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.
But it is possible to purchase a home without a realtor, and it 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 on your own.
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 terms of the contract and will add supplement conditions to the agreement if needed.
You hire realtors for their expert knowledge to ensure that you are best protected in the transaction.
These documents are:
A purchase agreement is a legally binding contract between you and the seller of the house outlining the terms and conditions of the sale.
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 addendum might be used to provide more detailed information about the property’s condition or to 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.
For example, an amendment might be used to 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 state 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.
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 for the right house to buy, 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 choose to 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.
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.
All these tasks lie on your shoulders when you go for them alone. If you only have one day available 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 choose to purchase a house without a real estate agent, the seller has no obligation 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, you need to 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 or not you can afford to buy a home there.
Take Inventory of Your Current Financial and Credit Situation
It is important that you take inventory of your current financial and credit situations to evaluate your ability to afford your dream home. A house that’s best for your family’s needs.
Do you have enough money for the down payment and closing costs? Do you have your existing monthly debt obligations under control?
The best way to satisfy that is to get your pre-approval letter.
You can do that online with approvU. Just provide basic information about your income and credit situation to have your house affordability determined.
The pre-approval letter you receive from approvU is not from a specific lender.
Instead, approvU assesses you based on the qualification criteria of all our lender partners.
When you find your house and are ready to move forward, you need to update the approvU with property details to generate your mortgage approval.
Note that getting pre-approved for your mortgage does not mean getting the loan.
It is to validate that you can afford what you are looking at, mainly because banks do not like giving mortgages to high-risk people.
Find the Homes You are Interested in
With your interests listed out and finance confirmed, you can start checking online resources for houses using 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.
Make sure 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, make sure to go and check it out. You’ll need to set up 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 have them fixed.
Make Your Offer
Once you have done all of the above and are satisfied with the pricing and virtual condition of the property, then you can go on to put in your offer for the property.
Remember to include your purchase deposit, usually 1% to 3% of the home’s sale price.
Make sure your offer is not too low or might be rejected.
If you want to put in an offer much lower than the asking price, look at comparable properties first and use that information as your guide for your offer price.
Remember to include the home financing contingency and inspection clauses in the offer.
These contingency clauses protect your interest in the transaction. The home financing clause allows you to walk away from the transaction if you are not able to get approved for the mortgage loan.
The home inspection clause gives you the power to renegotiate the price, request repairs or walk away from the agreement if the home inspection identifies potential problems and safety concerns with the property’s current condition.
The inspection report will outline the general state of the different aspects of the house – structure, construction, plumbing, roof, wall, electrical, and others.
Get the House Inspected and Repaired if Necessary
As highlighted above, if you have the home inspection contingency clause in your offer, you should move ahead to get the house inspected as quickly as possible.
A home inspection will cost between $500 to $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 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 all the above steps have been completed, 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, availability of your down payment, and all other requests.
On approvU, you can see all the documents you are required to submit right on your document page and follow on 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 from this guide, you can buy a house without help from 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.