Buying a house is a big investment, and the process can be overwhelming, especially if you’re doing it without the help of a realtor.
However, purchasing a home without a realtor is possible, and doing so can even save you money on commission fees.
In this article, we’ll discuss the steps you need to take to buy a house without a realtor.
From researching the market to negotiating with the seller, we’ll cover everything you need to know to make the process as smooth and successful as possible.
Whether you are a first-time homebuyer or a seasoned investor, this guide will provide the knowledge and tools you need to buy a house independently.
Common Risks When You Buy a House Without a Realtor.
You must first realize that when you go through a realtor, they work for you, and when you decide to work without one, the person you buy from is working for themselves.
This can quickly become a nightmare if you are unfamiliar with house-buying.
Here are a few things you need to know:
Legally Binding Documents
There are a few legally binding documents in a home-buying transaction that you can’t afford to get wrong.
These documents contain the terms of the purchase.
The real estate agent’s job is to review and explain all the contract terms and add supplement conditions to the agreement if needed.
You hire realtors for their expert knowledge to ensure you are best protected in the transaction.
These documents are:
Purchase agreement
A purchase agreement is a legally binding contract outlining the terms and conditions of the sale between you and the house seller.
The agreement typically includes details such as the purchase price, closing date, any contingencies that must be met before the sale can be completed, and any warranties or representations made by the seller about the property.
You and the seller have to sign the agreement before the sale is finalized and the property is transferred to you.
Addendum To The Purchase Agreement
An addendum is a document added to a purchase agreement to provide additional information or clarification about the terms of the sale.
For example, an appendix might provide more detailed information about the property’s condition or add contingencies that must be met before the sale can be completed.
Amendments To The Purchase Agreement
An amendment is used to make changes to the original purchase agreement.
An amendment might change the purchase price, closing date, or any other terms of the agreement that were originally agreed upon.
Amendments are usually signed by both the buyer and seller and must comply with the laws of the province where the property is located.
Both addendums and amendments are used to update or supplement the original purchase agreement and are considered part of the original agreement.
If you choose to proceed without a realtor, you may need help preparing these documents.
Market Knowledge.
Realtors spend most of their time surfing the Internet for new and upcoming listings, going to open houses, and hunting down properties for their clients.
They know what’s going on in the market. You can utilize their in-depth knowledge to find the right house to buy and the up-and-coming places with houses within your budget.
The realtor’s job is to scour the entire market for the right properties that meet your needs.
They direct their house search based on your needs. If you go through this process yourself, you may spend more money than you could have if you hired a real estate agent.
The realtor will advise you on the maximum price you should consider offering for the property you like.
Their prices could be grounded on their market research about the specific market.
Time Investments
When you work with a realtor, they will save you a lot of time by showing you homes that fit your needs and making appointments.
When you go alone, all these tasks lie on your shoulders. If you only have one day to look for a home, you will need to make the most of it and work quickly.
This can be exhausting and very time-consuming.
Negotiations Can Be Tricky
This is an essential part of the process.
When you go through a realtor, they will negotiate on your behalf and ensure everything goes smoothly.
When you purchase a house without a real estate agent, the seller is not obligated to help you with anything.
This is a critical process and, if done incorrectly, can lead to several problems later on.
A good understanding of the market and property values will be required without professional assistance.
How to Buy a House Without a Realtor
If you want to buy a house without a realtor, here are the steps you need to take:
Decide on the Area and Property Type
Before you do anything, list what you want in your dream home and your preferred location.
This should keep your search focused and save you searching time.
Think about the size of your family, where they work and go to school, how much money you have, and other similar factors that will play a role in determining which properties you should look at first.
Knowing this information will allow you to save time later on.
Some tips on deciding the area and property type:
- Finding a neighbourhood where they feel safe and offer good schools is essential if you have children.
- If you are looking for a suburban home, find one close to conveniences, such as grocery stores and gas stations.
