Home buyers don’t technically need a realtor to buy a house, and can negotiate directly with sellers and hire a real estate attorney for closing. But hiring an agent is usually a good idea and doesn’t cost buyers anything out of pocket.
- Buyers who use a real estate agent often score a better price thanks to the agent’s expert guidance and negotiating skills.
- Real estate agents can make buying a home simpler and less stressful, especially when it comes to inspections, negotiations, and paperwork.
- Some discount brokers can match you with a buyer’s agent and even offer cash back at closing.
» MORE: Do you need a realtor to sell?
Do I need a realtor to buy a house?
While nothing stops you from buying a house without the help of a real estate agent, it’s usually not a smart move. That’s because they can help protect you from, among other pitfalls:
- Overpaying for a house
- Messing up paperwork
- Overdoing or overspending on repairs that you could negotiate instead
Unsurprisingly, the vast majority (87%) of buyers purchase their home with the help of an agent. Buyer’s agents handle a wide range of responsibilities, including advising you on each home’s fair market values and offer prices as well as negotiating terms in your favor.
|What home buyers want most from their agent|
|1. Help understanding the buying process|
|2. Pointing out features or faults with a property|
|3. Referrals of service providers (home inspectors, appraisers)|
|4. Negotiating better sales contract terms|
|5. Enhance buyer's understanding of the local market|
Source: National Association of Realtors
» LEARN: Good Ways to Find a Buyer’s Agent
How much does a buyer’s agent cost?
The seller will likely cover your agent’s commission (2.5–3%), and you pay nothing out of pocket. Sellers typically pay both real estate agents commissions, which are generally around 5–6% of the home’s sale price, split between each agent and deducted at closing.
You could potentially save money by negotiating with the seller and their agent directly to refund any savings from the buyer agent commission back to you, either through a lower sales price or a credit at closing. This might not be the best move, though.
- The pressure and stress of buying a home without an expert in your corner may not be worth the money saved.
- There’s no guarantee you’ll actually save money at closing, especially if you don’t buy the house at a fair price.
Cash back options for buyers
Some real estate services offer home buyer rebates. They require approval from your lender and aren’t available in some states.
With a commission rebate, your agent shares part of their earned commission with you in the form of credits, which you can use for closing costs, repairs, or other buying expenses.
Other companies, like Clever Real Estate, send eligible buyers cash back after closing without lender approval required.
What does a realtor do for a buyer?
When representing a buyer, a real estate agent takes on several responsibilities to smooth their home search and purchase.
|💲 Facilitates financing||Connects you with a lender to determine your budget and secure pre-approval. Guides mortgage-related paperwork.|
|🔎 Identifies properties||Finds homes that meet your needs and budget requirements. Analyzes properties to determine fair pricing.|
|🏠 Tours homes||Arranges private home showings. Joins open house visits. Highlights noteworthy features or flaws.|
|📝 Submits offers||Advises on offer amount, contingencies, etc. Writes up and submits offers. Manages related paperwork.|
|🤝 Negotiates deals||Provides expert counsel during negotiations. Communicates on your behalf with the listing agent.|
|🎉 Orchestrates closing||Oversees home inspections. Hires and manages other professionals to complete the transaction, like title or escrow company, attorney, specialty inspectors, and contractors.|
💡 Learn more: What is a Buyer’s Agent? Everything You NEED to Know
When buying without a realtor may be OK
Buying a house without a realtor may be warranted in a few situations.
Deals between friends or family members
If you and the seller know each other personally and agree on the sales price and contract terms immediately, then one agent can handle the process for both parties. This is known as a dual agency agreement.
Working with one agent could streamline the process and save you some money, as most agents are open to working for a reduced commission when representing both sides in a deal. Note: Some states prohibit dual agency because it presents a conflict of interest.
Just remember that buying or selling a house to family or friends carries significant risks, including more scrutiny from the IRS and lenders or family drama if things don’t work out as planned. Consider hiring a real estate attorney for more help.
Real estate agents can be helpful when purchasing a newly built home but are not essential.
Realtors can guide you through the process, including help with lot selection and advice on what finishes retain the most value. However, there may not be much room for negotiation in new construction, limiting the need for an agent.
❗ If you visit a new construction sales center without agent representation, you may jeopardize your ability to be represented by an agent later on if you decide to purchase a home there. (Learn more.)
What is a buyer’s agent? A buyer’s agent is a real estate agent who represents a home buyer. Learn more about what a good buyer’s agent can do for you.
What are good ways to find a buyer’s agent? The best ways to find a buyer’s agent include agent matching services, personal referrals, and lenders. We compare your best options.
Best questions to ask a realtor. Before you hire a realtor, you should interview them by asking the right questions to test their legitimacy, fit, and value.