Your Ultimate Guide to Buying a Home without a Real Estate Agent
You’ve decided it’s time to buy a house! One of the first steps is to pick a real estate agent to work with. But what if you decide that you don’t want to work with a buyer’s agent to buy your home?
Chances are, if you’ve decided that buying a home without an agent is the best choice for you — and you’re reading this — you need some guidance for how to go about the process on your own.
Well, welcome to your step-by-step guide to buying a home without a real estate agent. We’re going to walk you through all of the steps you’ll need to take to act as your own agent — from finding a home, to submitting an offer, to signing the final paperwork.
To really understand what it takes to buy a home without the help of an agent, we talked to Geno D’Angelo, a top agent in Petoskey, Michigan, who shared his insights on striking out on your own. And to cover all our bases, we asked James Rhyne, a real estate attorney in Charleston, South Carolina, for his legal perspective.
We’re going to walk you through everything you need to know to buy a home without a real estate agent.
1. Find a lender you can trust
Finding a lender that is trustworthy and easy to work with is the first step in the homebuying process. Your lender will tell you how much you could be preapproved to borrow based on your credit score, income, liabilities, and assets.
It’s important to shop around with a few different lenders and find the lender that offers the best rates and terms — with the lowest fees. Without a real estate agent, you will need to rely on your own research and reach out to your network for recommendations. Pay attention to online reviews to make sure your potential lender is trustworthy and that former clients have positive things to say about them.
Once you’ve zeroed in on a few different lenders, apply for preapproval or prequalification with each and compare the loans they are offering to see what works best for your situation.
You can check to see how much you could qualify for in just a few minutes with a mortgage loan calculator, but it will take some time to gather all of your information and submit it to a lender when you’re getting a preapproval or underwritten preapproval. Luckily, preapproval can take as little as one business day after you’ve submitted your completed application.
2. Research your ideal neighborhoods
After you’ve gotten your preapproval letter and know how much you could qualify for, it’s time to start doing your research and shopping around.
As you research neighborhoods in your area, pay attention to local amenities such as parks, access to walking trails, neighborhood schools, walkability, restaurants, coffee shops, libraries, and more to determine if you will have all you need to thrive there.
You can do a lot of this research online, and websites like Great Schools, Area Vibes and local websites and guides are a great place to start. However, because you don’t have an agent who can answer specific questions about the neighborhood, it’s important to actually get to know the area and check it out for yourself.
3. Find a home
When you find a neighborhood you love, the next step is finding a home that’s for sale and in your price range. You can set up search parameters on real estate platforms and spend hours combing through photos and property descriptions, but you can also get more proactive.
Spend some time in the neighborhood where you want to live, make friends at a coffee shop or favorite local restaurant, discuss your home search, attend open houses, and even send letters to homeowners asking if they’re willing to sell.
Oftentimes, especially in a seller’s market, finding a home takes more than setting up notifications on your favorite real estate app. Agents have a network that they can tap into to find off-market properties, or pocket listings, and they use these connections to best serve their clients.
You can take a page from their book and leverage your network as well. Tell everyone — literally everyone — that you’re searching for a home. You never know who may have a friend of a friend of an aunt whose cousin is looking to sell their home.
While you’re searching for the perfect neighborhood and ideal home, you can get working on the next step!
4. Hire a real estate attorney
Some states require that a real estate attorney be involved in every home closing while other states allow real estate agents and title companies to handle it. South Carolina, where Rhyne practices, is one of the states that requires a real estate attorney to conduct real estate closings in person. “You cannot conduct a real estate closing legally in South Carolina without an attorney being involved pretty heavily,” he says.
Regardless of whether or not your state requires it, if you’re not working with an agent, hiring a real estate attorney will almost always be in your best interest. A real estate attorney can advise you on the legal aspects of buying a home and review contracts for you.
An attorney, however, will not be involved in negotiations with the seller. Rhyne points out that he only sees transactions from the legal perspective, “I don’t know how agents are drafting contracts and how those negotiations are playing out. All I see is the end result when the contract hits my desk.”
