If you want to buy a house without a realtor, you should be ready to house hunt, make an offer, negotiate, schedule inspections, and represent yourself during closing.
In most cases, having a real estate agent is helpful. Agents are experienced professionals with vast networks of industry contacts and knowledge of the local market. And the seller usually pays the agent’s commission, so it won’t cost you to use a realtor.
But if you have a lot of experience buying and selling homes or if you have other special circumstances, buying a house without a realtor might be a great option.
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How to Buy a House Without a Realtor
- Decide on a budget
- Get mortgage pre-approval
- Set search criteria
- Search for homes
- Go to open houses and showings
- Make an offer and negotiate
- Complete appraisals and inspections
- Close on the house
Decide on a Budget
Figuring out your budget can help narrow down your search to houses you can afford.
For context, the average sale price for a house in the U.S. in 2022 was $535,800, according to the Federal Reserve Bank of St. Louis.
Your debt-to-income (DTI) ratio is one way to figure out how much house you can afford. This ratio should tell you how much of your income should go to a mortgage loan.
To calculate your DTI ratio, divide your monthly debt by your monthly income, then multiply it by 100 so it’s a percentage. For example, if you’ve got $1,000 in debts and $5,000 in income, your DTI ratio is 20%.
Debt / income x 100 = DTI ratio percentage
$1,000 / $5,000 = 0.2
0.2 x 100 = 20%
The 28/36 Rule
Once you know your DTI ratio, you can use the 28/36 rule to see how much you can afford to spend on a house. The rule states that you should avoid spending more than 28% of your monthly gross income on housing costs. These costs include mortgage loans, property taxes, utilities, maintenance, HOA fees, etc. The rule also says that your total debt shouldn’t exceed 36% of your income.
The 28/36 rule can be useful, but some experts consider it to be outdated in the current economy and housing climate. The average housing prices in the US have risen much more than the average national income. So you might want to treat the 28/36 rule as a guideline rather than a law.
» More: How to Budget for a House
Get Mortgage Preapproval
Getting a lender’s preapproval for a mortgage tells a seller that you are serious about buying a home. The process can also let you know where you stand with lenders and the mortgage loan amount you might be able to get.
During a mortgage preapproval, the lender will request a lot of documentation and information about your finances. You’ll have to submit details about your income, debt, and savings.
The process also requires a hard credit check. If you’re not planning on making an offer on a house within three months, hold off on getting a preapproval because it could damage your FICO score.
If you meet the requirements for preapproval, a lender will extend a financing offer, along with the likely interest rate. The mortgage approval isn’t a guarantee that you will be approved or that the offer and rate will be accurate, but it can give you an idea of how much the loan will be.
Set Search Criteria
Before you start looking for a house, make a list of the features you want in a home. Think about the number of bedrooms and bathrooms you want. Do you want a specific layout or type of house? Divide the list between features you absolutely need and features it would be nice to have.
Also think about the neighborhood. What matters most to you? The quality of the schools? Amenities like public pools, libraries, and parks? Crime level?
Once you know what you want, you can use that information to filter out houses and keep you from wasting time.
Search for Homes
There are plenty of online platforms designed to help you find a house. Zillow and Realtor.com can be great places to find houses without a realtor. You can also use sites like this to estimate how much a house is worth compared to the asking price.
Go to Open Houses and Showings
Open houses and showings give you a chance to see if you like the house and assess its condition.
Open houses can be a great way of getting your foot in the door, seeing the house for yourself, and meeting the seller or their agent. You won’t have an agent to let you know about open houses, but most open houses are advertised on listing sites like Zillow.
If you choose to buy a house without a realtor, you’ll be in charge of coordinating showings with the listing agent for houses that spark your interest.
If you like the house, request a seller’s disclosure. This is a legal document required in most states that requires a seller to disclose any known major issues with the house.
Make an Offer and Negotiate
When you’ve found the house you want, it’s time to make an offer. You won’t have an agent to guide you through this process, so be prepared to negotiate yourself.
How Much to Offer
A lot of real estate sites have home value estimators that let you plug in information about the home and give you an idea of what the home is worth. These are only estimates, so you shouldn’t base your offer entirely on them. But they can be a great place to start.
You can also use sites like Zillow to look at real estate trends in the area. Use the search filters to find comparable properties in the area that have recently been sold. Gather data about how much they were listed for, how much they were sold for, and how long they were on the market. This information will give you a sense of how much you should offer.
Negotiation Without a Realtor
If you catch the seller’s attention, they may come back with a counteroffer. Gather your research and be ready to negotiate. In a white-hot real estate market, you might need to be the one to sweeten the bid, either by foregoing contingencies or increasing your offer.
If you’re not familiar with negotiation, we highly recommend working with a buyer’s agent. Agents can tell you if you’re underbidding or overbidding, which could make or break the deal.
Try Clever’s free agent matching service today!
Complete Appraisals and Inspections
Once the seller accepts the offer, you’ll need to bring in some experts to meet all the legal requirements.
Lenders will typically request a home appraisal to ensure the house is worth the loan they are giving you.
If the house is listed for higher than the amount in the appraisal, the lender might limit or withdraw the loan. You might have to negotiate with the seller to lower the listing price so the deal doesn’t go up in smoke.
Hire a home inspector to check the property for any major issues in the plumbing, HVAC, electricity, roofing, or foundation. You can also add on specific inspections if you have concerns about things like mold or flooding. If an inspection uncovers serious issues, you can negotiate further with the seller or back out of the sale.
Close on the House
Closing on a house involves a lot of paperwork. Even if you would prefer to not have an agent, you might have to bring in an attorney or transaction coordinator to legalize the closing, depending on the state.
Get the official green light from your mortgage lender and secure the funding. Be prepared to wait for up to a few weeks, depending on the lender.
Should I Buy a House Without a Realtor?
It’s generally a good idea to use a realtor even though you’re not required to. Buying a house gets complicated, and it’s typically best to leave it to the professionals that have the network and the local market knowledge.
Agents help with house hunting, making an offer, negotiating, and filling out all the paperwork during closing.
Buying a home is one of the biggest financial transactions most people will ever make in their lifetime. Mistakes could cost you a lot. And using a real estate agent most likely won’t cost you anything, since sellers usually pay the buyer’s agent commission.
But there are certain circumstances in which it might make sense to buy a house without a realtor, like if you’re
- Buying when you have extensive home buying experience
- Buying a new construction home
- Buying a house from someone you know
- Buying a house for sale by owner (FSBO), since the seller may refuse to pay buyer agent commission