How to Buy a House Without a Realtor

Let’s go over everything you need to know to be able to close on for sale by owner properties without the help of a realtor. I will show you how to go through the paperwork, how to protect yourself so that you don’t get taken advantage of by the seller. With this information, you will gain the confidence to be able to go in and close on some for sale by owner deals without losing that extra 6% to a realtor. 

This article will help you close for sale by owner deals, show you how to buy a house without a realtor,  and we will also go over some other advice on purchasing that first home, first investment property, or a bigger investment property. In the last seven years, I’ve had the opportunity to close on fifteen different real estate transactions. Of those fifteen properties, six of them were actually for sale by owner. I’ve gone through this paperwork multiple times, and made a lot of mistakes. I want to show you everything I did wrong, and everything you need to make sure you do it right and get an incredible deal. 

Even with all my mistakes, I have loved every single for sale by owner transaction because there are so many advantages to not using a realtor. That doesn’t mean you should never use a realtor, they’re still great in many situations. However if you want to be able to close confidently on a for sale by owner deal, you’ve got to know how to go through the process.

My first deal was probably my favorite because it's what gave me the courage to go through with a for sale by owner deal. After the first one, it gets easier. My first deal was great because we had a common connection. Essentially I met with a guy that we both knew, we showed up and he had the paperwork all done. I signed, handed him my check and we were good to go. 

Looking back, it was insane that I didn't review it as much as I should have. At the time I thought I had done my due diligence. I thought I knew what I was doing but there are so many things I was completely missing. However I was working with someone that was very honest and upfront and the deal went perfectly. 

This success gave me the confidence to push into other deals with people that I didn't know or didn't have that connection with. I'm so grateful that it did because I've learned a lot in the process. It's helped me to acquire some incredible deals. 

Before we get into that I want to discuss the reasons why doing a for sale by owner deal is so valuable. Of course there are pros and cons to buying a house without a realtor. 

The first reason is that when you cut out a realtor the saving gives you the opportunity to knock the price way down. You can say “Look if we're not getting realtors involved. That's an extra six percent you would have to spend otherwise.” This gives you the opportunity to save a ton of money without paying a realtor. 

The next reason these deals are great is that you get a personal interaction with the seller. The whole point of Realtors is to keep both parties unemotional about the purchase or the sale. If you connect with someone you have the opportunity to use that connection and interaction to work your price even lower. This can be a huge advantage when finding their bottom line price. You can set yourself up with an even better deal. 

The next reason is that it's a relationship based interaction. This means when they hand over the property after meeting and interacting with you, the odds of them leaving the property in better shape are better because they don't want to mess up that relationship with you. They will want to give you a good property. 

Another reason these are huge deals is that you've got a straight communication so nothing gets lost between the seller, their realtor, your realtor, to you and back and forth. You can have quick interactions, get right to the point without losing anything in the process. 

Realtors are great and they can bring huge value however that six percent can go a long way. T If you're trying to get into that first home or that first investment property, six percent is money that you can play with. That can help make sure your numbers look good and you're getting into an incredible deal for yourself. 


Let’s talk about how to do the transaction properly. I've broken it down into five main steps. 

Step 1

The first step is to establish a relationship with a good title company. I suggest doing this before you even find that first for sale by owner property that you want to buy. If you've got a good relationship with them first, they're going to be able to help you with the paperwork so that you don't mess anything up. They're also going to make sure that the title is clean on the property.

They help you make sure that it’s a smooth transition with any payoff that the seller has or anything else with your loan. Having that relationship is something that you can use with the seller and say “Look, I've got a great relationship with this title company. They make things super easy and will come in great on fees.” This will put the seller’s mind at ease that you’ve got the financials already figured out. 

Step 2

The second step is to make sure that you have a pre-approval letter, proof of funds, or preferably both. When you're negotiating you can show them the pre-approval letter and proof of funds and they’ll know you’re ready to go. If you've got the relationship with the title company and proof of funds and the loan is ready to rock and roll, that's going to gain a ton of confidence with the seller. 

If you've got that pre-approval letter and that relationship with your loan officer, you should also know exactly how many days it takes you to close. The faster the better. I have a loan officer that I've consistently used for all of my properties. He's gotten to the point with my loans he can close in under ten days. When I'm negotiating a for sale by owner, I can say that I will close in under ten days. I've done 15 different loans, I can promise it'll be a super smooth transaction. 

That’s so much more value before you even get to the point where you're negotiating price. They’re open to negotiate because they know the deal will get done.

Step 3

The third step is to be prepared to negotiate with confidence. You're willing to use that pre-approval letter, you're willing to use the relationship with the title company, you're willing to use the fast close. Once you can use all of those things, you're then going to try and create a connection with them. Try to find some common ground. Tell them what you want to do with the property, how much you love it, appreciate what they've done with it. 

Now you've got that strong connection, you can move in to talking price. I've had the opportunity to knock on thousands of doors to sell people pest control. It is a five to ten minute interaction where they go from not knowing me to handing me that credit card. The only reason I share this is it's given me a skill set to know how to make a good first impression. I can connect with someone to build that value in our relationship. After all of those experiences, I know that using all of these things I've talked about to build the relationship and build the trust are huge. 

