How to Buy a House With Cash, Without a Realtor (And Is That A Good Idea?)

DISCLAIMER: This article is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice. HomeLight always encourages you to reach out to an advisor regarding your own situation.

The time-honored real estate saying “Cash is King” conjures images of opulence and limitless possibility — jeweled crowns, velvet robes, gold coins pouring from the sky. The reality might not be quite as cinematic, and while having enough cash to simply buy a house outright does not do away with all the hurdles of homebuying, it certainly helps the market to feel more like your proverbial oyster.

If you are lucky enough to have that kind of cash on hand, or burning a hole in your pocket as the case may be, you might be wondering … why even work with a Realtor®? What does the homebuying process look like without one?

To answer these questions and more, we’ve put together a comprehensive list of steps to consider on the long road to buying a home with cash and without the help of a Realtor® or a real estate agent who is licensed to help people like you buy homes and walk them through the negotiation process, step by step (note that a Realtor® is a professional member of the National Association of Realtors® or the NAR). And that’s not something to give up lightly.

A word of caution to the reigning monarch if you decide to rule this process alone — take a minute to consider what you’re giving up!

How to buy a house with cash without a Realtor

Finders keepers

First things first: find the house. 

You may know the dream characteristics of your future home like the back of your favorite Pinterest board, but until you have found The House you want to buy, you still don’t have a house … so let’s start there.

Your deciding factors should include considerations such as proximity to work and social life, age and upkeep of the house, school district, distance to amenities, neighborhoods…the list goes on. To get the widest access to homes available for sale, you’ll need to be able to tap into the multiple listing service (MLS)

Even though some of the above concerns might not make your list (done with school and never having kids? School districts might not matter quite as much), what will inform your search is how much money you have in cash and what real estate is worth in your area.

To get a feeling for the market, take a look around at what is on offer by searching public listings online. Visit some open homes in your desired neighborhood, and get a sense for the local prices.

Even at this early stage, we have a warning from Florida-based agent Brenda Sheets who has an impressive 18 years in the business:

“We have a saying: the “A” in Zillow is for accuracy.”

Because you won’t have an agent retrieving search results on your behalf from the MLS, you will have to limit your search to less-vetted sites. Set your searching expectations accordingly, and don’t get too excited before you’ve meaningfully followed up on a promising-looking listing.

Binding offer

If you’re satisfied that the property is the one you’re willing to throw all your sweet, sweet cash into, then it’s time to make a compelling offer!

The offer document will not only state how much you are willing to pay for the property (and when); it will also state any contingencies to be included in the purchase agreement if the seller agrees to everything.

Remember: this document will become legally binding if the seller accepts it, even if you didn’t really understand what you were writing or forgot to add an important detail about the unfinished flood-prone basement. Make sure the document meets the highest standards required for real estate in your state (and if you’re not sure what those are, it might be wise to hire an agent to just write your agreement — or a lawyer, more on that below!).

Lawyer up

We get it — you want to save money — and one of the ways to do that is to avoid paying more people to help purchase your home. However, any documents you create in the course of purchasing a house (even something as seemingly simple as an offer) can become legally binding.

That means it’s less of a question of “do you want to hire a lawyer” than a question of “do you want to write your own DIY contracts and trust yourself to be your own lawyer?” It’s entirely your call, but understand that you could be putting yourself at considerable risk by forgoing representation when buying a home.

Self protection

Decide how you want to protect yourself. Will you get an inspection (most experts recommend that you should), do you know what to look for in a walkthrough, and what can you learn from the seller before making your offer?

Figure out what types of inspections you’ll need by doing some research into the housing stock in your area. Specialized inspections might make sense depending on the age and features of a particular home, but looking at broad issues in your local market is a great way to get a feel for what you might be up against.