5. Request disclosures from the seller
When you find a home that you want to tour, you’ll request disclosures from the seller. A seller’s disclosure is a list of issues with the home (foundation problems, electrical issues, and so on), remodeling that was completed and the year it was done, and any repairs that have been made.
Basically, anything that a homeowner is aware of that is wrong with the home should be listed on the disclosure. But required disclosures vary from state to state, so you’ll have to do some research or talk with your attorney about what disclosures you should request from the seller or their agent.
Knowing exactly what is wrong with the house will help you in crafting your offer and negotiating any repairs to be made before closing. If you decide that you are not willing to proceed with the sale because of the scope of the problems, then this will be your first chance to walk away.
Depending on your state, the state of the property, or the date the property was built, you may want to request additional disclosures such as a Lead-Based Paint Disclosure for older homes. Sellers are legally required to inform buyers of any known lead-based paint in a home and its location.
6. Tour the homes you are considering
This is where things start to get serious. After you find a home that you love in a neighborhood that meets your criteria, it’s time to set up a home tour. You can connect with the seller’s agent (or the seller if it’s a for sale by owner home) to schedule a time to tour the home.
Some agents can schedule a tour over the phone and others may want to use a scheduling app, so it’s best to contact them first to see which they prefer.
The National Association of Realtors found that in 2021, buyers viewed a median of 8 homes and viewed 3 homes only online. Scheduling home tours can be difficult as you’re working around the seller’s and agent’s schedules as well as your own.
For the tour, you should bring a checklist that encompasses all of the things that you need to pay attention to once you enter the home, such as bedroom count, storage space, and the size of the kitchen. It’s easy to get into a house and get swept up in it’s amazing features or bogged down with the issues that need to be fixed.
A checklist will keep you focused on the attributes that really matter and will help you remember what you liked and what you didn’t when you think back on the house later — you’d be surprised by how much the houses blend together. Take notes or pictures, if you can, so you can keep track of each home that you tour.
7. Make your offer
Ok, at this point you’ve toured some homes and made your decision — it’s time to make an offer. Real estate agents have templates for the offer document that they help buyers submit, ensuring that they have all of the necessary information.
Without an agent, drafting the offer and submitting it to the listing agent falls on your shoulders, and we’re willing to bet you don’t have a blank offer template laying around your house just waiting to be filled out.
An online search will provide you with a number of different offer templates you can download and fill out. Make sure you find one that is state specific as states have different requirements. The template will include your offer price, down payment amount, earnest money deposit, contingencies, and desired closing date.
While a real estate agent won’t tell you exactly what to offer as a purchase price, they would give you some guidance as to the state of the market and what the home might be worth. If you’re buying a house without a real estate agent, you’ll have to do some market research to make sure you understand how much to offer — be careful not to go too low and lose the house or too high and pay way too much.
After your offer is accepted and signed by yourself, the seller, and listing agent, this document becomes the legally binding purchase agreement, so it’s important to read it very carefully and even employ your attorney to review it with you.
Here is what you’ll include in the offer:
Type of real property
You’ll note if the home is a single-family home, condominium, duplex, manufactured home, or some other type of home.
Describe any personal property that you are requesting the seller to include with the purchase of the home. Examples include a hot tub, appliances, or furniture.
Earnest money, also referred to as a “good faith deposit,” is an amount that a buyer agrees to pay the seller to indicate their seriousness about buying the property.
The earnest money deposit will be applied to the purchase price of the home at closing, but if the buyer decides to back out of the sale after all contingencies have been released, the earnest money may not be refunded.
This is where you’ll make your offer on the price of the home along with how you’ll pay it — cash, a mortgage loan, or seller financing.
Without an agent, you will need to do all comparable sales research yourself. You will need to consider what homes in the area are selling for, if the market is especially hot, and how many other offers are being submitted for this particular home before you decide on offering higher or lower than the asking price.
Contingencies allow you to walk away from the purchase in certain circumstances, even after the offer has been accepted. If you want to exclude certain contingencies to make your offer more competitive, you can waive them, but it is not always a good idea.
Common contingencies include:
If issues arise during the home inspection that weren’t disclosed, it could be grounds for canceling the sale without a penalty. In a seller’s market, however, many buyers waive an inspection contingency — 25% according to the April 2022 Realtors® Confidence Index survey.
