How To Buy a House Without a Realtor

Recently, I had the opportunity to sell and buy a new home without an agent, and I learned that you really need to do your homework when you choose to go this route. It's not as easy as you may think -- especially in the current low-inventory real estate environment -- but in my opinion, it's worth the effort to get the 6% savings as a seller. I highly recommend working with your title company and other experts to ensure you have everything you need to make the process as seamless as possible. Or, if you don't want to do it completely on your own, you can try buying or selling through one of the innovative real estate companies that are using the power of the internet to eliminate the middleman.

Find out which companies can help you with selling or buying a home without an agent, and get real estate tips from people like me who have gone through the process on their own.

Find Out: How the Real Estate Market Was Impacted in These 25 Places Hit Hard by COVID-19

1. Opendoor

Both buyers and sellers can work without an agent thanks to Opendoor, a company that simplifies the process of buying, selling or trading in a home.

As a seller, you sell your home directly to Opendoor, which eliminates the need to organize showings or the possibility of your home sitting on the market for months. Simply request an offer, and Opendoor experts will assess your home and market data to come up with one. Then, you'll review the offer and associated fees, and sign the contract if you agree to the terms. Once an agreement is reached, a home assessor will come to your house to determine any repairs needed and take care of them post-closing -- repair costs are later deducted from the sale proceeds. You'll get paid in a matter of days, and Opendoor will take care of the actual sale of the property.

For buyers, the process is also easy. Browse Opendoor's home listings, and visit them on your own schedule. Once you've found your dream home, Opendoor will guide you through the offer process -- no outside agent needed.

Learn More: Real Estate Agents Reveal Their Secrets To Get Your Home Off the Market Fast

2. Redfin Direct

Redfin Direct allows you to make direct offers on a home without using an agent. Your offer might be more appealing to the seller than competing offers made with agents because it saves them thousands in fees -- giving your offer a competitive edge.

To buy a home via Redfin Direct, browse Redfin listings and call to book a tour on your own schedule. When you find a home that you love, use Redfin Direct's online tool, which walks you through the step-by-step process of making an offer. Then, you'll work directly with the seller's agent to negotiate a price and agree on terms. When the offer is accepted, you'll coordinate with your mortgage lender and escrow company to finalize the deal, sign all the necessary paperwork and close on the home.

Find Out: What Homes Will Be Worth in Your State by the End of 2021

3. ShowPal

ShowPal is another company that allows you to buy and sell homes without the use of an agent. Chad Torstenson, the company's founder and CEO, started the company after experiencing the sale of his home.

"The commission check to the listing agent and buyer’s agent totaled about $30,000," Torstenson said. "I thought about how long it took to build up to $30,000 worth of equity in the home, and it took me 3 1/2 years -- I had gone to work every day for 3 1/2 years to pay off a process that took 60 days. It was a moment that just hurt. That’s a lot of money. For most Americans, 70% of the wealth that they obtain in their life comes from their home, and these commission costs [are taking a big piece of that]. Technology has the ability to make things cheaper for the consumer, and yet real estate commission costs have stayed fairly stagnant. We thought, what can we do to become a force in the market [and change that]?"

ShowPal offers several for-sale-by-owner plans, including a free plan that allows you to list on ShowPal, schedule showings, verify buyer IDs, and negotiate and accept offers. The basic plan costs $299 and includes photo enhancing; listings on ShowPal, Zillow and Trulia; a yard sign; and more. To sell your home with ShowPal, create an account, add property details, and receive an independent valuation and market analysis. Next, you'll get listing and marketing services, a yard sign and a lockbox. You'll receive offers through the online platform, and you'll also get purchase agreement and closing assistance to finalize the sale.

To buy a home through ShowPal, browse the site's listings for homes that you're interested in, schedule showings online and get questions about the property answered live during your tour via ShowPal Property IQ. When you're ready to make an offer, submit one through ShowPal or directly to the seller. Once an offer is accepted, you'll get assistance from an attorney with the purchase agreement and closing. The attorney is paid for by the seller, so it comes at no cost to you.

Read: Buying a Home in 2021? Here’s What You Need To Know

4. Zillow Offers

You can sell your home without an agent by going through Zillow Offers. It works the same way as Opendoor -- you sell your home directly to Zillow rather than to a buyer, which removes some hassle from the selling process. To get an offer, answer a few questions and send photos of your house to Zillow. If your home is eligible, Zillow will make a cash offer. If you accept the offer, you'll be able to pick a closing date that works for you. Zillow will then arrange a home evaluation and give you a cash payment for your home.

Find Out: 40 Cities That Could Be Poised For a Housing Crisis

Tips From People Who Have Bought/Sold Homes Without an Agent

No matter which method you choose to buy or sell your home, it's important to be fully prepared. I spoke to real estate experts, as well as people like me who have been through the process without an agent, to get their best advice. Keep reading to see what they had to say.

Did You Know: What a $1M Home Looks Like Across America

Get Preapproved for a Loan First

"Find a good mortgage broker or bank and get preapproved for whatever amount you plan to spend on a house," said Andrew, a real estate investor and founder of the financial blog Wealthy Nickel. "Often a realtor has good contacts and will guide you through the process, but you can do it yourself. Presenting an offer with a preapproval letter is generally considered a much stronger offer."