Once you've built that relationship, you can transition into talking about price. If you're interested in learning more about that training and how I acquired that skill set you can go to my Real Estate Investing Course.  

So you've got that connection, they like you, you've built up their property, proven to them that you are a good buyer they can count on. If you can get to an agreed to price (you better know what your price is), then it's time to negotiate. 

Here's how I go about negotiating. I've built myself up, I've built them up, I have that connection. I'm immediately going to come in with an offer that I think is a good price. They've got it listed but I'm not going to say, “Hey do you think you'd be willing to lower the price?” I'm going to say “For what I want to do with the property, I absolutely love it. However, these are the reasons that I feel like I've got to get it at this price.”  List off the things that need to be updated/fixed on the property. Kindly devalue what they have. 

You should know where the line is with pushing the seller on price. You might not have a lot of wriggle room with some and with others you can. They will have pointed it out or it will be very obvious that there are certain fixes needed. So you can point out some of the things that are not terrible but are just things that you'll need to invest in. 

Tell them that you love the property and want to make it work, that you’ll need to be able to pick the property up at your price. I usually go $5k-10k below what I'm willing to pay on it. I want to anchor lower than they've listed it. Instead of asking if they can give me a discount, I just anchor low where I want to be. Then they instantly wonder if their property is valued down there. 

Once you’ve started the negotiation there you can say, “I don't want to take advantage of you. I really want to do business with you. You're awesome; I want to make sure it's fair. I just feel like that's probably where I need to be to make this worthwhile. “ 

People say the first person that talks always loses. I don't think so with this kind of deal because I want to anchor low before they can anchor high. You can learn more negotiation tactics from my other articles and YouTube videos. 

Let’s move on from the negotiation and at this point we'll say you've got the price where you need to be. They're ready to close. 

Step 4

The fourth step is understanding and filling out the paperwork properly. When you go into the title company to have them give you that paperwork, you’ll be floored by how simple it is. There's not much to it and they're all the same regardless of which title company you go to. First you'll fill out the purchase price, dates, names, the property address, making sure all of that is filled out properly. The title company can't fill it out for you but they can help you do it correctly. 

Set it up so that you will not purchase the property unless you've had an inspection approved by you. The other piece that's tied to this is earnest money. Make sure that you've got a long enough time period to do your inspection and write in the addendum that the buyer gets all of their earnest money back if they don't approve of the inspection. 

This gives you the option to bail on the agreement anytime if you're not satisfied with the inspection. Note, that’s not if the inspector is satisfied with the inspection but if YOU are not satisfied. So write that down in the addendum.’

The next big consideration will be closing costs. Once I've negotiated and we come to a meet halfway, I tell them I’ll accept if they’re willing to cover all of my closing costs. You may not realize how much closing costs actually are. They can be as much as 2 to 2.5% if you're getting it on a loan. On a cash deal, they're substantially less. You want to push them to cover closing costs or at minimum split the closing cost 50/50. 

Finally, you want to ensure that the agreement has everything that's included in the purchase.  Sometimes they'll have a washer, dryer, dishwasher, oven, fridge, furniture, etc. I'm not saying all of those things need to go with the purchase, but I am saying if you want them to be that’s another great place to negotiate. So if they've got those things and you want them to stay in the property, push for those in the negotiation and make sure it’s in the addendum or in the area that you can put everything that should come with the property. 

What I've learned from for sale by owner deals that I've closed is you can never write too much. Last year I did a for sale by owner on a huge property. Our addendum was an entire page worth of stuff that I wanted to make sure was included in the purchase. There's nothing wrong with being over the top, especially if they've agreed to it. Make sure all of those things are added to the addendum or the area where you're able to include what comes with the property.

So make sure you've got all of those things: your purchase price, closing date, inspection timeframe, earnest money (keep earnest money as low as you can and dependent on an inspection that you're happy with). As long as you've got everything that you want included in the purchase listed, you can go over the top if you want and as long as you've got closing costs set up the way that you want them, preferably with the seller paying for them. 

If all of those things are in there you are set and you don't have anything to worry about. The other thing I want to emphasize is if you put the purchase dependent on an inspection that you are pleased with at any time in the deal you can bail. That gives you this huge safety net so that you've got an exit strategy. 

Make sure that your earnest money stays with the title company, not the seller. Be clear in the addendum so that if the deal does go bottoms up it will be easy to get back your earnest money. I always hear of people losing their earnest money and that is insanity to me. You must protect yourself so that you don’t lose out if you need to bail on the deal. 

Step 5

My fifth step is to deliver on the commitments that you made. Once you've got the paperwork set up, you’ve promised to go through with the deal. Become someone that if you say your word is good and you're gonna close on a property that you do it. If you go into a negotiation and promise all these things, come through with it. If you don't, you'll gain a reputation. Even if that reputation doesn't follow you I promise it'll mess with your psyche closing that next deal. 

So be a man of your word. Once you say you’ll close, get the terms worked out where you need them to be, then go through properly. Be a buyer that a seller loves to work with. You form that good relationship you want and then come through.

By now you should know the answer is no to this question: do you need a real estate agent to buy a house? I hope you have a ton of success in closing on all of the for sale by owner deals that are coming your way. My goal is to help you to create a huge passive income for yourself. Thanks so much guys and have a great day.