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Buying a house is a major step, and planning to purchase a home can be a lot of fun. You get to figure out where you’d hang your favorite artwork, plant a vegetable garden, put the PlayStation — and maybe contemplate taking on some DIY projects yourself.

But there’s another, more nuts-and-bolts aspect to your pursuit of the American Dream: how to budget for a house. Almost 66% of people in the U.S. were homeowners in the fourth quarter of 2025, according to the latest Census data. That’s a good indicator that buying your own home is within reach.

Doing so will likely require you to be smart about your finances in terms of saving and taking on the responsibility of owning a property. To help you be successful in this pursuit, read on for the intel you need, such as:

•  How do I know how much house I can afford?

•  What are the costs/fees to consider?

•  What will my ongoing costs be?

•  How can I budget for a house?

Upfront Expenses

First, consider how much you would have to fork over if you find that perfect center-hall Colonial or loft-style condo. Once an offer on a new home is accepted, there are certain things the buyer needs to pay for right off the bat and, in most cases, out of their own pocket. These are called upfront expenses. Here are a few.

Down Payment

You may have heard of the traditional 20% down payment guideline, which helps you avoid paying private mortgage insurance (PMI) on applicable loan programs. A higher down payment may also result in better mortgage loan terms, such as a lower interest rate, which may translate into lower monthly mortgage payments.

Yes, it’s a lot of money to put aside, but if you can swing it, in the long run, applying a 20% down payment will likely save you from paying thousands of dollars in additional mortgage interest over the life of the loan. Can’t pull together that big a chunk of change? Look into options of a mortgage lender with a lower or no down payment:

•  The minimum down payment for a first-time homebuyer on a conventional loan can be as little as 3%. You may also need a strong credit profile to qualify, and lenders may set their own minimum credit score requirements.

•  A Federal Housing Administration (FHA) government loan that is open to everyone typically requires a down payment of at least 3.5%.

•  Department of Veterans Affairs (VA loans) or U.S. Department of Agriculture loans may allow eligible borrowers to finance up to 100% of their home’s cost. In other words, no down payment is required.

It’s worth noting that, regardless of the size of your down payment, buying may still reduce your overall monthly expenses, depending on market conditions, interest rates, and individual circumstances.

2% to 5% Closing Costs

You can expect to pay an estimated 2% to 5% of your home price for closing costs and should save accordingly. For example, if you buy a home that costs $300,000, you may be required to pay between $6,000 and $15,000 in closing costs.

Some costs are fixed and not tied to the price. In these cases, the percentage can be higher for the lower range and lower for the higher purchase price range.

What exactly do closing costs comprise? This can include bank charges, such as origination fees and any points you may have purchased to buy down your interest rate, and costs such as the appraisal fee and a title search.

Keep in mind that there are alternatives to paying the closing costs out of pocket, such as requesting a seller credit, requesting a lender credit, or tapping into an applicable down payment assistance program. These options can help you minimize this expense.

Moving Costs

Don’t forget when budgeting for buying a house that you will need funds to move in. Unless you’re lucky enough to have a generous pal with a van, you’re probably going to have to hire a moving company. The average cost of a long‑distance move in 2026 is typically around $3,020, though prices vary based on distance, weight, and service level.

These costs can vary widely, of course. If you are moving with just a bedroom’s worth of furniture versus a whole house, your price tag will be lower. It’s wise to comparison-shop for moving companies and factor this expense into your own budgeting for a home move.

If you’re relocating for work, check with your company to see if it offers a relocation package to help cover some or all of the moving costs.

New Furniture and Appliances

Your new house may not have the same dimensions and style as your old house. This could mean that you need to buy new furniture and appliances. When budgeting for buying a house, you might want to talk to friends or relatives who have moved recently and ask about unexpected expenses. For example, it’s not uncommon when you move to have to purchase items such as new locks, shower rods, and window treatments. These expenses can quickly add up.

You might want to start a savings account for these types of purchases — some of them may be costlier than you imagined.

Recommended: First-Time Homebuyer Guide

Ongoing Expenses

Now that you’ve figured out the details related to the actual purchase, consider the expenses that will accrue once you’re a homeowner. Recurring charges are a vital part of the calculations of how much home you can afford.

Monthly Charges

First, consider how much you’ll be spending every month on your monthly mortgage payment and related costs. Principal, interest, property taxes, homeowners insurance, and other assessments (PITIA) are the components of a mortgage payment. Here’s how it breaks down:

•  P: The principal is the “meat” of the monthly payment amount — paying down the principal will reduce the loan balance.

•  I: Interest is what you are charged for borrowing the money.

•  T: Taxes refer to your property taxes.

•  I: This “I” refers to insurance. This includes both your homeowners and mortgage insurance, if applicable.

•  A: Other assessments refer to things that may apply to the home you purchase, including HOA dues and flood or earthquake insurance.

HOA Dues

HOA dues typically apply to a condo, co-op, or property owned in a planned community.

The charge is monthly (although it could be quarterly or annually), and the funds usually go toward maintaining the community (landscaping, garbage collection, repairs, and upgrades).