Consider including an inspection contingency in your offer. Inspection results are incredibly important — if the roof looks fine, but the inspection reveals some major flaws, an inspection contingency will allow you to walk away from the deal with your earnest money intact in the event that you aren’t able to negotiate on roof repairs or reduce the price of the home. Of course, the roof is not the only major fix you’ll need to be aware of — the list of features to inspect is a long one.

In addition to inspections, you’ll want to consider getting an appraisal to determine the value of the home. Love at first sight is real, but so are cosmetic tricks and simple curb appeal fixes. Take time to figure out if what you’re spending is worth what you’re getting, especially if the market in your area is favorable to buyers and you might have wiggle room to negotiate some more.

You should also ask the seller for a seller’s disclosure, though not every state requires them. This document can give you information about any known issues or recent repairs. These can include things like termite history, water, and mold damage, plumbing or electrical problems, or other structural issues.

Remember, though — the seller can only disclose what they know — it’s up to you to do more sleuthing on the house (that is, get an inspection) to fill in any blanks or incomplete information. And if you live in a state where seller’s disclosures are not a thing, then you’ll want to make sure you take extra care to investigate the home’s possible issues.

Finally — ownership! Some sellers may not have a clear title to sell the home, whether due to title defects or back taxes owed.  If you’re going into this process without representation, make sure the seller actually has the right to sell the house and that your offer protects you through built-in contingencies and owner title insurance.

Start the title review process

You will also likely need to hire a title company.

A title company will go through a title review process, which will check to see whether the home’s title is clear — meaning there are no judgements, liens, missing heirs, or any other issues with the home’s ownership. If you buy the house without checking the title, you could open yourself up to a world of hurt via ownership battles, outstanding debts, or angry (no-longer-missing) heirs.

Order the inspection

If you asked for an inspection (and please say that you did!), then there will typically be an agreed-upon window of time (known as a contingency period) in which you need to get one done. Make sure to schedule your inspections within the window of time allotted so that you can bring up any issues with the seller.

If the inspection reveals any damage or wear-and-tear that makes you feel the house is worth less than you originally offered, you can try to negotiate repairs or renegotiate the price.

Arrange for the appraisal, if you’re getting one

Appraisals are not required for a cash purchase because the only person whose money you’re risking is yours. However, some buyers still want to get the house appraised, especially if they’re working without an agent and don’t have a great sense of the market.

If your appraisal comes in lower than your offer, meaning you’re overpaying for the home, you’ll need to decide whether that’s a deal-breaker, how to handle it with the seller, and whether it’s worth going through the process of renegotiation. As a general rule, people do not like it when you attempt to take back money you’ve already offered them, so get ready for the renegotiation process to be a little socially sticky and uncomfortable — or to come up with the money to bridge any gaps yourself.

Walk through with caution

The final walkthrough is your last chance to make sure, in person, that the house is being sold in the condition it was represented as being in.

Did all the requested repairs get made, and do those repairs seem up to the standard that you hoped? Did any damage happen to the home when the seller or tenant moved out? Did lightning strike the roof, and is it currently burning over your head (and on a more serious note — do you smell smoke)? Go through the final walkthrough slowly, be meticulous, and keep your eyes peeled.

A great way to ensure you’re doing the best walkthrough possible, especially if you’re doing it alone, is to take some trusted advice and use a walkthrough checklist. Some items might seem nitpicky or impractical — but no concern is too small or question too dumb if it saves you unexpected headaches (and costs!) upon closing.

Take ownership at closing

One of the best things about using cold, hard cash to purchase a house is that you don’t have to wait for underwriting and a mortgage loan, so you can get to the closing table faster. If you choose to do this without an agent, you will need to hire a title company, real estate lawyer, or another official entity to oversee the closing; when you have an agent, they can typically help you find someone to facilitate closing for you.

Whichever closing agent you choose, they will be in charge of double-checking and making legally sure that 100% of the house ownership transfers to you at closing.

Why should you use a Realtor to buy a house with cash?

Buying with cash can uncomplicate the homebuying experience and maybe even save you a bit on house price.

