When you’re in the market to buy a home, it’s usually a good idea to work with a real estate agent.

You can buy a home without a real estate agent, but whether you should depends on your personal circumstances and knowledge of the real estate industry.

In most cases, homebuyers work with a qualified agent: 86% of buyers in a recent survey bought their home through a real estate agent or broker, according to a 2022 report from the National Association of Realtors.

You may hear real estate agents also referred to as Realtors or real estate brokers. While there are slight differences, all are types of agents that can help you complete the purchase of a home. We’ll use these terms interchangeably in this article.

Let’s review the pros and cons of using a real estate agent and detail the process you’ll face if you decide to buy a home without a real estate agent.

• What are the risks of not using a real estate agent?
• When should I buy a home without a real estate agent?
• How to buy a house without a real estate agent

What are the risks of not using a real estate agent?

In most cases, you’ll want to find a real estate agent. There’s very little advantage to navigating this process solo. In fact, since the seller typically pays the buying agent’s commission, working with an agent generally doesn’t cost the buyer anything.

Here are some other reasons to consider working with an agent.

• Market intelligence — Even if you’re buying in an area you’re familiar with, a real estate agent may know of a new development or neighborhood you’ve never visited. Agents spend their days in the real-estate trenches, so they may have on-the-ground information about the current state of the market, which is essential to finding the right home for the right price.
• Listing access — While you can view listings on real estate websites and sometimes even the local MLS (multiple listing service), you likely can’t access as much information about properties as real estate agents. Plus, real estate agents may learn about “pocket listings” — properties not on the MLS — as well as homes about to come on the market. Getting in first can mean the difference between landing a property in a hot market or missing out.
• Professional advice — Real estate agents can suggest details to include in your contract that you might not think about.
• Time saving — Buying a home is stressful. It’s also complicated and time-consuming, with lots of paperwork involved. You can lean on your agent for help — a big comfort if you’re a first-time homebuyer. For instance, they can advise you on financing options, arrange a home inspection and help you prepare for closing.
• Professional connections — Buying a home involves many specialists, including home inspectors and lenders (if you apply for a loan). A real estate agent’s network of contacts can help you choose the right partners as you move through the process.

Should I buy a home without a real estate agent?

In most cases, you shouldn’t. But there are some scenarios where not having an agent could make sense.

• Purchase price savings — By not using an agent, the seller no longer needs to pay a portion of the commission (generally 2.5% to 3% of the purchase price) to a buyer’s agent. Ideally, the seller will pass on that discount to you, shaving money off the home’s price.
• Industry expert — Whether you’re an experienced real estate investor or an agent yourself, if you’re experienced at buying and selling real estate, you may want to skip hiring an agent.
• Family property — If you’re buying a family property, such as your parents’ home, you may wish to keep the process simpler, especially if you’ve already agreed on a price.
• New construction — According to the National Association of Realtors report, 7% of buyers purchased their home directly from a builder or builder’s agent.

How to buy a house without a real estate agent

If you’re set on buying a house without a real estate agent, here’s a brief overview of what to  expect.

• Determine your budget and wish list. Then, based on your knowledge of the local market, figure out what’s reasonable to expect within your budget.
• Secure mortgage preapproval. Unless you’ll be paying in cash, get a conditional letter of approval from your lender specifying the size of the loan you may qualify for.
• Look for listings, schedule showings and view homes. Once you’re ready to make an offer, consider the comps, or comparable prices for which similar properties have been selling in your area.
• Ask for a seller’s disclosure. This document helps you find out if the home has any issues, such as mold.
• Make an offer. Don’t forget to include contingencies, or scenarios where you can back out of the deal or revise the price, such as after the home inspection. If the home is in demand, you might want to write a personal letter to the seller to convince them to sell to you. You may have to negotiate the price with the seller or seller’s agent (or you may be rejected).
• Hire a qualified home inspector to inspect the home. Based on issues uncovered during the inspection, renegotiate with the seller or seller’s agent and settle on the final sale price.
• Finalize the loan and close the sale. Complete your loan paperwork, schedule the closing and decide on providers for closing services, like title insurance. Do the final walkthrough a day or two before the closing.

What’s next?

In most cases, your best bet is to work with a real estate agent. But if you think you might not, consider these questions first.

