Buy a House without a Realtor
If you are looking to buy a home, but would like to avoid working with a real estate agent, you may handle the home-buying process yourself. Follow these steps to buy a house without a realtor.
Steps
- Obtain a mortgage pre-approval. Unless you are paying full cash to buy a house, you will need to secure financing before you go house shopping. A mortgage pre-approval will specify exactly how much of a loan you qualify for (and, therefore, how much of a house you can afford to buy), and is a very useful tool when it comes time to negotiate with a seller.
- Find houses for sale. When you work with a realtor, it is that realtor's job to find properties that you may be interested in. Therefore, when you forego using a realtor to buy a home, it is your responsibility to find houses for sale. Try the following sources:
- Real estate magazines are full of homes for sale; however, it is important that you only consider for sale by owner (FSBO) listings if you want to purchase a house without a realtor's inclusion.
- Online classifieds sites like Craigslist offer a variety of FSBO homes for sale, making it possible to go house shopping from the comfort of your own home.
- Local newspapers may list houses for sale in both the classifieds and real estate sections.
- Drive through neighborhoods where you would like to buy a home, and look for FSBO signs, which will have the sellers' numbers listed directly on them.
- Real estate websites like Homes.com and Trulia.com maintain a database of homes for sale, where you can perform searches based on parameters that you set regarding location, price range and layout.
- Contact the homeowners of the homes you are interested in. Ask whatever questions you want to regarding the house for sale, then schedule a viewing.
- Determine if the house is worth what the sellers are asking. Once you decide that you are interested in making an offer on a property, you need to decide how much to offer for the home. There are ways of evaluating a home's value without the help of a realtor:
- Hire an appraiser to evaluate the property. For a fee, an appraiser will perform a thorough assessment of the home, as well as provide you with the documentation that your mortgage lender will require before you can purchase a house.
- Internet home value tools allow to you input the home's specifics in order to get an estimate of what the home is worth. An online search will return a number of free home value calculators you can use in your decision of whether or not to buy a home.
- A comparative market analysis (CMA) takes the structure of the home, the property the home is on and neighborhood comparables into account in order to provide an accurate figure of what a home is worth in the current market. Obtain free, do-it-yourself CMAs on websites like RedFin.com.
- Choose a real estate attorney. Once you have chosen the house you want to make an offer on, and ultimately purchase, it is time to find a professional who can draft the necessary legal documents.
- Make an offer. Have your real estate attorney draw up an offer to buy a house, then present your offer to the sellers. Negotiate the offer as necessary, until you and the seller reach acceptable terms.
- Draw up a sales contract. Your real estate attorney will draw up the sales contract for you, which both you and the seller will sign.
- Submit the sales contract to the mortgage lender. The lender will then process your mortgage and schedule your closing.
Warnings
- Many people opt to buy a house without a realtor because they want to avoid paying a commission. Be aware that it is not true that you have to pay a commission to use a realtor for the home-buying process. Realtors get paid by the sellers, out of proceeds from the sale. Sellers often price this fee (typically 6%, split between the realtors) into the asking price for a home. Removing one (or both) realtors is a useful negotiating tool when buying a house.
- Statistically, houses on the by-owner market are generally priced at, or above, what realtors would list them for. Therefore, you may not be getting the best deal when you purchase a house without the aid of a realtor.