However, buying a home without a Realtor® generally doesn’t make much sense since buyer agent commissions are most often covered by the seller, meaning this service is typically 100% free for buyers.

Plus, if you do decide to forgo using an agent, you may find yourself hiring a lawyer to help with contract review to ensure that everything is above board and legal, costing you more money.

Because one mistake can cost thousands of unexpected dollars for a buyer, most buyers tend to choose to work with an agent even when buying with cash. In 2021, 87% of buyers used a real estate agent, and 90% of those indicated they were happy enough with their agent to write a positive review.

Real estate agents make their livelihoods out of helping buyers find and secure houses that perfectly suit their needs. From the outside, the work of an agent can look like easy money — but the deeper you get into the homebuying process, the more you might realize the benefit of having an agent to help you wade through all the rules, red tape, and research involved.

Read on for reasons why you might want to work with a Realtor® after all.

It’s free

As we mentioned above, most buyer agent commissions are paid by the seller, meaning you likely won’t pay a dime for your agent’s hard work. It’s hard to imagine a better deal than free! Why wouldn’t you take advantage of free expertise?

Try and try again

One big reason to work with a Realtor® is that your first (or fifth) offer might not get accepted, especially in today’s competitive market. It may be easy to imagine guiding yourself through the process of finding, researching, and making an offer on one home — but the process can take time. You may need to make offers on multiple houses before you land an accepted offer. The ability to keep making offers is a big reason why working with a Realtor® makes sense, Sheets tells us.

“It’s a numbers game. You keep identifying properties, you keep submitting offers, and those are things that if you did not have a Realtor® — that’d be very, very difficult, if not impossible, to do”

Working with an agent means you have a teammate to share in the disappointment and setbacks of a competitive market. An experienced agent knows that failure is simply part of the game; after an unaccepted offer or two, they are ready to pick you up, dust you off, and continue with the hunt.

All cash, all the way?

Today, interest rates are still low, meaning it is relatively cheap to borrow money, especially if you have a sizable down payment in cash. An agent can offer valuable perspective on whether paying all cash in one fell swoop is necessary in your market, or if talking to a lender about a down payment and a mortgage may serve you better (and get you more house!) in the long run.

An agent, especially one with a large amount of experience in your particular market, has a long, nuanced understanding of when paying all cash is a benefit, and when it should only be part of the pie!

MLS merriment

The MLS, or multiple listing service, is a database of homes that are listed for sale; created by and for real estate agents. Only agents have direct access to MLS listings, and the database comes with its own set of operating criteria, access to “coming soon” listings that might not have hit the market, and the latest market data about every home. Because the database has its own logics and is chock-full of data, it is standard for agents to craft a personally tailored search criteria for you so that you receive only the best and most pertinent updates from MLS itself.

Chris Slinker, a Milwaukee-based agent with 14 years of experience, says that working with buyers to understand their needs and then translating those needs into personally tailored MLS results is one meaningful way that agents streamline the house hunting process for buyers.

“I try to get a buyer’s MLS results so perfect that, when they get my automatic emails from my search on MLS, they don’t want to look anywhere else because they feel like I’ve touched all of their needs.”

Working with an agent not only gives you access to a huge comprehensive database in the form of the MLS — it also gives you a guided approach to searching that database and seeing the most relevant searches possible for you.

Market rate

When you are looking at buying a home, it seems logical to simply regard the listing price as the price — that’s how it works in supermarkets and clothing stores, right? Unfortunately, that assumption might serve you poorly when it comes to shopping for houses.

In hot markets, it’s typical for houses to sell for between 5% and 10% over the asking price. How much the house you’re interested in is currently worth is a mixture of a lot of factors: housing stock availability, the conditions of homes in the area, the desirability of the neighborhood…the list goes on.

An agent experienced in your market will be able to provide historic and current context for prices, and they will know whether the home you’re looking at is priced fairly, overpriced, or underpriced for the market.