• Do I know exactly what type of home I want?
• Do I know the local market well?
• Do I have the time and energy to handle this process without a real estate agent?
• Am I a skilled, experienced negotiator?
• Do I think I might be able to shave money off the purchase price of a home?
• Am I buying the home from a friend or family member?
• Am I an experienced real estate agent or real estate investor?
• Do I plan to buy a new construction property from a builder?

Want to learn more? Check out some of our top mortgage lenders for first-time homebuyers.

• Homebridge Mortgage: Homebridge offers resources that specifically cater to first-time homebuyers.
• Rocket Mortgage: Consider Rocket Mortgage if you’d prefer an online-first experience.
• PennyMac Mortgage: PennyMac offers a wide variety of home loans and shares current rates on its site, which can be helpful for people looking to buy their first home.
• USAA Mortgage: USAA is a good option for military members and their families. 

When you want to borrow cash based on your home equity, a HELOC on an investment property might make sense.

But keep in mind that these HELOCs, or home equity lines of credit, are typically tougher to qualify for than HELOCs for primary properties — and fewer lenders offer them.

We’ll review the pros and cons of taking out a HELOC on an investment property as well as alternatives to explore.

• Can I get a HELOC on an investment property?
• How do I get a line of credit for an investment property?
• Pros and cons of getting a HELOC on an investment property
• Alternatives to HELOCs

Can I get a HELOC on an investment property?

A HELOC is a revolving line of credit secured by the borrower’s equity in a property. Typically, the borrower doesn’t need to begin making payments until they’ve started spending money — similar to a credit card.

By taking out a HELOC on an investment property, you may be able to pay for improvements to your property or finance personal debts like school expenses or medical bills.

Keep in mind that investment property HELOCs are generally considered riskier for lenders than HELOCs for primary homes, so your rate will likely be higher. If you’re in the market for a HELOC on your investment property, you’ll find fewer options available.

For example, Boeing Employees’ Credit Union offers HELOCs for primary, secondary and vacation homes as well as investment and rental properties — but each has a different APR. A HELOC on a primary residence has the lowest starting rate, while a HELOC for an investment property has the highest starting rate.

How do I get a line of credit for an investment property?

The process of applying for HELOCs on primary and investment properties is similar. You should expect to provide documentation like tax returns, pay stubs and signed leases. The lender may also require an appraisal.

If you’re approved, you’ll receive a written commitment of terms and conditions before closing on your HELOC.

Meet strict requirements

When evaluating your HELOC application, lenders typically consider the lendable equity in the home, your credit rating and your overall ability to repay the loan. For an investment property, though, requirements tend to be stricter since it’s not a primary residence — and lenders usually see that as posing a higher chance of default.

Shop around for lenders

Not all lenders offer HELOCs for investment properties, so it’s important to shop around. Consider your current lender or mortgage broker, small banks and local credit unions. As part of your research, you can also ask members of real estate investing forums for lender recommendations.

Negotiate

If you don’t find an obvious winner through your research, you can try contacting lenders who have already made you offers. If you didn’t find their terms satisfactory, ask for more competitive bids or tell them about the other offers you’ve received to see if they can beat them.

Pros and cons of getting a HELOC on an investment property

Here’s a quick overview of potential upsides and downsides when it comes to these types of HELOCs.

Pros

• Only repay what you use, plus interest
• Repay and reuse the credit line as needed during the draw period
• Interest rates are likely to be lower than a credit card or personal loan
• You may be able to write off a portion of the interest you paid for taxes if you use the money for home renovations

Cons

• It’s more difficult to find lenders that offer these types of HELOCs
• Qualifying for these types of HELOCs is more difficult than on a primary residence
• The interest rates tend to be higher than for HELOCs on primary properties
• Interest rate is often variable over time, meaning rates can increase quickly
• You could lose your property to foreclosure if you default on the loan

Alternatives to HELOCs

Don’t think a HELOC on an investment property is the right fit for you? Here are some alternatives to consider.

1. Cash-out refinance: This option lets you refinance your mortgage for a larger amount than what you owe, receiving the difference in cash. However, you may end up with a higher interest rate.
2. Unsecured personal loan: Since these loans are riskier, interest rates tend to be higher. You might choose this option if you don’t have much equity.
3. Credit card: As with an unsecured personal loan, you might go this route if you’re short on equity. Shop around to find the lowest interest rate you can, since credit card interest rates can be high.