Buying a House Without a REALTOR®

By Emily Southey | 13 minute read

Most homebuyers choose to buy a home with a REALTOR®. But, just like sellers can opt to sell their homes themselves, buyers can choose to buy homes without the assistance of a REALTOR®. Below, you’ll find a list of steps you need to take to make the homebuying process as smooth as possible.

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How Buying a House Without a Realtor Works

If you’re wondering whether to buy a house without a REALTOR®, then you may be curious as to how it works. We’re going to tell you. The obvious difference is that you are responsible for each step of the homebuying process yourself. Without a REALTOR®, you won’t have someone there to negotiate with the seller on your behalf, send you listings, schedule viewings, escort you to open houses, or advise you on how to make an offer or a counteroffer. Instead, you’ll be doing all of these tasks on your own. While this might sound daunting, it’s important to remember that you are entirely within your rights to buy a house without a REALTOR®. It is perfectly legal to do so, and you may even derive several benefits from it. Further, buying a house without a REALTOR® doesn’t mean you can only submit offers on homes that are for sale by owner (FSBO). You can submit an offer on any property you want. However, as you likely know, submitting an offer does not mean that it will be accepted. In some cases, sellers prefer to work with buyers who have REALTORS®. 

To kick off the solo homebuying process, get pre-approved for a mortgage. Next, search online real estate marketplaces for listings in your price range and desired neighbourhood. Schedule showings directly with the seller or the seller’s agent. Draft and submit an offer on a home you like. If the seller makes a counteroffer, prepare to negotiate (tip: you’ll have better luck if you’ve researched the local housing market and know how much comparable homes in the neighbourhood recently sold for). Once your offer is accepted, you will need to hire a home inspector to inspect the home, and possibly an appraiser as well. After the inspection and appraisal are complete, it’s time to close on the home by having a real estate attorney review all the paperwork. 

A final word on real estate attorneys — if you decide to purchase a home without the help of a REALTOR®, we strongly suggest that you consult with a real estate attorney. A real estate lawyer can help you navigate the complex legal aspects of buying a home, transfer the title to your new property, and review all legally binding paperwork. It is not recommended to purchase a home without an attorney.

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Things to Consider When Buying a House Without a Realtor

Now that you know a little bit more about the process of buying a house without a REALTOR®, you might be inclined to make a decision one way or the other. But before you do that, we urge you to consider the following factors.

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Buyers often do not have as much market knowledge as REALTORS®

Realtors are experts in their fields, which means they know the ins and outs of the local housing market. In fact, it is their job to know the market. It’s extremely unlikely that you will have as much market knowledge as a REALTOR®. Therefore, before deciding to buy a home without a REALTOR®, make sure you have the time and energy necessary to dedicate yourself to extensively researching the local market. This is the only way to ensure you find a great house at an ideal price.

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Negotiations can be stressful

Another factor to consider when buying a house without a REALTOR® is negotiations. Most home sales involve a negotiation phase. Negotiations can be extremely stressful, especially if you aren’t used to them. Entering a negotiation without the proper skills can result in you overpaying for a home or losing out on a property you really want. But when you buy a house with a REALTOR®, they will negotiate on your behalf, and their negotiation skills are usually top-notch since it is a key element of their job.

Paperwork is complex and there’s lots of it

Do you know how to draft an offer letter? Or that offers are legally binding if accepted by the seller? What about an inspection report? Do you know how to read one? The reality of buying a home is paperwork. Such a major transaction comes with a mountain of paperwork, and the paperwork is complex. If the thought of managing pages and pages of documents is overwhelming, you might want to hire a REALTOR®. A REALTOR® can review all paperwork alongside you, explaining anything you don’t understand and highlighting any potential problems. If you choose not to hire a REALTOR®, be sure to hire a real estate attorney to review all contracts.

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A Step-By-Step Guide to Buying a House Without a Realtor

Continue reading for a simple step-by-step guide to buying a house without a REALTOR® in Canada.

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Step 1: Apply for a mortgage pre-approval

Any time you purchase a home, whether you’re buying one with or without a REALTOR®, you will likely need to take out a mortgage. Unless you’re buying a home with cash, a mortgage will be necessary to fund your purchase. The first step in getting a mortgage is applying for pre-approval. A mortgage pre-approval is one of the best tools at your disposal as it will show you what you can afford, helping you determine your budget and narrow down your search. 

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Step 2: Research the local housing market

Start researching the neighbourhood you’re interested in. Find the average selling price in the area for homes similar in size to what you’re looking for. In addition, learn more about the neighbourhood’s characteristics and amenities. Does it have a good school for your child? Does it have access to public transportation? How long is the commute to work?

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Step 3: Visit homes

Once you’ve chosen a neighbourhood, search for available homes on online real estate marketplace websites that are within your budget. When you’ve narrowed down your list, schedule showings with the seller’s agent or look for open houses. 

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Step 4: Request a seller’s disclosure

Any time you’re seriously considering making an offer on a home, request a seller’s disclosure list from the seller or their REALTOR®. A seller’s disclosure is a list of known issues or hazards with the home. These issues could range from plumbing, electrical, or HVAC problems to a history of pests, mould, water damage, or structural issues. Many provinces legally require sellers to disclose issues they are aware of. 

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Step 5: Submit an offer 

Once you’ve fallen in love with a property, it’s time to submit an offer. This step can be tricky, especially in a hot housing market where there are likely to be other bidders. The goal is to make your offer as attractive as possible while still allowing you to get what you want at a fair price. The market research you conducted in step 2 will come in handy here. You’ll want to consider the prices of other comparable houses in the neighbourhood, as well as how long the home has been on the market and the current condition of the home (this should partially be based on the seller’s disclosure list you received in the prior step). Generally, homebuyers should offer a purchase price below the maximum amount of money they were pre-approved for. Typical offer letters include the following information: 

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• Personal information: Offer letters must include the legal names of the buyers and sellers and the address of the home you wish to purchase. 
• Offer price and deposit: The offer letter must also include the offer price (that is, how much money you’re willing to pay for the home), as well as how much money you are willing to put down as a deposit.
• Items to be included: An offer letter should also include a list of items to be included with the home sale. For example, if you would like the seller to leave behind certain things, like window coverings or kitchen appliances, this must be specified in the offer. 
• Closing date: Offer letters also include the closing date, which is the date that you wish to take possession of the home. Closing dates typically range between 30 and 90 days from the date the offer is made.
• Offer expiration date: All offers should include an expiration date. Expiration dates are usually between 24 and 48 hours from the time the offer is sent. 
• Conditions: Finally, offer letters should include any conditions or contingencies you would like met before the deal is done. Examples of conditions include home inspection, financing, and home sale contingencies. 

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Step 6: Hire a real estate attorney and home inspector

Though it might not be required, hiring a real estate lawyer and a home inspector is good practice, especially when you’re buying a home without a REALTOR®. A real estate attorney will review all contracts and paperwork, while a home inspector will examine the home for structural and surface-level issues.