Updated January 1, 1 . AmFam Team
It takes a lot to purchase a home. With all the time and energy you spend planning, saving and building momentum toward your dreams, you’ve worked hard get where you are. And if you’re thinking about buying a home without a realtor, you’re not alone. According to the National Association of Realtors, For Sale By Owner home purchases made up a full 11 percent of domestic real estate transactions in 2018 in the US.
Whether you’re a first time home-buyer or a seasoned veteran with several home purchases under your belt you probably know that each home purchase is unique and can get complicated. Do you know how to buy a house without a realtor? If you don’t, let's bridge that gap and help you get the job done!
We’ll carefully review what it takes to purchase a home without a real estate agent. And we're going to look at some common pitfalls so you can safely navigate buying a home realtor-free.
If you're still wondering “Do I need a real estate agent to buy a house?" the answer to that will show you how much work a real estate agent actually does. But by breaking down the steps on how to buy a house without an agent, you'll have the details you need to help you go it alone. Look at this quick checklist for buying a house without a realtor:
This first step may prove to be the most critical because your interest rate can have long-lasting financial implications. Be sure to apply for a mortgage with several lenders. Some online mortgage groups will actually help you apply to more than one at the same time. If all goes well, you’ll have a green light on funding with a pre-qualification letter. And you'll also know how much you’re able to spend on your new home.
Look online to find areas that have homes selling in your price range. When you’re shopping for a new home, be sure to consider schools, distances to parks, nearby entertainment options and whether any grocery stores are within walking distance.
Knowing how to buy a house without a realtor is all about thinking outside of the box. Look online for social media posts that list homes and dig into other resources like craigslist.org (Opens in a new tab) or fsbo.com (Opens in a new tab). Be sure to review comparable homes for sale in the area to be sure you’re paying a fair price.
By now, you’ve visited homes for sale and narrowed down your options to the house you want to buy. Your next move is to ask the seller for their list of disclosures. It will include statements on the condition of the home that sellers are legally obligated to reveal prior to selling the property. You’ll get details on whether the seller’s aware of any physical conditions that either pose a health or safety risk on the property.
It’s here where a realtor’s feedback can be key. This is because their experience can help you better understand if a little water in the basement is a small issue or a $25,000 problem you’ll have to fix after buying.
Although hiring an attorney may not be required in your state, it’s a great idea to have someone familiar with the legalities of buying a home without an agent on your side. Look for well-reviewed real estate law firms that charge a flat fee for their services.
Once you’ve received an accepted offer, you’ll need to book a home inspector to check out the property. They’ll help to uncover code violations, safety issues and other concerns that may otherwise go unnoticed.
Work with your real estate lawyer to draft an offer to buy after reviewing the seller’s disclosures. They’ll help you to write up a list of items that need to be addressed before the purchase can go through. Carefully review your offer with recently sold homes in the area to be sure your bid is competitive.
The seller will usually have a limited amount of time to reply to your offer after receiving your bid. Once you and the seller have settled on a price and a plan, you’ll sign an agreement and pay earnest money which goes toward the purchase of the house and acts as a deposit.
Next up, you’ll need to book an appraiser to verify that the home is worth your negotiated purchase price. It’s a step that your mortgage company will require, but you’ll pay out of pocket for it. Find a well-reviewed appraiser that can get the work done soon.
Once your appraisal has come back and validated that the price you’re offering is within reason, the real financing of your mortgage loan will move forward. Underwriters will look carefully at your credit rating, earnings and debt-to-income ratio to verify that you’re able to close and pay the mortgage, taxes and fees on time every month.
After underwriting has cleared you to close, you’ll set a date to meet with a title company and sign on the dotted line. It’s at that point that you’ll pay closing costs, points and fees associated with the purchase of the property. Once that’s done, the house is yours!
Prior to jumping in and purchasing a home without a real estate agent, it’s key to weigh out the pros and cons. From crafting a proper response to your home inspector’s findings to defending your purchase price, there’s a lot to weigh out:
The benefits of home buying without a realtor can result in a lot of money saved, if you play it right. Here are some of the pros of purchasing a home without a realtor:
If you’re not careful, it can be easy to find yourself in trouble during the purchase process if you don’t have a realtor on your side. Let’s review why it may be a problem to purchase a home without a realtor:
If you’re up for purchasing your own home, buying a home without the help of a realtor may be for you. But the reality is there are a lot of variables in home buying. And often, it’s only after you’re through the process that you clearly see if the risk was worth the reward.
Whichever direction you choose, be sure to check in with your American Family Insurance agent (Opens in a new tab) and get a homeowners insurance quote. If you’re financing the purchase, you’ll need great coverage for your big investment. With it, you’ll find the peace of mind you need to focus on the next chapter of your life in your new home.