken Loans and KeyBank. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Jeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry. Related Articles