Before purchasing a property with HOA dues, consider asking the association for a complete HOA questionnaire. With this, you can assess how healthy the association is, whether there is any outstanding litigation due to structural or other issues, etc. These factors could impact costs down the road.

Maintenance and Lawn Care

Your budgeting probably won’t stop once you’ve moved and settled into your new home. Expenses will likely continue to knock on your door — landscaping, roof repair, and water heater replacement are just a few items that might require ongoing financial consideration.

You may want to budget for 1% to 4% of the cost of your home each year to pay for maintenance expenses. However, deferred maintenance costs may require more funding, depending on the age, quality of construction, and where you live, for example.

Pest Control, Security, and Utilities

The cost of electricity, gas, water, and internet services differs from market to market. This is also true for pest control and services that help ensure your home is secure and safe. You could find yourself paying more (or even less) for these services depending on where your new home is located.

Quiz: How Much House Can You Afford?

Planning Ahead

So, now that you understand the costs associated with homeownership, you can start working on how to budget for a house.

Ideally, you’ll want to cover your home-buying costs and then be able to afford your monthly carrying costs without racking up debt. The standard advice is that your monthly housing expenses should account for up to 28% of your monthly pretax income. Given how expensive some housing markets can be, it’s not uncommon to find people spending more than that right now.

Here’s some advice for figuring out what you can afford.

Target Mortgage Costs

Do your research on the different types of mortgage loan programs. Determine your price range based on the current interest rates. Find the programs that may best suit you so you’ll feel confident you can bid and afford a home once you have your down payment saved. Don’t forget to factor in those other PITIA expenses mentioned above as you think about your own monthly income and cash outflow when you’re a homeowner.

Build a Budget

Once you have these costs calculated, you can then start budgeting for buying a house. You’ll want to save for your down payment while paying current bills and handling other financial obligations, of course.

•  Create a line item budget. You’ll want to note how much money you have coming in and how much is spent on your needs (housing, food, medical expenses, debt repayment). You’ll see what’s left for your wants (think travel, dining out, clothes, and entertainment) and start saving money for your future home.

◦  Don’t skimp, though, on establishing an emergency fund. In a pinch, these funds can keep you from using your credit card and running up even more debt.

•  Assess where you can save more. To ramp up your savings for your house, look for ways to economize. Could you drop a subscription or two to streaming channels, or perhaps eat out less often?

◦  Also see what you can do to avoid high-interest credit card debt, which can take a bite out of anyone’s budget. You might want to take advantage of a zero-interest balance transfer credit card offer or investigate whether a lower-interest personal loan could help you pay off your debt and save money.

•  Use automatic transfers. Help yourself hit your savings goals by automating payday transfers from checking to savings. That way, you won’t see the cash in your account and be tempted to spend more.

•  Bring in more moolah. If the numbers aren’t adding up to bring your home-buying plans within reach fast enough, consider using windfalls (a tax refund, a bonus at work, or a birthday gift of cash from a relative) to boost your savings. Also think about ways to bring in more income, whether by asking for a raise or pursuing a side hustle.

The Takeaway

Budgeting for buying a house requires thinking about short-term costs, such as a down payment, closing costs, and moving expenses, as well as long-term costs, including homeowners insurance and maintenance expenses. It’s wise to look at both before you pursue a mortgage preapproval or make an offer on a home.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much money should you save before buying a house?

Ideally, you should save enough money for a 20% down payment, although many homebuyers put down less, and some government programs allow you to buy with no down payment at all. You’ll also want to have money for closing costs (2% to 5% of the home’s price) and an emergency fund in case of an unexpected setback.

How much do I need to earn to afford a house?

This depends on the housing market you’re looking at and the area’s overall cost of living. The national average salary is roughly $62,140 per year, which may be able to afford you a $180,000 home. Use a home affordability calculator to explore the numbers for your specific situation.

What ongoing costs should I expect after buying a house?

Homeownership comes with recurring expenses beyond your mortgage payment. You’ll need to budget for property taxes, homeowners insurance, HOA dues (if applicable), utilities, and routine maintenance. Many homeowners set aside 1% to 4% of their home’s value each year for upkeep, plus additional funds for unexpected repairs.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q126-143

Working with a professional real estate agent can make buying or selling a home easier. After all, they are likely to be well versed in the ins and outs of your area, how to best negotiate in the current market, and how to access any other resources (say, a home inspector) that you may need.

While there may be some agents you hit it off with personally, this isn’t a friendship you’re pursuing but an important business relationship. It’s a collaboration that could impact both your finances and your stress level.

No matter which side of a real estate transaction you’re on (buying or selling), it can be wise to have the right professional in your corner. Eighty-eight percent of homes sold in the U.S. involve an agent, according to a 2025 report. (Realtors® are agents who belong to the National Association of Realtors®, or NAR.)

If you’re on the hunt for an agent, it’s important to know what to ask to identify the right match. Read on to learn questions to ask, whether you’re buying or selling a property — or doing both at once. (This is a lengthy list of interview questions for real estate, so pick and choose the questions that resonate the most.)

