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Buying a Home Without a Real Estate Agent


[Updated: Apr 17, 2020] Jan 28, 2020 by Aly J. Yale
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If you're thinking of buying a home, hiring a real estate agent is probably at the top of your to-do list. But is it actually necessary?

In today's day and age, not really. Platforms like Redfin Direct, Opendoor, and others have made direct homebuying mainstream. And even without these tools, you're still free to buy a home solo, just as you would a car, new shoes, or your weekly groceries.

Should you, though?

That depends. Buying real estate is a complicated process, and there are definite pros and cons to going it alone. Are you trying to decide if you should hire an agent for your upcoming purchase? Let's look at it from both sides of the aisle.

Does buying without an agent save you money?

The biggest potential benefit of buying a home solo is that you might save some money. But that's a big might.

Here's why those savings are up in the air: First, in the majority of agent-buyer arrangements, the buyer doesn't actually pay the real estate agent for their services. Instead, their fee is paid by the seller -- technically out of the seller's agent commission (6% to 7% of the sales price split between the two).

Because of this, any savings you get from going sans-agent would need to come from negotiating. You'd basically need to reason with the seller that, because their agent wouldn't need to share their fees, they can afford to lower their price point a little. Then, you'd both save some cash and come out on top.

Keep in mind there might be other buyers willing to pay the full price of the home -- or even more -- so this approach isn't guaranteed to work. It also depends largely on the contract the seller has with their agent. They might be required to pay the full two-agent commission regardless of whether you're represented. If that's the case, there's very little chance they'll be willing to budge on price -- unless they're really desperate to sell.

Pros and cons of buying solo

Saving money isn't the only reason you might buy a house on your own, though. Skipping representation can also give you more control, more flexibility, and, in some cases, a lower-pressure homebuying process.

The downside is that you won't have help or guidance along the way. There won't be anyone walking you through the process step by step, and you won't have the benefit of a seasoned pro's advice and insights when touring homes, negotiating, making offers, or signing those closing papers.

You also won't have access to all the tools an agent has at their disposal. This may put you at a disadvantage when deciding what to offer for a property or even finding listings in the first place. It could also mean more difficulty finding quality vendors, like mortgage lenders, home inspectors, etc. (though some quality digging on the web can help you here; it just takes a little legwork).

Let's sum it up:

Pros

  • You might save some money. That's only if you can negotiate the seller down.
  • There's no middleman. All communication goes through you.
  • You have more control. You're in the driver's seat from start to finish.
  • There's no pressure. There’s no one pushing you toward higher-priced listings to secure a good commission, and you’re also not pushed toward certain vendors.

Cons

  • You won't have a pro's help or guidance along the way.
  • Researching properties and the overall market might be more difficult.
  • Negotiating your sales contract might be harder.
  • You won't have a pro's vendor recommendations.
  • It might take longer to buy a house, especially if you aren't experienced.

How to buy solo

If you do decide to buy a home without an agent on your side, then it's important you take some precautions before signing those closing papers.

You should:

  • Have an attorney go through your contract. Depending on your state's laws, you might be legally required to have an attorney involved in (or even present at) your closing.
  • Hire a home inspector. They'll make sure the home you're buying is safe and free of defects.
  • Get pre-approved for your loan first. It can give you an edge over other buyers.
  • Do your research. Look at local comparable sales before making any offers. You want to be sure you're making a right-sized bid if you want to remain competitive.
  • Include contingencies in your offer. These allow you to back out of the deal under certain circumstances, such as if you can't get a loan, the home appraises too low, or you're unhappy with the inspection results.

Should you buy without a real estate agent?

At the end of the day, it's all a matter of how much responsibility you're willing to take on, as well as how comfortable you are with the homebuying process.

If you've bought and sold real estate before, and you're willing to bring in a real estate attorney for the legal stuff, then you're probably fine to go it alone. But if you're a first-timer, you're in a super-competitive market, or you just don't have a lot of time or energy to put into the transaction, you may be best served by a seasoned pro.

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