While this strategy can give your offer an edge, it also opens you up to buying a home with unknown issues that could cost you both time and money down the road. Even if you decide to waive the inspection contingency, you should still have the home inspected so you will know exactly what is wrong with the home and can create a plan.
If you’re applying for a mortgage, your lender will require an appraisal to determine the actual value of the home. Lenders will use the lower of the purchase price or appraised value when determining how much they will lend.
If there’s an appraisal gap, where the appraised value of the home is less than the purchase price, you’ll have to make up the difference in cash or attempt to negotiate a lower price with the seller.
A financing contingency allows you to walk away from the purchase if you’re unable to secure financing.
In hot seller’s markets, making a cash offer (therefore excluding a financing contingency) might incentivize a seller to accept. HomeLight’s Cash Offer allows buyers to make all-cash offers on their dream homes and remain competitive, even if they need financing to purchase a home.
Before you purchase a home, the title company will run a title search to see if there are any outstanding liens or judgments against the property that would prevent the seller from legally selling the home. If there are, you’ll have to wait until the seller resolves the issues or you can walk away.
Home sale contingency
If you own a home, you can include a home sale contingency in your offer that states you have to sell your current home before purchasing this home. If your home doesn’t sell within a specified time frame, the purchase contract can be canceled.
You have to decide whether yourself, the seller, or both parties will be responsible for certain closing costs and if you are requesting a seller credit to cover a portion of them.
Determine the date that you’ll close on the home — make sure it gives you enough time to order a home inspection and appraisal as well as complete a full mortgage application and conduct a title search.
Communicating with your lender will be essential to this step, as you will need to make sure they can fund your loan by the closing date. If your lender lets you know that they will need more than 21 days to underwrite your loan, consider asking for a 30-day or a 45-day close in your offer.
No, you’re not asking the seller to a high school dance, but a real estate love letter could give you an edge when you really want your offer to be accepted. Be careful how you craft your letter because it could include personal information that could lead to housing discrimination, even inadvertently.
While the practice of writing a real estate offer letter is still legal in many areas, the NAR advises against it, so choose wisely. Letters attached to your offer are not always appropriate for every purchase, so exercise caution if you choose to include one.
8. Deposit your earnest money into your escrow account
You’ll need to work with your lender and the escrow officer to deposit your earnest money into your escrow account where it will sit until closing is completed. Depending on what you negotiated in your offer, this could be any between 1% and 3% of the purchase price.
Your lender will typically want to see those funds leaving the bank account that you will be drawing the rest of your down payment from, so be sure to look out for the withdrawal and submit a transaction history to your lender when it becomes available.
9. Choose a title company and order a title search
In some places, choosing a title company will be up to the seller and in others it will be up to the buyer. If it’s your choice, ask your attorney to advise you on a reputable title company or do your own research to find a company that is well known for being reliable and taking privacy seriously.
The title company will conduct a title search on the property to ensure that it’s free from any liens or judgments against it. Depending on how this is negotiated in the contract, either you or the seller will pay for title insurance which protects the buyer and lender from any title issues that may surface after closing.
In addition to searching for any liens or judgments against the property, the title company will look for any missing rightful heirs, deed holders or restrictions, forged signatures, or anything else that would prevent the seller from legally selling the property.
10. Order inspections and appraisal
Now that the offer’s been accepted, it’s time to get out your calendar and schedule inspections. Much of the home is covered under a standard inspection, but if you want to check for radon or pests, you’ll have to order separate inspections. Do your research and find an inspector with a good reputation for being thorough.
It’s a good idea for you to attend the inspection because you’ll be able to ask the inspector questions as they go through the home, and they can give you a good idea of repairs that should be made. Be sure to check your state’s laws, though — some states have different regulations for who can be present for the inspection.
Your lender will schedule an appraisal for the home and send you the appraisal report once the process is completed. If the appraisal comes in lower than your offer, you’ll have to work with your lender to determine if you should come in with more cash to close the gap, or try to dispute the appraisal if you believe it is unfair.