Table of Contents

How to Interview a Real Estate Agent

First, a bit about terminology: Not all real estate agents are Realtors, but all Realtors are real estate agents.

There are different options for interviewing real estate agents. You could schedule an interview:

•   Over the phone

•   In person

•   Virtually via video conferencing

You might aim to interview at least three agents for comparison’s sake, though you may choose to interview more or fewer.

Create a list of interview questions beforehand to help you stay on track, and begin researching a home loan so you will have a sense of your budget. By the time the interview process is over, you should understand:

•   What the agent’s personality and character are like: Is this person supportive and positive? Do they sound rushed and distracted?

•   What kind of services they offer and what experience they bring to the table.

•   How much you’ll pay for their help.

You’ll learn about how to do this in more depth as you read further.

Recommended: Tips When Shopping for a Mortgage

What to Ask About a Real Estate Agent’s Background

Any real estate agent you choose to work with should have the professional qualifications you’re looking for. But it’s also important to get a sense of who they are as an individual to avoid personality clashes. Here are some questions to ask as you evaluate an agent who might help you buy or sell a home.

1. How Long Have You Been a Real Estate Agent?

It helps to understand how long an agent you’re considering working with has been buying or selling homes. The typical real estate experience of all agents is 10 years, according to NAR.

Working with an agent who’s newer to the profession isn’t necessarily a bad thing. But one who’s more experienced may be more adept at handling any challenges that arise when buying or selling a home.

2. How Well Do You Know the Local Market?

An agent who knows a particular area and its local housing market trends can offer an advantage when buying or selling. Ideally, you should work with an agent who understands the local market and what trends drive it.

The more informed they are, the better equipped they are to do things such as a comparative market analysis, which can give you a sense of how home prices in the area are trending. They will also likely know details such as which parts of town are more prone to flooding than others.

3. How Many Clients Do You Work With at One Time?

This answer can give you an idea of how much time an agent will be able to dedicate to working with you, especially if you ask the follow-up question, “And how many clients do you currently have?”

4. Do You Work Alone or as Part of a Team?

Keep in mind that you may not be working with your agent alone to finalize the purchase or sale of a home. Agents may have a team of individuals they work with, including office managers, personal assistants, or marketing directors, who may reach out to you during the process.

Asking who else you may be connected with can help you avoid surprises if you decide to enter into a working relationship with a particular agent.

5. How Will We Communicate and How Often?

Being able to communicate with an agent is important to keep the process moving. Plenty of agents email and text to keep in touch with clients. If you’re the kind of person who prefers phone calls or in-person meetings, it’s good to identify communication styles up front and make sure they are in sync.

6. Do You Specialize in Buying or Selling?

Some real estate agents may choose to work exclusively with buyers, while others work only with sellers. And some can act as dual agents, representing both the buyer and seller in the same transaction. Dual agency is rare, and it’s illegal in several states. A dual agent can’t take sides or give advice.

The answer to this question will help you get a better idea of whether the agent is attuned to your side of a real estate transaction. Ideally, you want someone who is passionate about your deal, whether that’s finding the perfect house with a picket fence or selling the condo you’ve outgrown.

7. How Many Transactions Did You Close Last Year?

Asking this question can give you an idea of an agent’s overall success rate and the volume of transactions they handle.

The median number of residential transactions agents took part in per year in 2024 is 10. If you’re interviewing agents with closings well below that number, it could be a sign that they aren’t always successful in closing deals. If their number is much higher, it could mean they are very busy, and you might not get as much attention as with another agent.

8. How Long Does It Normally Take You to Close a Deal?

Once the seller and the buyer of a property have signed their purchase agreement, closing on a home can take anywhere from a week (for an all-cash offer) to a couple of months (for offers involving a mortgage) to close. As of late 2025, the average closing time on a house was 41 days after an offer was accepted, according to ICE Mortgage Technology, Inc.

Asking an agent what their average closing time is can give you an idea of how efficiently and diligently they work to satisfy their clients.

If their average closing time is closer to four or six months, for example, that could be a red flag, though some deals do wind up being more complicated than others.

9. What Are the Terms of Your Contract?

Working with an agent means entering into a contract, and it’s important to know what that contract says. These documents may be more common when you work with a broker to sell a home, but there are also buyer’s agreements.

These ensure that if they invest the time scanning the market for you, scheduling walkthroughs, and negotiating on your behalf, you won’t then complete the deal with, say, a relative of yours who just got their real estate license.

When you are selling a house, you’ll sign a document agreeing that the agent will handle the sale. Once you sign a contract, you’re typically locked in to working with them unless they agree to release you.

The listing agreement will last for a set period, such as three or six months. From your perspective, shorter may be better so that you’re not trapped if you don’t like the agent’s services.

10. What Fees Do You Charge?

Closely connected to contracts is the topic of money. How does it change hands? What are you liable for? Historically, real estate agents worked on commission, and the fee was paid by the seller. Now, real estate commission fees are changing, and while sellers will still likely pay agents a commission, there is no guarantee that the seller will pay the buyer’s agent. If you’re buying, you’ll need to discuss a fee structure with an agent before you begin working together. It might be an hourly fee or perhaps a flat rate. Some agents may request a percentage of the home price.

