🔑 Key takeaways
The simple answer is no. You aren't legally required to hire a real estate agent to buy or sell a home, unless you're bidding on certain government-owned foreclosures.
However, the vast majority of buyers and sellers choose to work with a real estate agent to handle their transactions.
It's easy to understand why: Real estate transactions are confusing and carry high financial stakes. A mistake could cost you thousands, or even lead to legal trouble. For example, a seller who fails to disclose required information about their property could face a lawsuit.
Even people who have previously bought or sold a home may not know enough about the process. Homeowners stay in their home for 13 years on average, so they may have completed one deal in more than a decade. An active real estate agent typically closes around 13 transactions every year — though some handle far more.
Benefits for sellers
Benefits for buyers
🗺️ Expert knowledge of your local market
Establish a fair price based on your home's value and your goals, plus list your home on the MLS
Make a competitive offer based on local market conditions, plus provide access to off-market listings
⚒️ Referrals to trusted professionals
Source proven professional contractors, stagers, and photographers to get your home market-ready
Refer a trusted home inspector to help you avoid surprises
🤝 Help with negotiations
Counter a buyer's requests without losing the deal
Request concessions or contingencies
📋 Familiarity with paperwork
Help demystify contracts, deadlines, and the purchase agreement
Support the mortgage process
🔒 Fewer legal and financial risks
Assist navigating regulations such as required disclosures
Advise you about how to avoid losing earnest money
We surveyed agents across the country and found that, on average, commission costs 5.45% of a home's sale price.
At closing, the seller typically pays commission out of their proceeds, splitting it between the buyer's agent and listing agent.
The fee covers the listing agent's out-of-pocket expenses for services such as professional photography and marketing assets, as well as the buyer's agent's work in completing the transaction.
Since buyers don't directly pay for their agent's commission, there's no financial reason for them to avoid working with a real estate agent.
In dual agency, one agent represents the buyer and seller. Because the agent would receive the full 5-6% commission rather than splitting it, some agents are willing to discount their rates for dual agency sales.
However, dual agency poses a potential conflict of interest. Because the agent is representing both sides of the transaction, it's difficult — potentially impossible — for them to serve the best interests of both parties, which are typically at odds with one another.
Because of these risks, dual agency is illegal in eight states: Alaska, Colorado, Florida, Kansas, Oklahoma, Texas, Vermont, and Wyoming.
Learn more about dual agency.
Though most buyers and sellers benefit from hiring a real estate agent, an agent may not be necessary in some circumstances:
- You already have a buyer picked out. If you don't need help finding a buyer or marketing your home, you might just hire a real estate attorney or low-commission agent to finalize the sale.
- Your home is in poor condition. If your home has serious damage, such as a leaky roof that wouldn't pass inspection, a buyer might struggle to get approved for financing to purchase it, as banks often avoid loaning money for properties that need major repairs. Sellers who can't afford to make repairs might be better off selling to a company that buys houses (though we always recommend speaking with a real estate agent first to examine your options).
- You need to sell ASAP. In some areas, selling your home on the open market can take several months. Sellers who are in financial trouble might want to sell to a company that can close faster.
- You want to handle the sale yourself. Experienced buyers and sellers may be comfortable navigating a real estate transaction solo — especially if you're a seller in a hot market where buyers are moving fast.
Finally, some sellers simply don't want to pay an agent's full 2.5-3% listing fee. If that's the case, Clever has a nationwide network of top-rated real estate agents who have agreed to work for a flat $3,000 listing fee — or just 1% if the home sells for more than $350,000.
Buyers familiar with real estate transactions may feel comfortable acting without an agent. Whether you're experienced enough to go it alone, or are taking a first shot at buying solo, follow these general steps that apply to most home sales:
- Get pre-approved for financing. This can speed up the process and make your offers more attractive to sellers.
- Research your local market. At a minimum, you should understand how competitive your market is and the fair market value of property you plan to buy.
- Tour homes. Use websites like Zillow and Redfin to browse listings, schedule tours, and find upcoming open houses.
- Review sellers' disclosures. Before making an offer, request the seller's disclosures about issues like lead paint, mold, or past flooding. State regulations determine what sellers must tell buyers.
- Make an offer. You'll have to decide whether to offer earnest money, and you'll need to sign a purchase agreement. Additionally, you'll have to decide what contingencies, if any, to include in the contract. Most buyers include an inspection contingency so they can walk away if unexpected information about the house comes to light.
- Hire a home inspector. If the inspection turns up anything unexpected, you can negotiate with the seller.
- Close the deal. Your mortgage lender will require the completion of a series of steps, including an appraisal, before you're able to close the sale. Some states also require buyers to hire a real estate attorney to help with closing.
For sale by owner (FSBO)
Experienced sellers may take a do-it-yourself approach. FSBO sellers often employ specific vendors, such as flat-fee MLS companies that can assist with listing a home. Learn more.
If your home is almost market ready, you might be eligible for an instant cash offer from an iBuyer. Learn more.
Cash buyer companies
For badly distressed or vacant homes, cash buyer companies can offer 50-70% of fair market value and close fast. Learn more.