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Buying A Home Without A Real Estate Agent

Melody Johnson5-Minute Read
March 23, 2020

With so much information available online, it might seem like buying a house without a real estate agent is a straightforward process. But there are many important facts you want to consider before you dive into buying a home without professional support.

How To Buy A House Without A Real Estate Agent

Buying a house is one of the biggest financial decisions most people make in their lifetime, so it's understandable why real estate agents have a hand in a majority of transactions. Although a small percentage of people decide to buy a house without a real estate agent, it might not be the best choice for most home buyers. But there's no federal requirement that mandates agents be involved in the home buying process. You can buy a home without a real estate agent by reviewing available home listings online, attending open houses, and communicating with the listing agent or seller if they don't have an agent.

Get Preapproved For A Mortgage

One of the first steps of buying a house without an agent is to get preapproved for a mortgage. Getting a preapproval letter is one of the best ways to show listing agents and sellers that your offer should be taken seriously. Before you start applying for a mortgage, it's a good idea to look over your budget to see what you can afford in terms of your monthly payments. Then, using Rocket Mortgage®, all you need to do is answer a few questions about your monthly income, any savings set aside for a down payment, and the type of home you'd like to purchase. Once you get in touch with one of our licensed mortgage experts, they'll be able to guide you through the process.

View A Home

Finding the perfect home can take time, but with the right information, you'll be off to a great start. You'll need to compile a list of your favorite homes that meet your wish list and fit within your budget. After you decide on a winner, review the listing details, and schedule an appointment to tour the home or attend an open house. A majority of times, you'll deal with the listing agent representing the seller. It's essential that you clearly explain that you don’t have a real estate agent representing you in the process. Since the listing agent's primary priority is to help the seller, you'll want to have any documentation from the listing agent reviewed by a real estate lawyer. One significant benefit of working directly with a real estate agent is their experience communicating with the seller and listing agent. Agents can also point out red flags or give insights about a neighborhood and any recent sales of similar homes.

Place An Offer

Once you've found the perfect place to call home, it's time to submit your offer. To place a bid, you'll need to write up a complete offer letter. Sometimes your offer is one of many, so you'll want to put your best foot forward. Most real estate agents use a standard template, which could put you at a disadvantage if you’re working alone and aren't exactly sure what to provide. Here is a list of typical information included in a home purchase offer:

  • The home buyer's full name(s)
  • The property address
  • The asking price
  • Contingencies that must be met (appraisal, home inspection, etc.)
  • Seller's concessions (optional)
  • A copy of the preapproval letter
  • The earnest money deposit amount

Purchase Agreement Without An Agent

If accepted, your offer letter becomes a contract or purchase agreement. Sometimes your ideal home will have some blemishes. It's important to order a home inspection to determine if there are any significant repairs and write contingencies into the purchase agreement. Without an agent, you may find it difficult to negotiate these contingencies or request more seller credits. Contingencies help to protect you if you decide to walk away from the transaction. It's common for these documents to be revised multiple times to reflect any updates. Based on your agreement, you'll provide the title company or listing agent with your earnest money deposit. This amount can range from 1 – 5% of the purchase price. A purchase agreement may also add more details to the original offer, such as:

  • Preferred closing date
  • Changes to purchase price (if applicable)
  • Changes to seller's concessions (if applicable)
  • Changes to home repair requests
  • Name of the title company
  • Owner's title policy information
  • Any seller's disclosures

How To Buy For Sale By Owner Home

Not every seller will choose to work with a real estate agent. One of the most frequent reasons that sellers decide to go it alone is that they want to avoid paying an agent’s commission. At times, buying a for sale by owner home can work in your favor, especially if the seller undervalues their purchase price. But if neither party has an agent, you'll have to navigate through a large amount of paperwork, including seller's disclosures, on your own. Seller's disclosures are a way to notify the buyer of information about the home, such as lead-based paint, radon, asbestos, termite infestations and mold. Not all of these documents are required, so you may not know if the seller is entirely forthright. If the appraisal and title check out, all that's left is for your mortgage lender to give you a thumbs up that you're ready to close!

Closing Costs: For Sale By Owner

Closing costs still apply to a for sale by owner property. These costs will vary, but you can expect an average of 2 – 4% of the purchase price. Sometimes, a buyer will negotiate a percentage of these fees to be paid by the seller as a credit or concession. Yet, not all transactions are the same. In some cases, a seller may not contribute to closing costs at all, and the buyer will need to cover it entirely. A major benefit of using a real estate agent is having an experienced negotiator on your side, which could save you thousands in the long run.

The Bottom Line

If you're unsure if you can purchase a home without a real estate agent, the short answer is yes. In some instances, working without a real estate agent makes sense for experienced home buyers or for those who hire a trusted real estate attorney. And there are rare cases when the seller wants to avoid representation entirely. Yet, new home buyers must take special precautions against the risks of buying a home. Some benefits of working with an agent include having a trusted partner to negotiate contingencies and concessions that work in your favor. Agents often have a better understanding of the complicated jargon used in documents and can explain them in easy-to-understand terms. Very experienced real estate professionals have contacts like real estate lawyers and title companies that can help you. In short, buying a home is a major investment, but worthwhile with the right amount of support.

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    Melody Johnson

    The Rocket Homes blog is here to bring you all you need to know about buying, selling and making the most of your home. Whether you’re thinking about becoming a homeowner, selling your current home or looking to keep your place in tip-top shape, our writers and freelancers bring their experience and expertise to meet you right where you are.