Recommended: Do You Still Need to Put a 20% Down Payment on a House?

Questions to Ask a Real Estate Agent When You Are Selling

If you’re selling your home, here are some questions to ask to help ensure that you partner with the right agent.

11. What’s Your Typical Marketing Strategy?

A real estate agent should have a clear plan for listing and marketing your home in a way that produces the greatest odds of success in selling it quickly and at your desired price point. Let the agent you are interviewing tell you about their strategy and the results it yields.

For instance, does the agent believe in listing at a low price in the hopes of starting a bidding war? If so, what kinds of prices has this achieved? Where will your listing be posted? Will videos be created? Will there be an open house?

These kinds of questions can help you see if you are impressed by and aligned with how an agent likes to market homes.

12. Will You Handle Staging and Prep Work?

If you’re selling a home, staging it could help influence buyers’ perceptions of the property and potentially net you a higher sale price.

Staging is something you can do yourself, but your agent may have a staging company they work with to get the job done.

Asking about staging or small cosmetic updates, such as painting, can help you figure out what you’ll be responsible for to get your home ready for the market. There’s a price tag attached to all improvements, so you’ll want to know the numbers to be better prepared.

13. How Do You Handle Viewings?

The use of digital tools, such as virtual tours, have made properties more accessible to more buyers. A Harris Poll from November 2025 found that 25% of people who plan to buy a home in the next 12 months will use artificial intelligence to visualize design elements or potential renovations.

See if your agent plans to create a virtual tour, but you also want to be prepared for the majority of buyers who want to visit in person. Ask agents how many viewings they typically schedule in a day or a week, how often open houses will be scheduled, and how they’ll be marketed.

Questions to Ask a Real Estate Agent When You Are Buying

Now that you’ve learned the questions to ask an agent when selling, how about the other side of the deal? Whether you’re shopping for a starter home or trading up, here are a couple of important questions to ask a potential real estate agent when preparing to buy a house.

14. What Happens When I’m Ready to Make an Offer?

If you’re a buyer, agents should be able to walk you through how this process works, what to do if the seller makes a counter offer, and what you’ll need to do next if your offer is accepted. You also want to check if they have experience with successfully navigating bidding wars, which can happen in hot markets and with well-priced properties.

Also, check that they can advise you on how much earnest money you might need to pay and how to find a good, affordable home inspector, as these are important aspects of the homebuying process.

15. Will You Help Me With Getting a Mortgage?

This question will shed more light on a prospective agent’s network and experience. Agents may be able to offer recommendations for mortgage lenders. They may also be willing to communicate with your lender if there are questions about the property or the offer during underwriting.

You’re not obligated to use your agent’s recommended lender. In fact, it’s helpful to compare mortgage loan terms and interest rates from multiple lenders to find the option that best fits your needs.

The Takeaway

Due diligence in the search for the right real estate agent may mean interviewing a few of them and not automatically going with a friend of a friend. It’s important to know how to interview an agent and which questions to ask, so you can pair up with the best possible professional as you navigate this major transaction.

If you’re a buyer, once you’ve found an agent, you can turn your attention to next steps: finding a home (and a home loan) that suits your needs.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

What are the benefits of using a real estate agent to buy a house?

Having an agent to survey the available properties and recommend the ones that suit your needs could certainly save you time, and agents often have local market expertise and the inside scoop on properties that might be headed to market. An agent should also be well versed in the negotiation process (especially useful in a seller’s market) and able to help coordinate the many moving parts that lead to a closing.

What should a homebuyer do before talking to a real estate agent?

It’s wise to have an idea of your budget before consulting a real estate agent. You can prequalify for a mortgage with a few lenders to get a sense of what you might be able to borrow. You should also research your desired town or neighborhood to get a sense of where you would like to live. And know your nonnegotiables — a minimum number of bedrooms or whether you prefer an old home over new construction, for example.

What are the advantages of using a local real estate agent?

A real estate agent based in the city or neighborhood you’re looking to move to can have a wealth of knowledge about the community, including details on schools, weather patterns, and local contractors. They may also have connections to preferred lenders.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q126-147

Most people you know who have bought a home have probably done so with the help of a real estate agent. In fact, a 2025 report shows that 88% of home purchases involve an agent or broker. (Realtors®, by the way, are real estate agents who belong to the National Association of Realtors®, requiring them to adhere to a certain code of ethics.)

But agents may charge a fee, so you might be asking yourself, “Do I need a Realtor or real estate agent to buy a house?” The answer is no, you aren’t required to go through a professional to complete the transaction.

That said, it is not a decision to make lightly. Buying a house is likely the biggest investment you’ll ever make. So if you make a mistake in the home-buying process, there’s a lot of money and possibly other risks on the line. Let’s take a look at the pros and cons of going solo as a homeshopper.

What Does a Real Estate Agent Do?

Before you decide whether or not to forgo a real estate agent, it can be a good idea to brush up on what they actually do.

Real estate agents are licensed to help clients buy and sell real estate. Realtors, as mentioned, have to follow a strict ethics code, which includes putting their clients’ interests first.

