Do I Need a Realtor to Buy a House?

When you’re ready to make a new home purchase, one of the first things to decide is who you want on your team. A Realtor or real estate agent can be your advocate throughout the process. It’s not required to work with one, but doing so can result in a smoother process and get you into the right home faster. Here’s what a Realtor does, what it costs, and what’s involved if you decide to go it alone instead.

What Is a Realtor?

A real estate professional who has passed the appropriate licensing exams is called a real estate agent. This person works on behalf of the seller or buyer to draw up contracts, arrange inspections, and provide documents to your lender. If they’re a member of the National Association of Realtors and agree to follow its ethical standards, they’re called a Realtor. A real estate broker completes further education and licensing. A real estate agent, Realtor, or broker can all work on your behalf during the home buying process.

Advantages of Working With a Realtor

One of the biggest advantages of working with a Realtor or real estate agent is their extensive knowledge of the local housing market. Tell them what you’re looking for and your budget, and they can immediately start narrowing down neighborhoods, home features, and purchase price. They’re also familiar with the legal aspects of purchase contracts and can help protect you from bad deals, hidden hazards, and dishonest sellers.

Your Realtor will negotiate sales terms on your behalf — purchase price, contingencies that let you walk away without penalty, included repairs or maintenance, and allowances for upgrades. The purchase offer is a legal document, and it helps to have a seasoned professional draft it before it goes to the seller.

What Does a Realtor Cost?

Realtor compensation is typically a percentage of the purchase price, and how it’s structured is negotiated directly between you and your agent before you start working together — ask about it upfront so there are no surprises. It’s a cost worth weighing against the time, expertise, and negotiating leverage a good agent brings to the table.

Buying a House Without an Agent

For seasoned buyers, or newcomers who want to handle it themselves to save on costs, working with a Realtor isn’t required. Here’s a basic overview of what’s involved if you go it alone:

• Get preapproved. Find a lender you like through referrals, then get a preapproval letter. They’ll ask for basic financial documents to determine the loan amount you can expect to be approved for.
• Search for a home. You’ll need to research neighborhoods, home types, and typical purchase prices yourself — through public records, online listing platforms, and time spent in your target neighborhoods.
• Find out about potential homes. Without an agent, you’re responsible for contacting sellers or their agent directly to arrange showings and ask about disclosures. Disclosure requirements (such as for lead paint or water damage) vary by state, so consult a real estate attorney if you’re unsure.
• Make a purchase offer. A purchase offer is a letter to the seller with your proposed price, contingencies, expected closing timeline, and a deadline. If accepted, it’s binding, so make sure it protects your interests.
• Hire a lawyer. If you haven’t worked with one yet, you’ll need a real estate attorney to draw up purchase documents, conduct a title search, obtain title insurance, and record the transfer of ownership — this is required in some states regardless.
• Close on your purchase. Your lender will be involved in this final stage, reviewing your finished paperwork and issuing final loan approval.

Going it alone means more work and more of your own time, but depending on your experience and comfort level, it can also mean real savings.

Finding a Realtor

If you decide you want an agent on your team, start looking through referrals in your area — we can connect you with one of our preferred partners. Coworkers, neighbors, and friends can also share first-hand experience about who they liked (or didn’t) working with. Word-of-mouth referrals from people you trust are one of the best ways to find a good fit.