- If you are interested in a specific area, research the average property values. This will help you determine whether you can afford a home there.
Assess Your Financial and Credit Situation
Before pursuing your dream home, evaluate your financial and credit standing to determine what you can afford.
- Key Questions to Ask Yourself:
- Do you have enough saved for the down payment and closing costs?
- Are your monthly debt obligations manageable?
- Can your family income comfortably cover your debts and future mortgage payments?
A mortgage is a significant financial commitment, so being prepared is essential.
Get Pre-Approved with approvU Mortgage.
The best way to assess affordability is by obtaining a pre-approval letter, which you can do online with approvU Mortgage.
Provide basic details about your income and credit to determine your budget.
- How approvU Works:
- Pre-approval is based on the qualification criteria of multiple lender partners, not just one.
- Once you find your home, update approvU Mortgage with property details to proceed with full approval.
Important Note:
A pre-approval doesn’t guarantee a mortgage. It confirms affordability and helps ensure lenders do not see you as a high-risk borrower.
Find the Homes You are Interested in
With your interests listed and finance confirmed, you can start checking online resources for houses. Use your pre-approved budget as your guide to focus your search on houses you can afford.
You can use free online resources like Realtor.ca or the Real Estate Board’s website in the area of your interest to view houses on the market.
For example, if you are interested in buying a house in Woodstock, you can check out the market inventory in Oxford County here.
Most of these online tools allow you to search their database by location, price range, number of bedrooms, and other factors on sites.
Ensure your search is as specific as possible to find exactly what you want.
Check Out the Homes that Interest You
Once you have found a property of interest, check it out.
You’ll need to schedule an appointment with the seller or the listing agent to view the property.
When touring the house, you should look closely and watch out for the following:
- Wall and floor condition
- Unpermitted additions
- A bathroom or kitchen design
- Pay attention to fresh paint
- Test the windows
- Lawn condition
The question you should ask the seller or the seller’s agent:
- When are offers due?
- How many offers have been made?
- Why are the sellers moving?
- Have the sellers made any changes to the home’s original design?
- Are there any issues with the property?
Make sure to mention any issue you noticed in the house to the seller or the listing agent and include conditions in your offer to fix them.
Make Your Offer
After reviewing the pricing and condition of the property, you’re ready to submit your offer.
To avoid rejection, include a purchase deposit, typically 1% to 3% of the sale price, and ensure your offer is competitive.
If considering a lower offer, research comparable properties to guide your decision. Be sure to include financing and inspection contingencies in your offer.
The financing contingency lets you back out if your mortgage isn’t approved, while the inspection clause allows renegotiation, repair requests, or withdrawal if significant issues are identified in the inspection report.
The report covers areas like structure, plumbing, roofing, and electrical systems.
Get the House Inspected and Repaired if Necessary
As highlighted above, if your offer includes a home inspection contingency clause, you should move forward to have the house inspected as soon as possible.
A home inspection will cost between $500 and $1,000, depending on the size and location of the property.
You can execute the home inspection contingency clause after the home inspection is completed by either satisfying the house if the house is in great condition, requesting repair if the conditions are not favourable, or walking away from the agreement.
Finalize the Agreement and Move-In
Once you have completed all the above steps, you can complete your mortgage financing and move into your new home.
To complete the mortgage, you will need to submit a few documents to help the lender validate your income, identification, down payment availability, and all other requests.
On approvU Mortgage, you can see all the documents you must submit on your document page and follow up with the mortgage loan status.
Final Thoughts on Buying a House Without a Realtor
Buying a house without the help of a realtor can be daunting, but if you are prepared and know what to do, it is possible.
By the seven steps outlined in this article, you will be on your way to owning your dream home in no time.
If you follow the steps in this guide, you can buy a house without the help of a realtor.
Buying a house without a realtor may only sometimes be possible because of circumstances like not making enough money or having bad credit.