Among the work that real estate agents do for buyers is:

•   Look for property listings that fit their clients’ goals

•   Schedule and conduct property tours

•   Write offers and counter offers

•   Be present for inspections

•   Help negotiate with the seller

•   Troubleshoot any roadblocks that come up

They can also often help with a variety of referrals, whether to a mortgage broker, a home stager, a real estate lawyer, or a contractor.

How to Buy a House Without a Real Estate Agent

If you want to join the few buyers who forge ahead and buy a house without a Realtor or real estate agent, it’s important that you prepare to take on the tasks agents normally do.

If you’re inexperienced, it’s essential to learn how you can prepare to buy a home. Here’s a rundown of some of the key steps you will likely need to take.

Step 1. Consider Your Mortgage Options

Unless you are an all-cash buyer, you’ll need to explore the different types of mortgage loans. You could get prequalified for a mortgage with several lenders to get a sense of the size of mortgage loan you might qualify for.

Step 2. Research Neighborhoods

As you zero in on neighborhoods that meet your criteria, it’s a good idea to do your research and learn the price of recent sales. This will help you understand if the homes you tour are priced correctly — and whether they fit within your budget.

Step 3. Get Preapproved for a Home Loan

As your house search starts to heat up, you’ll probably want to get preapproved for a mortgage. Once your application is processed, you’ll have a preapproval letter to share with sellers to reassure them that you’re serious about buying. The lender will consider your income, debt-to-income ratio, credit scores, and ability to make a down payment and meet closing costs.

Step 4. Hire a Home Inspector

When you find a home you’re interested in, it’s recommended that you hire a home inspector. This professional will issue a report outlining the ins and outs of a home’s condition, which may lead to further negotiation.

Step 5. Request a Seller’s Disclosure

Ask for a seller’s disclosure, a document that can include information about repairs and upgrades the seller made to the home, as well as problems they’re aware of. You can ask them about any structural problems; the condition of the heating, ventilation, and air conditioning, plumbing, and electrical systems; mold and mildew; termite damage; the presence of lead paint, radon, and asbestos, and so forth.

Step 6. Make an Offer

The offer will include the amount you’re offering, what you’d like to stay in the home (such as appliances), and closing dates. Including an appraisal contingency in the offer means you can cancel the contract if the appraisal is negative without losing your deposit.

Recommended: How to Make an Offer on a House

Step 7. Hire a Real Estate Lawyer

It’s usually a good idea to hire a real estate lawyer to prepare documents and look over your contract before you sign it.

Step 8. Negotiate

Sellers, meanwhile, will likely include a loan contingency. During this part of the process, there may be counter offers and negotiations between you and the seller about the price of the home or repairs you want the seller to make. The appraiser will also file a report on the home, so that you and your lender can feel confident the home’s value matches its price. Keep copies of all communications as negotiations progress.

Step 9. Finalize Documentation and Close on Your Property

At the closing of the loan, you’ll need to sign documents and handle other aspects that a Realtor might typically help you with.

It is typically recommended that the buyer obtain owner’s title insurance, which protects the buyer against title defects such as mechanic’s liens (legal claims filed by contractors who haven’t been paid for work on the property) and other after-closing problems. It usually costs between 0.5% and 1% of the purchase price, but it varies from state to state.

Recommended: How Long Does It Take to Close on a House?

Benefits of Buying a House Without a Real Estate Agent

Buying a home without a real estate professional can have some upsides. Here’s a closer look at the benefits you might reap.

1. Saving Money

Historically, there wasn’t much incentive for a homebuyer to work without a real estate agent because the agent’s commission fees were paid by the seller. But in mid-2024, the landscape changed. Now, real estate commission fees are changing, and there is no guarantee that the seller will pay the buyer’s agent. Instead, the buyer and agent need to discuss a fee structure before they begin working together. You might find that an agent is paid an hourly fee, or perhaps charges a flat rate. Some agents may request a percentage of the home price.

While working without an agent may save you money, it’s hard to determine how much. The only thing you can be certain of is that if you don’t use an agent, you will work harder to find a home and close the deal.

2. Easy Access to Information

If you’re planning on buying a house without a real estate agent, you likely have access to some of the same information that the pros do. Historically, agents had lots of insider tidbits about listings.

Now, you can instantly find out about new properties and neighborhood demographics online. That means taking the buying process into your own hands is considered by some as increasingly feasible. Plus, there’s an array of great tools to help you with calculations, such as a home affordability calculator.

And since no one knows what you are looking for as well as you do, the search process can sometimes be more efficient.

3. A Familiar Real Estate Deal

One situation where it might make sense to eschew an agent is if a friend or family member is selling you the property.

Although risks may still be present, the transaction may be more straightforward if you are buying a house from a relative or someone you know well. You still want to make sure you and the seller are clear on the price, closing date, what furniture or fixtures will be included, contingencies, and more.

It is typically recommended that a buyer review and approve home inspections and obtain full loan approval in writing before lifting certain contingencies.

If it is known that a contingency date cannot be met or another material change occurs after the contract is written, such as a seller credit for closing costs, a contract addendum executed by all parties outlining the change is usually obtained.

