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Searching for Your Next Home – Using a Real Estate Agent vs. Going it Alone

House Hunting

As a real estate agent, I work with homeowners who want to sell their home as well as future homeowners who are looking to purchase a home. In both cases, the sellers and prospective buyers have a choice between going it alone, or working with a professional Real Estate Agent. In today’s blog I’ll focus on the pros and cons of house hunting with and without an agent.

A home buyer,  especially a first-time home buyer,  may be reluctant to enlist a Real Estate Agent to help them in their home search for a number of reasons. When I was a young, first-time buyer in the Huntsville market (long before I worked in the real estate field), I didn’t even realize that buyers could enlist an agent! (Or if I did, I incorrectly assumed that I’d have to pay them out of my already-tight budget.) So I did house hunting on my own, and I simply called the agent on the sign of the house I wanted to buy. I didn’t realize that the listing agent (i.e. the seller’s agent who listed the house on the market) essentially became my agent as well. I’ll talk about this more as we go along, but for now, let’s look at the main reasons why some home buyers try to avoid working with a real estate agent.

Reasons Home Buyers Avoid Real Estate Agents

Reason 1: Pressure

One of the most common reasons I hear is that the buyer doesn’t want to be pressured by an agent.  Buying a home is the biggest financial commitment that most people make in their life, so the desire to limit external influences from the process is certainly reasonable.  The buyer may fear an overwhelming onslaught of emails and phone calls from their agent, especially if they aren’t in a hurry to buy.

If you choose to take advantage of a real estate agent, try to pick an agent that you feel will be your best advocate, and make sure you communicate with the agent openly about your time-frame and the level of communication you expect. It’s OK to tell your agent to “back off” if you’re feeling pressure!  But a good agent assesses the buyer’s goals upfront, and presents options and information to their client, not pressure. For a home buyer, your agent is part of your team. They should know what your needs are, understand your price range, and be a reliable source of advice throughout the process.

Reason 2: To Save Money

Probably the biggest reason people are reluctant to use an agent is the desire to save money. Real estate agents work on commission, so at least on the surface, it stands to reason that if you could buy your home without an agent, you’d save some money. But this is rarely the case! First-time buyers may not even realize that the seller typically pays all the commissions involved when a home is purchased, so the buyer isn’t writing checks to have an agent assist them. But first-time buyers sometimes think that they’ll save money if they work without an agent when buying a listed house or when buying a house that’s for sale directly by the owner. Let’s examine what happens in each of these cases.

Purchasing a Listed House without a buyer agent – Can you save money?

By far, most houses sold in the United States are listed by a professional real estate agent. Only 6% of homes sold on the open market are sold by owner, according to a recent survey conducted by the National Association of Realtors.  So if you, as a home buyer, purchase from among the vast majority of homes that are listed by a real estate agent, the seller of the house has typically negotiated a fee with their listing agent, and that fee is built into the price of the house. The seller’s agent fully expects to split their commission with the buyer’s agent. If there is no buyer’s agent, the listing agent essentially acts as both the buyer’s and seller’s agent, and receives the full fee. First-time buyers should be aware that the fees are almost always set by an existing contract between the seller and their listing agent. There’s no reduction in the price of the home just because the buyer came to the table without an agent. So the buyer doesn’t see any cost savings by going it alone when purchasing a home listed by a real estate agent.

Purchasing a For Sale By Owner House without a buyer agent – can you save money?

Now I know you’re probably thinking “what if the buyer gets lucky and finds the perfect home and it’s For Sale By Owner?  If the buyer doesn’t have an agent, and the seller doesn’t have a listing agent, they’ve both saved a bit of money, right?”  Well, let’s look at the reality of this assumption. First, you have to assume that the buyer has the time and energy to search for, visit, and enough experience to assess the value of homes that aren’t listed. Listed homes appear in the Multiple Listing Service (MLS) database, which feeds directly into countless marketing websites, mobile apps, social networks and other home buyer tools. (For an example of a MLS feed, you can visit my business web site, which connects back to the MLS to allow a visitor to search listed houses.)  In addition to getting the house into the MLS, a professional Real Estate Agent will have done a comparative market analysis of the listed home, so you have some assurance that a lender will finance a qualified buyer.

In contrast, the For Sale By Owner home can’t be listed in the MLS. The seller has to advertise his house the best he can, which typically means he puts a For Sale By Owner sign on his front lawn. So it’s harder to find the a For Sale By Owner house that meets your goals in the first place. And it’s not uncommon for a For Sale By Owner to be overpriced for the market. Perhaps they consulted with a real estate agent who assessed their house’s value for less than they wanted to sell it for.  This could mean you go through the work of applying for a home loan and discover that no lending agency will finance the house at the seller’s asking price!  A buyer without an agent purchasing from a seller without an agent is facing extremely long odds of saving any money due to the high potential for the loss of time, the potential for overpaying, and the potential for not getting the best home currently available on the market that fits their needs and goals. Do you, as a home buyer  really want to make your decision by considering only a small fraction of the available homes?

Reason 3: The Internet

The internet has changed almost every aspect of commerce over the last two decades.  Some buyers may think that using a real estate agent is an obsolete notion, since the internet has made so many other markets and means of commerce obsolete.  But in reality, the real estate business has changed with the times. Real estate agents have access to a powerful array of tools to enable them to assist the home buyer like never before. The most important tool an agent has is knowledge and experience, but right behind that is access to critical information. The MLS website services that the public has access to do not provide the same level of information to the public that a professional Realtor has.  A Realtor also has other resources, such as a daily notification of houses that just came onto the market.  I personally also take part in a weekly caravan to visit and walk though homes that recently entered the market.  So while the internet can be a great tool for you and your real estate agent to communicate, your odds are better utilizing a partner who has even greater access to information than you have.

The Security Issue

One issue that affects both listed homes and homes that are For Sale By Owner is security.  Homeowners have become increasingly wary of letting strangers into their homes during the selling process due to the incidence of criminals using the opportunity to case homes for valuables.  A buyer without an agent may find it difficult to even get an appointment to view a house without a real estate agent.


Well, this blog went on longer than I expected!  I think that’s because I’ve been in contact with several first-time buyers recently and I’m seeing them struggle with these very topics. I remember well my own first home buying experience. It was both incredibly exciting and incredibly scary. I wish someone had told me all the things I’ve just shared with you! Share with me your own home buying experience in the comment section below! Other Resources for Huntsville-area homebuyers:  http://www.valleymls.com

House Hunting As a real estate agent, I work with homeowners who want to sell their home as well as future homeowners who are looking to purchase a home. In both cases, the sellers and prospective buyers have a choice between going it alone, or working with a professional Real Estate Agent. In today’s blog …

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