Do I Need a Real Estate Agent?

Do I need a real estate agent to buy a house? | Do I need a real estate agent to sell? | Unique situations | When should I hire a realtor?

Whether you're buying or selling a property, it's almost always a good idea to have a real estate agent. While you aren't legally required to hire an agent, not having one exposes you to potentially costly risks in the long term.

If you're buying a house, you should hire a realtor because they're experts at finding homes for sale, negotiating with sellers, and helping you complete the required paperwork.

Besides, you won't have to pay your real estate agent anything out of pocket because their commission is usually included in the listing price.

And if you're selling, real estate agents provide great value. They can help your house reach more buyers, price the home properly, and help make negotiations and closing a lot less stressful.

If you're hesitant about getting a realtor because you’re worried about the cost, a company like Semya-Moya can help. Clever pre-negotiates discounted listing fees with realtors so you pay only a fraction of the traditional rate.

» SAVE: Sell with a top local agent for just $3,000 or 1.5%!

Do I need a realtor to buy a house?

In most cases, you can buy a house without a realtor, but it's rarely a good idea. We suggest working with a buyer's agent because they can help you find homes, schedule viewings, negotiate a purchase agreement, and ensure your paperwork is in order.

Legally, you only need to hire an agent when purchasing a government-owned foreclosure property, also called a HUD home. These are homes where the owner has defaulted on a mortgage insured by the Federal Housing Administration — however, they're relatively rare.

Plus, the buyer's agent commission is usually included in the listing price, meaning it costs you nothing extra to have an agent. So you have nothing to lose — and a lot to gain — by hiring one.

Why you should use a realtor when buying a house

Find ALL homes for sale

A real estate agent can increase your chances of finding your dream home — while avoiding the stress of competing with other buyers — because they have access to more listings.

For example, your agent will likely have professional connections, both with other realtors and with homeowners they've worked with in the past who may be selling.

These connections may give your agent access to pocket listings, which are homes for sale that haven't been listed on the MLS. They may also get advance notice from other agents about properties that are about to be listed. That way, by having an agent, you could learn about homes for sale before anyone else.

If you live in a hot market, getting early access to homes can mean potentially avoiding stressful bidding wars or losing out on a property you love. Without an agent, it's next to impossible to discover these "hidden" properties for sale.

Get expert advice when touring homes

A real estate agent can help you get a lot more out of home viewings. They can point out renovations and features that add a lot of value to the property compared with those that are merely cosmetic.

For example, your real estate agent will likely know what kind of countertops are worth paying extra money for versus those that are likely to suffer more wear and tear in the near future.

An agent who goes to a viewing with you can ask the seller questions that reveal important information about the house, including when repairs were last done or what quality materials were used for a recent renovation.

Contacting sellers and scheduling viewings also takes time. Your realtor can take on this work for you and set up viewings that work with your schedule. That way you can worry less about contacting sellers and seller agents yourself and instead focus on deciding which house is right for you.

Negotiate a winning offer

Real estate agents are skilled negotiators and can use their local market knowledge to help you bargain for a purchase offer you're satisfied with.

Plus, buying a house can be as much an emotional decision as it is a financial one. Having an impartial third party run the negotiations helps keep you from making decisions based too much on emotion. This is particularly important if negotiations with the seller get contentious.

A realtor's negotiating skills aren't limited to getting the sale price down. They can also help you request concessions or set contingencies that could save you money and time in the long run.

For example, many buyer's agents will push sellers to include a credit to pay for any necessary repairs that come up during the inspection. That's because a buyer credit is often preferable to having the seller pay for the repairs themselves. The seller, if told to pay for the repairs themselves, may choose the cheapest and quickest repair possible.

Buyers who don't have a realtor struggle with this sort of insider know-how — and it’s why they sometimes end up paying more than is necessary.

Avoid costly home-buying mistakes

Buying a house is a major financial transaction and involves some risk. Your real estate agent can help you avoid mistakes that can cost you money and time.

For example, real estate transactions involve a lot of paperwork, much of which may seem confusing and overwhelming. Getting the paperwork right matters since a mistake could result in legal and financial risks.

Your real estate agent can guide you through the paperwork, helping you understand the purpose of each document and helping you reduce your risk.

The mortgage approval process is another area where buyers often feel overwhelmed and make mistakes. Your realtor can help you deal with your lender and ensure you avoid unwanted surprises.

For example, if it turns out that the home you want to buy is overpriced — which is a particular risk when the seller doesn't have an agent — your lender is unlikely to lend you the full amount to cover the agreed purchase price.

With a real estate agent, you can usually figure out much sooner whether a home is appropriately priced and avoid issues with your mortgage approval process.

Minimize out-of-pocket costs

For buyers, there's almost no reason to NOT get a real estate agent. That's because real estate agents aren't paid directly by the buyer — rather, their commission is included in the listing price of most houses.

So you'll likely pay the same amount for your new house whether or not you have an agent — and you might even pay less thanks to your realtor's negotiating skills.

Since it makes no difference to the listing price whether or not you have an agent, why not make the entire buying process smoother and less stressful by hiring one?