Drawbacks of Buying Without a Real Estate Agent

Not hiring a real estate agent or Realtor to assist you with your home search comes with disadvantages and risks.

1. The Amount of Work Required

You have to be constantly on the ball, keeping an eye out for properties and arranging visits with sellers.

The process can be exhausting and time-consuming, and if you aren’t attentive, you could let great homes slip by or make the hunt longer than it might have been with a real estate agent.

You’ll also have to navigate the world of mortgages (from the mortgage basics to possibly buying points to bring down your rate) without an agent to serve as a sounding board or offer a second opinion.

2. The Risks Involved

You’ll be on the hook for all the details of the transaction. Without an agent, you’ll need to determine the correct bid price and terms, watch the contract contingency dates, and understand the ins and outs of the purchase contract.

Agents are experienced in identifying hidden flaws in the property or transaction.

If you don’t have a real estate agent in your corner to help research the best bid price, you risk paying more than you need to on your new home, which may result in more money spent.

3. The Knowledge Needed

Agents have access to information that’s not necessarily online, thanks to their connections with other real estate agents, inspectors, etc.

Then there’s the experience factor. Most agents operate under a seasoned broker who oversees and consults on various transactions.

It could take a lot of effort to figure out what a Realtor has learned through years on the job and ongoing education. That learning curve may not be worth your time.

Factors to Consider When You Buy Without an Agent

So now that you have read about how to buy a home without a real estate agent, as well as the pros and cons, perhaps you are still thinking that flying solo is right for you. If so, do one more check-in and consider these factors:

Market Knowledge

You will not have in-depth, ongoing insight into housing prices in the area where you are searching. A Realtor can help you understand pricing history, potential property tax hikes, local drainage, flood potential, and more. They are often skilled at pointing out distinctive features as well as potential problem areas in homes.

Negotiation Strategy

Real estate agents typically have years of experience knowing when a home seller is negotiable, and by how much. They can guide you through offers and counter offers, as well as bidding wars. They also know the next steps if a home inspection points out significant problem areas or if there are hitches as you work through your mortgage contingencies. This can save you time and stress while keeping your deal in play.

Red Tape and Paperwork

Bidding on and purchasing a home involves all kinds of paperwork, including mortgage applications, offers, contracts, title searches, and more. For someone who is not familiar with the process (you, quite possibly), this can be a steep, time-consuming, and possibly frustrating learning curve. A Realtor can help alleviate a chunk of this burden.

Professional Connections

As noted above, it can take a village of professionals to finalize a home sale. Some of the people who may be involved include mortgage brokers, home inspectors, roof inspectors, real estate lawyers, contractors, and more. Most real estate agents have an extensive network to quickly connect you with the qualified professionals you need.

The Takeaway

Do you need a real estate agent to buy a house? No, you don’t. It’s entirely possible to learn how to buy a home without a Realtor and perhaps avoid paying for the agent’s time and expertise. Just be aware of all of the work and risk involved in finding a home, making an offer, handling contingencies, and closing the deal.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Can you make an offer on a house without a real estate agent?

A buyer is not required to be represented by a real estate agent in order to make an offer on a house, but unless the house is for sale by owner, you’ll need to work with the seller’s agent to communicate your offer to the owner.

Does buying a house without a real estate agent reduce the price?

Not necessarily. Even if you, as the buyer, are not represented by a real estate agent, the seller may use an agent to list and show the home and process offers.

Do I need a real estate lawyer if I don’t use an agent?

If you’re buying a house without a real estate agent, it’s generally wise to hire a real estate lawyer to review your contract and prepare necessary documents. In some states, a lawyer is required at closing. Even where it’s not mandatory, having legal guidance can help you avoid costly mistakes and ensure the transaction is handled properly.

Is buying a house without a real estate agent a good idea for first-time buyers?

It depends on your experience and comfort level. First-time buyers may benefit from an agent’s market knowledge, negotiation skills, and familiarity with contracts and contingencies. While it’s possible to buy without representation, the learning curve can be steep if you haven’t been through the process before.

When does it make sense to buy a house without an agent?

Buying without an agent may make sense if you already have real estate experience, are purchasing directly from someone you know, or feel confident handling negotiations and paperwork on your own. However, buyers should weigh potential savings against the added responsibility and risk involved.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOHL-Q126-145

As of mid-2025, the average closing time on a house was 41 days after acceptance of an offer, down slightly from 44 in 2024, according to ICE Mortgage Technology, Inc. Whether that timeline feels swift or slow will depend on your personal circumstances, but once you’ve found a home to buy, it’s natural to want to close the deal quickly.

Online mortgage options can speed this process along, and many home sales can be completed in as little as 30 days. Still, delays can happen.

Here’s what you need to know in order to get to the closing table.

How Long Does Closing on a House Take?

If you’re paying cash for a house, you’ll typically be able to close quickly.

But let’s assume a home loan will be part of the process. You’ve jumped through the initial hoops of the mortgage loan process and made an offer on a home you like.

