Buying a Home Without a Realtor: Why It Might Be Easier Than You Think

You've likely come across articles with titles like "5 Things You Should Know Before Buying a Home," "10 Steps to Buy a Home," or "15 Signs Not to Buy a Home." These pieces can make the process of purchasing a home seem daunting and complicated. Many realtors also try to convince you to sign up with them by listing numerous reasons why their services are indispensable. You might already know that hiring a buyer's agent is a no-brainer since you don't have to pay them a penny.

Did you know that the seller typically pays the buyer's agent's commission?

Changes in Commission Structures

Recent settlements by the National Association of Realtors (NAR) have shifted the landscape. Starting in August, sellers are no longer required to disclose the commission they pay to buyer's agents. This means sellers can now choose to pay zero commission to buyer's agents. Consequently, buyer's agents may have to turn to buyers for their commission. While it seems fair that agents should be paid by those they work for, are you, as a buyer, prepared to pay a substantial commission out of pocket on top of the sale price?

As a quick example, the average home in the US is around $500k. At the full 3% commission, that would be an additional $15,000 out of the Buyers pocket on top of down payment and closing costs! Not many people have that much extra laying around.

Simplifying the Home Buying Process

But let's take a step back and ask: Is buying a home really that scary and complicated?

After all, a home is just another commodity, much like a flight ticket or a car. People used to buy flight tickets through travel agents and cars from salespeople. Today, many purchase flight tickets online and buy cars like Teslas directly, bypassing traditional sales channels.

So why should buying a home be any different?

Consider this: You can find homes on multiple websites (Zillow, Redfin, etc), attend open houses or call the Listing Agent directly for a showing, obtain a pre-approval letter, and do all the necessary research on the properties you're interested in.

With a Realtor, you, the Buyer, are still doing all the Negotiations. The Realtor asks how much you want to offer, then they write it down in a document and email it. Then the Seller’s talks to the Seller, negotiates, and send another document back. This back and forth is basically a game of telephone that hopefully doesn’t lose the message during the back and forth. Many times for me it has and we have to go back and figure out the disconnect.

You are making the decisions throughout the transaction; why not just cut out the middleman ie the Buyers Realtor. That would in-turn remove a hefty commission to someone else for work you're already doing.

The Rise of For Sale by Owner (FSBO)

In 2023, approximately 7% of sellers have already removed traditional representation and opted for For Sale by Owner (FSBO). This trend is growing as technology makes it easier for homeowners to sell their properties independently.

So, why not For Buy by Buyer?

While the concept isn't widely practiced yet, it's not impractical. Imagine you've identified a home you want to buy. If you ask the seller's agent to write an offer, they might want to represent you for a commission or refer you to a colleague for a referral fee. In some cases, they might simply refuse to assist you, which is against the rules set by the NAR and could result in the Realtor losing their license!

Alternatively, you can download a generic offer template online. But what about the negotiations and other intricacies of the sale? This is where things typically get tricky.

However, the process doesn't have to be overly complicated. The key is to simplify the buying process to make it easy and secure for buyers to handle transactions on their own.

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