Competitive edge

An agent can use their connections (hard-won over years of experience) to make sure you’re putting in the most competitive offer possible on the home you want. Sheets explains:

“When you’re an experienced, full-time Realtor®, you build relationships with other Realtors® in your area. So when you’re up against a multitude of other offers, if you have a relationship with [the listing agent], you could have a conversation about ‘What does my buyer hypothetically need to do to put forward a strong offer?’”

Working with an experienced agent lets you use their social network and know-how to put your offer in the best position possible.

Only good offers

A Realtor® will write a professional offer for you, and they will make sure all the necessary protections are baked into that offer. Instead of going through the hassle of getting your own real estate license (we promise that this is costly, in addition to being a huge headache) or hiring a lawyer to draft your contract, consider what legal snarls you are avoiding by getting a trained agent to write you an iron-clad offer.

Inspect spectacular

An agent can help you understand what inspections are important, both to your house in particular (bless every agent who saw signs of damp where clients only saw bad paint) and in the area generally.

An agent will have region-specific knowledge and know important details about common problems in homes, such as whether insuring roofs from a certain era is difficult, what you need to know about the risks wildfire poses to your property, or if homes in the area are known to have asbestos issues or lead paint.

Agents can also recommend quality professional inspectors and help to schedule them within the contingency inspection time period built into your offer.

Contingency pal

If the house is overpriced for what you’re getting, or your inspection reveals flaws that need addressing, your agent is your biggest and first line of defense! With their guidance, you can understand the implications of inspection issues and the reasonable costs of repairs or appliance replacements. They will work with the seller and the listing agent on your behalf to renegotiate on price, repairs, and closing times to ensure that you are getting what you’re paying for.

Remember, the seller will almost certainly be working with an agent, so it pays to have an agent on your side making sure you’re getting the best possible deal from a professional perspective. As Sheets puts it:

“When each side — buyer and seller — have their own professional representation, generally it’s going to allow for a smoother and more productive negotiation.”

Agents can also come with you to the closing table and ensure all the i’s are dotted and t’s are crossed — and if they are not dotted and crossed perfectly, they can help flag concerns and find solutions to any problems that might emerge.

Walkthrough buddy

An agent will come with you to the final walkthrough and bring all their highly attuned skills to bear on whether everything is as it should be.

Two pairs of eyes are definitely better than one when noticing damage or poorly done repairs, but with a professional agent in your corner, you have all their knowledge and experience informing their penetrating gaze. Again, if either you or the agent see something, they will say something, taking the responsibility of politely communicating and negotiating any contract issues off your shoulders.

Post-closing process

The work of a good agent is never done! An agent’s involvement in all aspects of the homebuying process means they interact constantly with contractors, cleaners, movers, repair people, and so on. This results in agents with personal relationships and proven recommendations that beat a Yelp review hands-down (sorry Yelp — no hard feelings).

Once the keys are yours and your move-in checklist is underway, you’ll be able to count on your agent’s experience and knowledge base to point you toward professionals who will make sure your final move-in process is the flawless dream you deserve.

Cash or not, working with a Realtor is a smart choice

Cash may be king, but the jewels in its crown are often the professional knowledge, personal connections, and market insight that comes from an established Realtor®. Plus, hiring an agent is most likely free for you as the buyer.

You can do the process alone — and if you choose this path, there are lawyers, title reviewers, and Google search results to help you reach your goal. If educating yourself on the ins and outs of the homebuying process and taking on all the risk of going it alone sounds fun to you — forgoing a Realtor® and buying with cash might be the right path!

On the other hand, if you want to get the best possible insight into the types of homes and markets that interest you and take some of the work off of your own plate, you should consider working with a Realtor®. You’ll be able to rely on their skills and connections, rest easy knowing a professional is handling things, and let them guide you through one of the biggest (and most challenging!) financial decisions of your life. The choice is yours, Cash King — may your reign in your new castle be long and prosperous.

Header Image Source: (Eric Ardito / Unsplash)