11. Negotiate repairs
Depending on what the inspection turns up, you may have to go back to the seller’s agent to negotiate repairs, a price reduction, or a seller credit for closing costs. Keep in mind that your lender might require that some repairs be made before closing if they are safety or habitability issues.
Different loans have different minimum property requirements. Certain loan types don’t allow chipped paint, termite damage, or a wobbly staircase while others might not require those things to be fixed before closing. If you’re buying a fixer upper or buying a home “as is,” you’ll need to make sure that your lender will approve a loan for a home that needs significant repairs.
When you enter negotiations, you need to know what your non-negotiables are as well as where you’re willing to be flexible. If you want the seller to replace missing hardware and they refuse, is that where you’ll draw the line? If you do decide to walk away over something that wasn’t included in the purchase agreement, you may forfeit your earnest money deposit.
12. Shop for homeowners insurance
You’ll have to pay part or all of your first year’s insurance premium when you close on the home as part of your prepaid costs. If you have homeowners insurance on your current home, you might be able to work with the same company for your new policy.
If this is your first home, you may need to do some research to find the best company for you. Be sure to compare coverages, premium costs, and deductibles as you look at quotes. Without an agent, you can rely on your network of friends and family to get their recommendations, or your lender might be able to recommend a reputable company.
13. Final walkthrough
After all of the inspections, appraisals, and repairs have been completed, it’s time for the final walkthrough. Often, the final walkthrough is scheduled the night before or day of closing to leave as little time as possible for the condition of the home to change.
Use this time to make sure agreed-upon repairs have been completed and the condition of the home is satisfactory. If anything hasn’t been completed or if there are damages left behind after the sellers move out, bring it to the listing agent’s attention immediately and discuss how to move forward.
14. Close on the property
At closing, you’ll sit down with the title company and your lawyer and sign the final documents with a notary.
The escrow company will have a final closing statement prepared which will detail the exact amount you will need to close, and you’ll send your down payment and closing costs to escrow via cashier’s check or wire transfer. Your lender will review the signed documents and send the loan amount to escrow as well.
And now for the moment we’ve all been waiting for: You own a home! *cheers*
Reasons why someone might buy a home without an agent
Despite the amount of work it takes to buy a home without a real estate agent on your side, some people choose to do it for a variety of reasons:
- You know the seller and trust that you can negotiate terms with them
- You are close to a real estate agent who may be willing to advise you without asking for a commission
- You’re a real estate investor who isn’t planning on living in the home and is comfortable with the process and higher level of risk
When asked if someone could buy a home without an agent, Rhyne says “you don’t need an agent to buy a home, legally. For a lot of practical reasons you absolutely do, but from a legal standpoint, it’s not a requirement.”
Even though it’s not a legal requirement, Rhyne says that it’s not advisable and it will be a more difficult process without an agent on your side.
You need an agent who knows the pulse of the market. An agent who knows about off-market listings…an agent that will guide you every step of the way and is available at any time to answer questions that you may have, no matter how big or small.
Reasons you should NOT consider buying a home without an agent
Here’s the bottom line: Buying a home takes a lot of time and energy. Buying a home without a real estate agent takes even more time and energy. According to the National Association of Realtors, house-hunting typically takes around eight weeks.
D’Angelo says that “by the time you do all the coordinating and contracts and scheduling and finding the vendors and interviewing the vendors and figuring out who you’re going to use for each step of the way, that time adds up.”
Real estate agents also have a deep network of connections with vendors and lenders who can help you through the process. In Rhyne’s interactions with agents, he’s found that “An agent’s going to help you stay on task…They’re professionals. That’s what they do. They’re really good at helping people get their stuff together. It comes with the territory, and it’s things you wouldn’t necessarily think about.”
Also, the seller typically pays the agent’s commission, so according to D’Angelo, “It’s sort of silly to not use a buyer’s agent when it doesn’t cost you anything, versus taking on a part-time job in a field that you’re not terribly familiar with.”
D’Angelo really sums it up: “You need an agent who knows the pulse of the market. An agent who knows about off-market listings…an agent that will guide you every step of the way and is available at any time to answer questions that you may have, no matter how big or small.”
Header Image Source: (Paul Kansonkho / Unsplash)