Is Buying a Home Without a Realtor a Good Idea?

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Realtors advertise everywhere about their services and how critical it is for you to use them if you’re looking to buy a home.

However, it’s no secret that anyone can go ahead and buy property without needing to engage a realtor. Buying directly from an owner isn’t that much more complicated than buying it with an agent. 

If you’re looking to buy a home by yourself, check out our real estate property search.

The only key benefit of having a realtor is they can tackle some of the administrative and logistical steps involved in buying a home. It’s just easier, that’s all.

But, if you’re willing to take these on, you can save a lot of money and even close deals faster!

Related: Buying A House Checklist

Benefits of buying a home without a realtor

woman sitting in her newly furnished home

Save money

When you avoid dealing with a realtor, you’re going to save a ton of money in commission during the closing that you’ll owe the realtor.

A realtor can charge anywhere from 4% to 6% of the sale price, either paid by the seller or split between you and the seller. In either case, if you deal directly with an owner, you can negotiate on a lower sale price that removes this added overhead that the seller may have baked in.

No middleman

No realtor also means there’s no intermediary involved in the process. This can make the entire searching and negotiating process much more efficient. There’s no chance of messages getting lost in translation and delays in waiting to hear back.

You’ll have complete control over the buying experience and can be crystal clear on communicating your needs. 

Own the relationship

Nothing works magic when buying a property than establishing rapport and comfort with a seller. This is especially true when you buy a home without a realtor. You can choose to identify listings and initiate conversations independently. This means communicating what you’re looking for from the get-go and getting a transparent understanding of the needs of the seller.

Realtors can also be more rigid and obtuse in their handling. This makes sellers more formal and hard to negotiate with. By owning the relationship directly, this can be avoided.

Tech-forward

Realtors have long enjoyed steady business, and that means they haven’t utilized the power of technology yet. This means when you engage in a realtor; they aren’t using the latest innovations in finding the best listings for you.

If you decide to look for property on your own, you can start to tap into the many technology providers out there that are built to curate listings for you. For example, Zumbly using advanced algorithms to personalize listings for home buyers based on their preferences. It’s faster, simpler, and cheaper than having a realtor do this instead.

Related: How Long Does It Take To Buy A House?

Now if you’re sold on buying a home without a realtor, then let’s walk you through how this takes place:

Determine your search criteria

As with any house hunting, it all starts with determining where you’d like to live and how much can you afford.

Typically 10% to 20% of the sale price will need to be in down payment. After this the rest you’ll have to take out a mortgage loan.

If you’ll need to take out a mortgage and whether you’ll qualify for the amount. On top of this, factor in all the other incidental costs such as property taxes, commute costs, etc. and see if this is the right property for you to proceed further.

Get pre-approval

All sellers are going to look for a pre-approval when you approach them initially to express interest in their home.

A pre-approval lets them know you have the financial means to purchase their home and you won’t waste their time. A pre-approved loan shows you’re serious. 

To obtain a pre-approval, you’ll have to visit a lender with documents that indicate how much of a loan you can qualify for. This usually involves providing proof of income, bank statements indicating your net worth, and any existing liabilities such as loans or credit balances. 

Based on this, the lender will then give you a pre-approval limit. This is the maximum mortgage amount that you’d qualify for. 

Start the hunting!

With a search criteria and an idea of what you can truly afford, you can use sites such as Zumbly to begin the search process. With advanced algorithms, platforms such as Zumbly superpower the search process and can comb through millions of listings to find the one’s perfect for you. 

Talk to the owner

If you’ve found an attractive property, reach out to the owner directly and ask for more information. If the details sound good, then set up a showing and visit the property. Try to meet the owner in person when you do this so you can start to establish a rapport with them – this can help with negotiations later on.

Related: How To Make An Offer When Buying A House

Get the home valued

One of the roles a realtor commonly plays is in appraising the property you’re interested in. This task can also be carried out without needing one. By getting a property report, you’ll be able to understand how the home you’re interested in compares against other nearby home sales. This report is never 100% accurate as it doesn’t factor in conditions such as remodels or distressed sales – but it can directionally give you an idea of whether you’re getting a good deal. 

Get legal help

You can get away with not needing a realtor, but a legal expert is a must in ensuring all the rules are followed for your given state when it comes to purchasing the property. A lawyer can help you through this for a couple hundred dollars, and can even provide some tips on how to go through negotiating to close.

Put forward an offer

If all the details are sound, you can put forward an offer to the seller. A lawyer would have helped you here to have the necessary forms completed.  By presenting this offer, you would have started any negotiation talk. This negotiation will revolve around the sale price, closing date, and any costs the seller will incur rather than you when closing the property. 

Around this time, it’s also important to hire an inspector to evaluate the entire home and ensure that everything is in tip-top shape. This inspection can also uncover any faults in the home that can help you negotiate the sale price down.

Close the deal

At this point, your lawyer will help with all the final details and steps required in closing the deal and ensuring it meets all legal requirements. You may have to assist in completing any paperwork and managing how payment is carried out with the seller. 

Everything we’ve illustrated above might make this sound like an appealing option but we do also want to cover the drawbacks associated with buying a home without a realtor.

Drawbacks of buying a home with a realtor

Poor negotiation

Not everyone has the skills required for negotiation and many choose to use a realtor solely for this reason. Realtors have gone through many deals and a big part of their success is learning how to negotiate deals in favor of their clients. 

Realtors are also aware of the many disclosure nuances involved in property deals and will have the knowledge to request many of the disclosures related to a property that you may not be privy of. Sellers aren’t obligated to disclose all information about a property unless they are asked to – a realtor comes in handy here.

Related: What Happens When You Break A Lease?

Market expertise

Many realtors specialize in specific areas or markets. This means when evaluating a property, they can provide insight into whether you’re getting a good deal that goes beyond just the sale price. A realtor would know what the realistic commute times or the quality of nearby district schools are. All of this is invaluable when looking to buy a home.

Paperwork help

Realtors also help with the paperwork, which can be overwhelming and confusing. They’ll also be able to reach into their network and help you hire trusted expertise when it comes to home inspections or legal help. Some even have special deals with lenders that can be beneficial when finding favorable mortgage rates.

Buying a home without a realtor isn’t the norm but many are now realizing that as processes get easier, it is a task worth doing if you’re looking to find the best properties on the market at great sale values. 

If you have the time to learn the ropes, then buying a home without a realtor can ensure you’re getting a home best suited to your needs at the best price. Happy house hunting!

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Investment scores, estimated rental values, estimated mortgage costs, and any other financial or other data contained herein cannot be guaranteed as accurate and should not be solely relied upon in making any investment decisions. Users of this information should conduct their own due diligence before making any investment decisions and Zumbly shall not be responsible for any inaccurate information or estimates listed herein.