When does it make sense to buy WITHOUT a realtor?

While rare, there are limited circumstances where it may make sense to buy without a realtor. The two most common scenarios are:

• You're buying from a friend or family member.
• You're buying from a seller who isn't working with a buyer's agent.

Buying from friends and family

If you're buying from a friend or family member, you may have already agreed on the price and terms of the sale. In this case, you may not need a realtor to help with touring your home or even negotiating the sale price.

However, even in these cases a real estate agent can be useful. For one, an agent can help with closing, which involves a lot of paperwork and legal requirements you may not be familiar with. Many agents will even work for a reduced fee in these situations. So it’s worthwhile negotiating with a realtor to get the reassurance of knowing your paperwork is being done right.

Large financial transactions involving friends and family can also get messy and are often the source of conflict. A real estate agent offers a layer of impartiality while also helping you maintain boundaries and prevent negotiations from getting too emotional.

Buying a FSBO property

If you're buying from a seller who also doesn't have an agent — which is called a for sale by owner (FSBO) property — they may resist working with buyer's agents.

Some FSBO sellers flat-out refuse to work with buyers who have agents because they don't want to pay the buyer's agent commission, which usually comes out of the listing price. In these cases, you would have to pay for the buyer's agent commission yourself out of pocket.

Keep in mind that buying a FSBO property without an agent comes with risks, for both you and the seller. The lack of representation on both sides increases the chance of something going wrong, such as a defect with the property not being disclosed or funding being jeopardized because the seller's list price doesn't match your bank's appraised value of the property.

Unless the seller is completely inflexible on the issue, it's usually a good idea to have a buyer's agent when buying a FSBO property.

Can I save money by buying without a realtor?

Probably not. Because the buyer's agent's commission is included in the listing price — you don’t actually pay for it yourself out of pocket — you’ll likely pay the same amount for your house with or without an agent.

While you could try to negotiate with the seller to reduce their listing price because there's no buyer's agent, there's no guarantee the seller will do so.

One of the biggest advantages of having a buyer's agent is that they are skilled negotiators. They can use their experience to negotiate a better price for you, which may ultimately save you more money in the long run.

If you're eligible, you may qualify for Clever Cash Back when you work with a Clever Partner Agent. With Clever Cash Back you could get cash back after you’ve closed — and you'll still get all the benefits that come from working with a full-service real estate agent!

FAQs for buyers

Do I need a real estate agent to sell my house?

It's a good idea to use a real estate agent to sell your house in most situations. A realtor can help you price your home properly, attract more potential buyers, help with the paperwork, and negotiate the best offer.

While you will have to pay a commission to your realtor, this commission is often worthwhile. That's because people who have a realtor sell for 26% more on average than those who don't have a realtor — which more than makes up for the average real estate agent commission of 5.5–6%.[1]

Why you should use a realtor when selling a house

Find more buyers

Real estate agents can get you better exposure with both buyers and buyer's agents. One way realtors find buyers is by posting your listing to the local MLS, which then syndicates your listing to hundreds of other websites, including Realtor.com, Zillow, and local brokerage websites.

Getting listed on a local MLS is an incredibly powerful way to market your home — and only licensed realtors and brokers are allowed to post on one. About 91% of all homes for sale are listed on an MLS, yet only 6% of people who sell on their own have an MLS listing.[1]

By getting your home on an MLS, you'll greatly increase the chances of a buyer's agent seeing your listing and getting your house sold faster.

» MORE: Considering a flat fee MLS service? Find out the pros and cons.

Real estate agents are also usually well connected with buyer's agents — and those connections matter when it comes to selling your home fast.

Your agent, for example, can tap into their network to see if other agents have clients who are considering buying a house. In competitive markets, this insider knowledge can sometimes lead to showings and offers before your home is even listed.

Avoid costly pricing mistakes

Pricing the home correctly is one of the hardest tasks for sellers who don't have a real estate agent.

Many sellers base what they think their home is worth on what they've seen other homes in their neighborhood sell for. Or they use online estimate calculators, like Zillow's Zestimate. However, these methods and services are often unreliable and can lead to big pricing mistakes.

Pricing a home right isn't always straightforward. An accurate price depends on issues specific to your home, like upgrades, features, and even being in a particular school district. An online calculator will have a hard time accounting for these features.

A real estate agent can run a comparative market analysis to determine an appropriate list price for you, usually for free and with no obligations.

Get personalized, expert advice for marketing your home

Your realtor has expertise that can lead to tangible benefits for you when selling your home. They have worked with buyers and sellers, so they are familiar with what wows buyers and what is a huge turnoff.

They can help identify features in your home that should be highlighted in your photos so that your listing gets more interest on Zillow and other platforms. They can also give you advice on which repairs will help raise your listing price the most and which aren't worth the money.

During showings, your realtor can use their "tricks of the trade" to help you sell faster. For example, if they may connections with professional stagers, they direct those stagers to highlight aspects of the home most enticing to buyers.

The more attractive you can make your house to buyers, the easier it will be to sell — especially at a price you're happy with.