If the offer is accepted, you’ll provide an earnest money deposit and sign a purchase contract. The price and any contingencies — conditions that must be met for the deal to proceed — are included in the purchase agreement.

This begins the due diligence period. It includes a title search to verify ownership and look for any liens that need to be paid off to ensure clear title to the new home. Most but not all issues will be reflected in a preliminary title report.

A typical contingency period is 30 to 60 days, though something such as the inspection could be required within 10 days or less. Buyers can ask for extensions in writing.

Here are four common contingencies.

Financing Contingency

The mortgage contingency nullifies the deal if you can’t procure a mortgage within a certain time. The contingency language may be specific about the type of loan, down payment, and interest rate.

Getting preapproved for a mortgage is standard, but it’s not a guarantee. After your chosen home is under contract, your mortgage still has to go through underwriting.

Recommended: How Does the Mortgage Preapproval Process Work?

Home Sale Contingency

You may need to sell your current house to complete the purchase. You’ll typically be given 30 to 60 days to do so. In a competitive market, many sellers won’t even consider an offer with a home sale contingency.

However, some sellers may employ a kick-out clause, which allows them to keep showing their home and “kick out” the contingent buyers if the sellers receive an offer without a home sale contingency.

Appraisal Contingency

An appraisal is usually required when a home is being financed. If the property valuation is less than your offer, you may walk away from the deal. You could also pay the difference or ask the sellers to lower the price. It could take two to six weeks after the appraisal to get to close.

(By the way, if you’re still in the shopping stage, you can put an offer on a house that’s contingent.)

Home Inspection Contingency

A home inspection is generally not mandatory for any loan type but will help ensure that the home is free of issues that may result in expensive repairs. In a seller’s market, many properties are sold as is, meaning sellers won’t negotiate for repairs after the inspection.

In a buyer’s market, sellers might agree to pay for some repairs or to reduce the home’s price.

How a Mortgage Closing Works

You’ve qualified for a mortgage and chosen a lender.

After you’ve supplied income, asset, and other documentation, all of the contingencies have been satisfied, and your mortgage has received final approval from underwriting, it’s time to prepare for closing.

This will be the big day, when signing the closing documents legally transfers ownership from the sellers.

Sign Documents

Three days before your closing date, your lender will provide you with a closing disclosure that outlines the final closing costs and terms of your home loan. You can compare this five-page form with the loan estimate you received after applying for the mortgage.

Paperwork (lots of it) will have been prepared for you, including the deed of trust or mortgage and the settlement statement.

In some cases, everyone gathers in one place to sign closing paperwork. Other times, buyers sign separately from sellers. As of 2026, 44 states and the District of Columbia now allow remote online notarization.

Pay Closing Costs

The lender will usually tell you the amount needed for closing several days before the event. A wire transfer may be arranged a day or two before closing, or you can present a cashier’s check or certified check that day.

Cash to close includes closing costs (unless you opted for a no-closing-cost mortgage) and your down payment minus your earnest money deposit and any seller credits.

Transfer the Home Title

After signing a mountain of documents, the closing attorney, escrow officer, or title company representative will record the deed, and you will be given the house keys.

Recommended: First-Time Homebuyer Guide

The House Closing Process, Step By Step

Here are the basics:

1.   The seller signs the purchase agreement.

2.   The buyer may order a home inspection.

3.   The buyer applies for the mortgage (and considers asking to lock in the rate).

4.   The lender orders a home appraisal and conducts credit underwriting.

5.   The mortgage is approved.

6.   The buyer provides proof of homeowners and title insurance.

7.   The buyer receives the closing disclosure; notice of closing time, date, and location; and what to present at closing, such as a photo ID and cashier’s check or proof of wire transfer for cash to close.

8.   The buyer takes a final walkthrough, verifying that sellers have made any required repairs and that nothing in the purchase agreement was removed. The buyer can check for leaks, turn on heating and air conditioning, and so forth.

What Causes Delays When Closing on a House?

A buyer and seller agree to a target closing date in the purchase contract, but the closing doesn’t always happen on or before that date.

Financing, appraisal, inspection, and other issues can delay a closing. Here’s a taste of what may cause a postponement:

•   The lender wants more documentation. Even if buyers were preapproved, received their mortgage commitment, and were cleared to close, lenders will review credit and bank statements one last time within a few days of closing. Any abnormalities can delay the closing.

•   The mortgage is denied. Even after preapproval, a home loan may be denied for lots of reasons, sending buyers back to the starting block.

•   Interest rates surge unexpectedly. This can affect qualification if the loan is not locked.

•   The appraisal comes in low. A home may appraise for less than the purchase offer. Buyers can request a second appraisal, ask the sellers to renegotiate the price, put more down to cover the difference, or walk away. (This is where having an appraisal contingency is key.)

•   The inspection reveals that major repairs are needed. If it’s an as-is sale, buyers can walk away if they had an inspection contingency in the contract. They could still try asking the sellers to make certain repairs, request a decrease in the sale price based on the cost of repairs, or ask for a home warranty.

•   The title is not clear. A contractor’s lien, for example, can cause a closing delay if the contractor can’t be found to settle it.

