Buying a House Without a Realtor in California

The democratization of real estate listings on the internet has made it much easier for tech-savvy buyers in California to begin their search without a Realtor. Homebuyers are increasingly choosing online home buying experiences and digital tools rather than a traditional Realtor.

There are pros and cons to buying a house without a Realtor in California though. Before you make the decision to go it alone on the largest financial transaction of your life, make sure you understand what those benefits and risks are before you start your home buying journey.

Below we highlight what you need to know.

Pros of buying a house without a Realtor

• Greater control of your home buying process
• Less interaction with pushy Realtors
• Lower commission fees

With the rise of e-commerce and online shopping experiences across various industries, it is no surprise that consumers are accustomed to greater control over their purchasing experiences. The same rings true for home buyers in California who prefer handling a greater portion of their home search online before having to deal with a pushy traditional Realtor. 

Buyers today have a clear vision of the type of home and finishings they want in the space. In fact, many buyers find it strange for a Realtor to follow them around and comment on how nice the flooring is or how beautiful the views are. 

In addition to a change in how they want to shop, some buyers believe they will get a better deal or pay less in commission if they buy a house without a Realtor. In reality, this is rarely the case. Unless a buyer purchases directly from a for sale by owner, the listing agent will get the full commission and buyers will not get a better price because of it.

While the majority of buyers begin their search online and engage a Realtor later in their search process, 89% of US buyers still purchase a home through a real estate agent according to a 2020 trends report from the National Association of Realtors (NAR). 

One of the reasons for this high percentage is that buyers desire expert advice when it comes time to make an offer. 

Risks of buying a house without a Realtor

• No access to historic market data 
• No expert advice on negotiation strategy
• Greater information leakage to seller’s agent
• No recommendations on related professionals
• No assistance with legal paperwork and deadlines

While you may be averse to hiring a Realtor, there are numerous risks if you go through the process of buying a home alone, and many of these risks relate to the lack of expert advice that would make your purchase easier and potentially more affordable.

First and foremost, when purchasing a home without a Realtor, you lack the detailed comparable market analysis and sales data that help you triangulate on fair value for the property. These insights can be the difference in getting a great deal or overpaying.

Second, when negotiating directly with listing agents, buyers miss out on having an objective advocate in negotiation strategy. Buyers also open up the risk of inadvertently giving away too much information when speaking with the listing agent. These missteps or misspeaks could cost you thousands of dollars on your purchase.

Finally, buying a home without a Realtor can be an administrative headache and raise additional legal challenges if you miss a deadline. There is a mountain of paperwork and time-sensitive contingencies involved in a residential real estate purchase in California. 

Seasoned Realtors help buyers navigate this process and add a tremendous amount of value at each step. Whether it’s completing a task on time or being connected with related professionals like inspectors, an experienced Realtor can keep you out of hot water and on track to a smooth purchase.

Alternative to traditional Realtors

Thanks to technology, there are now alternatives to hiring a traditional Realtor or broker in California. Tech-enabled brokerages offer home buyers digital buying experiences with the ability to seamlessly collaborate with their buyer’s agent online. 

These new brokerage models offer the best of both worlds - all of the expert advice of a Realtor without the high-pressure sales style of a traditional agent.

How to save money buying with a Realtor

For California buyers looking to get a better deal with lower broker fees, they can easily achieve this while also having the representation of their own buyer’s agent. Buyers should choose a Realtor that offers a commission rebate. 

Simply put, a commission rebate is when a buyer’s broker gives a portion of their commission back directly to the buyer. For example, Prevu in Los Angeles, offers the largest commission rebate in California, giving buyers who work with their agents up to 1% of their purchase price back with the company’s Smart Buyer Rebate.

Prevu Real Estate, Inc. is a licensed real estate broker in California, license number 02134758.