Negotiate the best offer possible

Negotiating is one of your real estate agent's most valuable skills — it can end up saving you money, reducing stress, and preventing a deal from falling through.

Without experience negotiating real estate transactions, you may struggle to know when a buyer's offer is fair and when you can push back without jeopardizing the deal.

Your realtor will be able to negotiate the sale price, as well as other elements in the purchase offer, such as contingencies. Contingencies can be particularly difficult to negotiate without experience, but they are important as they could scupper a deal or lead to the buyer requesting a renegotiated price.

Your agent's experience means they know which contingencies are likely to be deal breakers for buyers and which could get you a better sale price with minimal cost or inconvenience for you.

Avoid paperwork errors that could put your sale at risk

A real estate agent can make completing the paperwork a lot easier than if you are selling on your own. They can ensure you meet deadlines for filing paperwork and that no important forms slip off the radar.

Many sellers struggle with paperwork when they don't have a real estate agent. In fact, 10% of FSBO sellers say it's the hardest part about selling a home without a realtor.

A realtor can also help ensure you complete the mandatory disclosures in your state. Failure to do so could result in costly legal problems later on. For example, in many states the buyer could hold you liable for failing to disclose a leaky roof or for the presence of hazardous materials, such as lead paint.

When it makes sense to sell WITHOUT an agent

Although there aren't many scenarios when not using an agent to help sell your house is worth the risk, it may work for you if you already have a buyer lined up or you're selling in an especially hot market.

You already have a buyer

If you already have a buyer lined up — such as a close friend or family member — then you may not need an agent to list your home, negotiate a sale price, or draft a purchase agreement.

It's usually a good idea to bring in an agent anyway, at least to assist with closing. Doing so will make dealing with paperwork a lot less stressful and confusing. Having an impartial third party can help avoid disputes, which are, unfortunately, common with large financial transactions involving friends or relatives.

Plus, many realtors will work for a reduced rate if you only require their services at closing. It's usually worthwhile to ask a realtor if they're willing to service a relatively simple transaction for a lower commission.

You're an experienced seller in a hot market

In some especially hot markets, homes almost sell themselves. If you have lots of experience selling houses — to the point that you're comfortable with negotiations and the closing process — you may opt to go without a realtor.

But while you may be guaranteed of selling your home quickly in a red hot market, that doesn't mean you'll get the best price. Even in high-demand areas, houses that boast certain features that buyers are looking for tend to sell for more.

A realtor can help you highlight what features buyers are looking for so that you maximize your chances of your home selling at a higher price point.

Can I save money by selling without a realtor?

You won't pay a listing agent's commission if you sell without a realtor, but you could end up losing more money overall than if you went with an agent.

Homes sold without a realtor sell for 26% less on average than homes sold with a realtor. That's way more than what you'll pay for a real estate agent.

A better solution is to work with a full-service realtor without paying full price. Clever can connect you with a full-service real estate agent, but at a greatly reduced rate thanks to our pre-negotiated discounts.

FAQs for sellers

Other situations that might require a realtor

Do I need a real estate agent to rent a house or apartment?

Using a realtor isn't required in order to rent a house, but it is common in highly competitive markets, like Chicago, New York City, or Seattle. In these tight markets, a real estate agent can help you book appointments to tour available apartments.

Using a real estate agent can offer renters certain advantages. For example, they can help protect you from rental scams or, if you’re new to the area, they can use their local knowledge to help you find a neighborhood and property that best fits your expectations.

In some cities, the tenant pays a fee to the real estate agent. Fees vary by location, though they're often equivalent to 50% or more of the first month's rent or 15% of the first year's rent.

Do I need a real estate agent to rent OUT my house?

If you don't have time to find a tenant yourself, a real estate agent can handle showings so you don't have to. Some agents — but not all — offer property-management services once the rental property is occupied.

Realtor fees for finding tenants vary, though they're generally equivalent to one month’s rent or 10% of the rent for the term of the lease.

Do I need a real estate agent to refinance?

No, a real estate agent is not required to refinance your house. Most people don't use one when refinancing, And it's common for homeowners to refinance with their current financial institution.

However, you should compare refinancing offers from multiple lenders for the best rate.

A mortgage broker — who is NOT the same as a real estate broker or agent — can help you find the best interest rates and terms on refinancing options. But a mortgage broker is not required and you can often find a good rate on a mortgage yourself using online comparison tools.

When should I hire a realtor?

Whether you're buying or selling, you should contact a realtor as early in the process as possible in order to get the maximum value possible from them.

For buyers, a real estate agent can provide advice in the early stages of the buying process, such as by arranging showings and finding homes for sale — including possibly unlisted homes (known as pocket listings).

For sellers, a real estate agent can take care of a lot of the upfront work that sellers typically struggle with on their own.

For instance, pricing the home properly is one of the hardest tasks for sellers. One of the first things your agent will do is perform a comparative market analysis, which will suggest a listing price for your home based on what similar homes are selling for in your area.

And remember: whether you're buying or selling, Clever can help you find a full-service agent who is an expert in your local market, while also potentially saving you thousands of dollars.

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