Do You Have to Use a Realtor to Buy a House?

The journey to homeownership is a significant financial endeavor, often perceived as requiring the guidance of a real estate agent. While many buyers choose to work with an agent, it is not a legal prerequisite for purchasing a home in the United States. The home buying process involves numerous interconnected steps, from securing financing to navigating legal documentation, and understanding these stages is important whether or not professional representation is sought.

The Role of a Buyer’s Real Estate Agent

A buyer’s real estate agent is a licensed professional who acts as an advocate for the buyer. These agents are legally obligated to protect their client’s best interests, operating under fiduciary duties. They provide expert advice, helping clients identify their priorities and find suitable properties within their budget and preferences.

Agents typically assist with market analysis, scheduling property showings, and insights into potential issues or red flags during property visits. Once a suitable home is found, they help prepare and submit offers, negotiating terms with the seller or their agent. They also manage all necessary documentation and ensure legal compliance throughout the transaction.

Traditionally, the buyer’s agent’s compensation has been part of the total real estate commission. This fee was historically paid by the seller from the listing agent’s commission at closing. However, recent industry changes indicate that buyers may increasingly be responsible for directly compensating their own agents.

Buying a Home Without a Buyer’s Agent

Purchasing a home without a buyer’s agent is legally permissible, but it shifts significant responsibilities onto the buyer. This includes researching and finding properties, as access to Multiple Listing Service (MLS) databases is restricted to licensed agents.

Buyers might find properties through public online platforms like Zillow or Trulia, or by directly seeking out “For Sale By Owner” (FSBO) listings, which accounted for approximately 7% of home sales in 2023. Once a property is identified, the buyer must engage directly with the seller or their agent. This requires the buyer to conduct their own market research to determine a fair offer price, often by analyzing comparable sales in the area.

The buyer is then tasked with preparing and submitting the offer letter, which must include the proposed price, any contingencies (such as inspection or financing), the earnest money deposit amount, financing details, and a proposed closing date. Direct negotiation with the seller or their agent follows, requiring the buyer to possess strong negotiation skills and a thorough understanding of real estate contracts. Due to the complexity of these transactions, it is advisable to hire a real estate attorney to review all purchase agreements and other documents before signing.

Key Professionals and Steps in Any Home Purchase

Regardless of whether a buyer’s agent is utilized, several professionals and procedural steps are universal to nearly every home purchase. Securing financing is an early and crucial step, typically beginning with mortgage pre-approval. This pre-approval letter indicates the maximum loan amount a lender is willing to provide, demonstrating financial qualification to sellers. Common loan types include conventional loans, FHA loans, VA loans, jumbo loans, and options like fixed-rate or adjustable-rate mortgages.

Following an accepted offer, a home inspection is typically conducted, assessing the property’s condition and identifying any potential issues or defects for the buyer’s benefit. While not strictly required by lenders, it is a standard practice to gain insight into the home’s structural and mechanical integrity. An appraisal is a separate, objective assessment of the home’s value, almost always required by mortgage lenders to ensure the property serves as adequate collateral for the loan amount. Appraisal costs generally range from $325 to $1,000.

A real estate attorney plays a role in facilitating the legal transfer of property, reviewing contracts, and ensuring compliance with state laws. While their presence at closing may be mandatory in some states, hiring an attorney is a prudent decision to safeguard legal interests, regardless of state requirements. Additionally, a title company or escrow agent acts as a neutral third party, holding funds and documents in trust, such as the buyer’s earnest money deposit, which typically ranges from 1% to 5% of the purchase price. They ensure all conditions of the sale are met before finalizing the transaction and disbursing funds.

The closing process, which typically spans 30 to 45 days, culminates in the transfer of ownership. During this period, the lender finalizes the mortgage, the appraisal and inspection reports are reviewed, and a title search is completed to ensure a clear title. The closing meeting involves signing legal documents and transferring funds, after which the buyer receives the keys to their new home.