Plus, your mortgage lender can be a wealth of information about the buying process, said Jaime Gibbs of Bubbling Brook Budgets.

"They often have professionals they can recommend as you walk through this process," she said. "Don’t be afraid to ask!"

Be Prepared: 5 Signs You’re About To Overpay on That House You Want

Get Creative With House Hunting

"When homeowners are selling their home on their own, they often use alternative ways of getting the word out," Gibbs said. "Look at 'for sale by owner' websites, and browse Zillow and Craigslist. That’s how we found our current home -- on Craigslist -- and we love it!"

Related: Why Now Is an Ideal Time To Consider Buying a Home

Pay Attention During the Home Inspection

When you're buying a home, understanding the cost of repairs is essential when negotiating the final closing price.

"Do your homework for inspections and negotiations," Andrew said. "You'll need to find a good home inspector and have him walk you through the inspection process to get a realistic picture of what is and isn't a big deal when you go to negotiate for repairs."

It's also important to choose a home inspector you can trust. "We learned to not use the list [of inspectors] that the seller's agent recommended," said Allan Liwanag of The Practical Saver, who helped his sister buy a home without a real estate agent. "This was to avoid any potential bias. We asked around for recommendations from friends, and [used] aggregator sites like HomeAdvisor.com."

Looking Ahead: What Will the Housing Market Look Like Now That Biden’s President?

Be Ready To Negotiate

You should always try to negotiate the seller's price, Liwanag said.

"Learn the prices of the houses [in the area] that were purchased within a couple of months. This will give you a basis for how much the house should be priced given the features of the house," he said.

Did You Know: Craziest Things That Kill Your Home’s Value

Request a Discount

"Make sure in the contract to specify that you are representing yourself, and ask for a discount since there is no buyer's agent involved," Andrew said. "Many times when a homeowner signs a listing agreement with an agent, they agree to pay 6%, and the listing agent will split that with the buyer's agent. If you represent yourself, make sure the listing agent isn't going to pocket the whole 6%. If you're doing all the work on the buyer's side, you shouldn't have to pay the same price as someone who is paying a buyer's agent."

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Ask the Seller For a Home Warranty

"Even with a passed home inspection, some things can be missed that can cause you a lot of money in the long run," Liwanag said. "Make sure you ask the seller for a home warranty to protect yourself from spending money when something in your house goes wrong."

Be Prepared: Tips for Negotiating Repairs After a Home Inspection

Have an Offer-To-Purchase Form Handy

"You can find [offer-to-purchase forms] online or in your local office supply store," Gibbs said. "That way, you can make an official offer and present it to the homeowner(s). Once they accept, it’s binding, and both parties can move forward from there."

Read: 17 Dumb Home-Buying Mistakes That Hurt Your Wallet

Get Help From a Real Estate Attorney or Title Company

"If you won't be using a realtor to buy a home, make sure you find a good real estate attorney or title company that can help you understand the basic real estate contract terms and what is customary in your area," Andrew said. "For example, in my area, it is typical for the seller to pay for title insurance, the cost of a home warranty and various other things. If you're not aware of this, you could be leaving money on the table."

Hiring a real estate attorney is an especially good idea if you're the buyer, Liwanag said. "Because buying or owning a house involves a ton of legal paperwork, it's best to let an attorney deal with reviewing the documents," he said. "My sister paid less than $400 for the attorney fee."

In most cases, that's significantly cheaper than what you would end up paying an agent.

Find Out: The 20 Hardest Places To Sell a Home

Know When To Walk Away From a Deal

As a buyer or seller, it can be tempting to accept the first price or the first offer, especially when you're doing it on your own. But you should set expectations and stick to them, Liwanag said.

"You need to set your budget and need to learn how to walk away when the price isn't right," he said.

Read: Houses in These Cities Are Suddenly Major Bargains

Know When Hiring a Realtor Might Be Worth the Money

Although it's tempting to cut out the middleman for the cost savings, sometimes hiring a realtor is worth the money -- especially if you are a first-time homebuyer.

"Buying a home can be incredibly daunting, especially for first-time buyers, because there's so much regulation around the process," said Sean Harper, co-founder and CEO of Kin Insurance, a home insurance technology company. "Without an expert for guidance, many folks might not know where to start with getting pre-approval for a mortgage, what federally-backed mortgages they're eligible for, what tax breaks they may be entitled to, how to make an offer on a house, what deal breakers to watch out for during inspections, or what closing costs to anticipate. They might not realize that some features that seem attractive at first, like a pool in the backyard or an ocean-front view, can really drive up insurance rates. And home insurance is required if you have a mortgage."

So although you might be saving money in the short-term by not using a realtor, not fully understanding the factors that will affect your long-term expenses can end up costing you more in the end.

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Gabrielle Olya contributed to the reporting for this article.

About the Author

Jaime Catmull

With eight years of experience working in the personal finance space at GOBankingRates, Jaime Catmull has amassed an extensive network of financial influencers and experts. Now, she’s tapping that network to get the real scoop on how you can live your best financial life and increase your wealth.

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