A Realtor can be a key teammate who helps you achieve your homeownership goals. But with so many homebuying resources available online, some buyers may decide they don’t need a Realtor to help them.
It’s true that you can browse listings and get mortgage preapproval virtually, but is it really a good idea to handle such a big purchase without the guidance of an experienced professional? Here’s a closer look at the pros and cons of buying a home without a Realtor to help you decide whether it’s right for you.
What Does a Realtor Do?
A Realtor helps people navigate the homebuying process. Realtors are especially handy when it comes to the following:
- Experience. You can rely on a Realtor to advise you as you make important decisions — especially if they specialize in the area. Realtors have a median of eight years of relevant experience.
- Negotiation. A Realtor can help you negotiate the best deal. They can also determine if you’re getting a fair deal and detect any unreasonable seller demands.
- Paperwork. Buying a home involves a considerable amount of paperwork, some of which containing legal jargon you might not be familiar with. A Realtor can help break down all the paperwork in a way that is more manageable for you.
- Objectivity. Buying a home is a major commitment, and there might be times when you’re unsure if you’re making the right call. A Realtor can give you a third-party opinion while working in your best interest.
Realtor vs. real estate agent
A real estate agent is a licensed professional who works on the behalf of a real estate broker. In order to get a real estate license, they have to undergo training and pass an exam that covers both federal and state laws.
A Realtor is a real estate agent who belongs to the National Association of Realtors. NAR has a code of ethics to ensure all Realtors are acting on the behalf of their clients. The difference between a real estate agent and Realtor comes down to certifications.
Will buying a home without a Realtor save money?
The buyer typically doesn’t pay out of pocket to cover their real estate agent’s commission. Instead, the seller’s agent and the buyer’s agent split a 6% commission that is usually paid for by the seller. So, you’re not directly cutting costs by buying a home without a Realtor.
However, since you’ll be saving the seller money, you can try to negotiate with them to lower the sales price of the home.
Pros of Buying a Home Without a Realtor
Buying a home without a Realtor can come with certain advantages. Here’s a look at some of the perks of not hiring a Realtor.
You may get the seller to lower their price
In many cases, it’s the seller who pays the commission for their real estate agent and the buyer’s agent. Both agents typically split a commission rate of 6% of the purchase price of the home. So, if you don’t hire a real estate agent, you’re saving the seller money. As a result, they may be willing to accept a lower price.
More control over the process
You may enjoy having full control over the process instead of passing off some of the work to a Realtor. If you have an existing relationship with the seller, then you may prefer communicating with them directly.
Availability of online resources
These days, the internet makes it easy to browse home listings and access resources to educate yourself on the homebuying process. You can also research lenders and get preapproved for a home loan online. There are even templates to help you draft an offer letter — though it’s advisable to do that with a lawyer.
Cons of Buying a Home Without a Realtor
Buying a home without hiring a Realtor also comes with some risks and drawbacks. Here are some of the downsides of buying a home without a Realtor.
You could leave money on the table
Not hiring a Realtor can be like representing yourself in court — it’s possible, but it could cost you. A Realtor’s job is to get their client the best deal possible, which can involve some shrewd negotiation. Even if you’re fairly confident with your real estate knowledge and negotiation skills, a Realtor’s experience and knowledge of the market can go the extra distance to save you money.
The homebuying process is time-consuming
Buying a home is a lot of work, even when you have a Realtor. It’s also time-consuming, as the closing process alone takes 30 to 60 days. If you do it alone, you’ll have to handle all the research and paperwork on your own. Plus, if you’re working full time, you might not have the bandwidth to take on the additional responsibilities of buying a home.
You won’t have expert guidance
One of the most valuable things that a Realtor offers is their advice. A good Realtor can steer you away from homes riddled with problems beneath the surface, or confirm that you’re getting a great deal on a home. A Realtor can also tap into their network to recommend trusted appraisers, inspectors, and other professionals for important tasks.
Unfamiliarity with the market and process
If it’s your first time buying a home, you won’t fully understand what the homebuying process is really like. A Realtor is not only trained but also lives the market as their livelihood. Plus, if you’re moving to a neighborhood that you haven’t previously lived in, you likely won’t be as knowledgeable about that local market as someone who has been working there for years.
When Does Buying a Home Without a Realtor Make Sense?
Despite the downsides to buying a home without a Realtor, here are some cases where it could make sense:
- The seller is a good friend or family member. If you have a close relationship with the seller, then you may be able to negotiate with them directly.
- You’re a real estate agent. If you’re a licensed agent yourself, then you have the training and knowledge to do the job.
- You have a friend or family in the business. If someone in your life is a licensed real estate agent and is willing to advise you for free, then you may not need to hire a Realtor.
- You’ve bought several homes before. If you’re an experienced homebuyer, then you may not need a Realtor’s help. Just keep in mind that real estate laws change frequently, so you’ll need to stay up to date.
- You’ve made an agreement with the seller to not use a Realtor. Some buyers make deals with sellers to keep agents out of the deal. However, you’re taking on more risk by doing it alone.
Should You Buy a Home Without a Realtor?
The question of whether to hire a Realtor ultimately comes down to your knowledge and experience.
“Anyone can buy a home without a Realtor,” says Ryan David, a real estate agent, investor, and owner of We Buy Houses In Pennsylvania. “Prior to obtaining my state license, I bought and sold my personal residence myself.”
However, David says that first-time homebuyers might quickly become overwhelmed without the help of a Realtor.
“For this reason, I firmly believe the first-time homebuyer should have a licensed real estate agent to take them by the hand and guide them every step of the way,” he says. “I was once a first-time homebuyer and learned valuable information from my Realtor.”
According to David, seasoned homebuyers who know what to expect may be able to handle the process without a Realtor.
“Agents do serve an important role in the homebuying process, but they work best helping newer homeowners who have never made a purchase before,” he says. “The buyer can get a better deal from the seller at times when bypassing an agent because the seller knows they are not paying the standard 6% Realtor commission.”
Here are the answers to some frequently asked questions about buying a home without a Realtor.