•   Buyers can’t sell their house in time. If sellers agreed to a home sale contingency, the clock is ticking. If the buyers’ home doesn’t sell in time, the deal could fall through.

•   Instrument survey issues. Boundary line encroachments or disputes can hang up a closing.

•   Unrealistic closing date. Any complication can cause a deadline to fail. An extension must be approved by each party.

The Takeaway

How long does it take to close on a house? The average closing takes place 44 days from the time an offer is accepted, but the timeline varies. Getting to the closing table, in person or remotely, is an accomplishment. It means you have qualified and persevered.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How long does it take to close on a house with cash?

In general, it takes only one to two weeks to close on a house with cash because there’s no need to wait for a lender to approve a loan. Once seller and buyer agree on a price and the inspection is done (if the buyer requires one), the closing can be scheduled immediately.

How long does it take to close on a house after the appraisal?

It could take anywhere from two to six weeks to close on a house after the appraisal. If the home appraises for the agreed-upon price and your mortgage documents are all in order, you could find yourself at the closing table in as little as 14 days. Complications with the appraisal, home inspection, or mortgage approval will extend this timeline.

What can potentially delay a closing?

A closing can be delayed for contingent sale issues, title irregularities, a mortgage denial, insufficient paperwork, or boundary survey problems, among others.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q126-140

A balloon mortgage is where you make low monthly payments for a short period of time and then pay off the entire loan balance at the end of the term. Balloon mortgage terms are typically five to seven years. The payments leading up to the final payment, which is known as the balloon payment, can be interest-only or a combination of principal and interest.

Note: SoFi does not offer balloon mortgages at this time.

The idea of low initial payments sounds enticing to many homebuyers, so let’s take a look at what exactly a balloon mortgage is and how it works, including pros and cons.

What Is a Balloon Mortgage?

A balloon mortgage is a mortgage with a shorter-than-normal term — maybe five or seven years as opposed to 15 or 30 — with relatively low monthly payments but a large lump sum due at the end of the term.

Typically, people who take out a balloon mortgage plan to sell the house or refinance before the balloon payment is due. Some may expect to receive a large sum of money to pay off the loan.

Do Balloon Mortgages Still Exist?

Balloon mortgages do exist, although they are less common today than they were before the 2007-2008 financial crisis, which left many homeowners owing more on their loans than their property was worth. Balloon mortgages are not considered qualified mortgages because they have an unusually high risk profile. They may therefore be offered only by smaller lenders.

Balloon mortgages are sometimes used for business loans, in which the founder wants funds to launch their business and plans to repay them once the business is making a profit.

How Do Balloon Mortgages Work?

In technical terms, a balloon mortgage is one that hasn’t fully amortized. Although the payments are based on a 30-year term, the actual term is much shorter, leaving a large amount due at the end (hence the lump-sum payment).

Types of Balloon Mortgages

There are two ways a lender might calculate payments on a balloon mortgage:

Amortization Over a Longer Loan Term

In this scenario, the fixed loan payments may be based on a 30-year loan term even though the actual term is just 15 years. The borrower would make the relatively affordable lower payments for 15 years, then the loan balance would be due in a mortgage balloon payment.

Interest-Only Payments

Here, the borrower would pay only the interest on the loan for an initial period, then the principal balance would be due in a balloon payment.

Balloon Mortgage Example

Below, you can see how the two types of balloon mortgages might play out for a borrower who has a balloon mortgage for $300,000.

10-Year Balloon Loan at 6.50% With 30-Year Amortization

5-Year Balloon Mortgage With Interest-Only Payments at 6.50%

Why Would Anyone Want a Balloon Mortgage?

Being suddenly faced with a lump-sum mortgage payment due might sound like a nightmare to most of us. So when would such a financial product actually be an attractive option?

It’s worth noting that balloon mortgages sometimes carry lower interest rates than 30-year fixed-interest mortgages, and in some cases, they can be easier to qualify for. That can make them tempting to those in the following situations:

•  The borrower plans to sell the house and move before the balloon sum is due. This way, the lump sum is paid off with proceeds from the house sale, and the borrower benefits from the lower interest rate in the meantime. This assumes, of course, that the home holds its value or increases in value in a relatively short time period.

•  The borrower plans to refinance the loan once the balloon sum is due. This is a common scenario, and may give a borrower the opportunity to benefit from the lower interest rate of the balloon mortgage in the short term while buying time to build credit and shop for a better loan in the long term.

•  The borrower expects to have the money to pay the balloon sum by the time it’s due. Maybe they have another property they plan to sell or are banking on an inheritance or some other savings plan, and they might save more in interest over the long run than by taking out a traditional 30-year mortgage.

That said, there are obviously risks to this approach that may outweigh the benefits.

Recommended: Guide to Buying, Selling, and Updating Your Home

Pros and Cons of Balloon Mortgages

What are the specific advantages and disadvantages of balloon mortgages?

Other Types of Mortgages to Consider

Although balloon loans can be relatively easy to qualify for and do have some benefits, they can also be risky. We know what they say about best-laid plans, and even those with bulletproof plans sometimes encounter unforeseen circumstances.

What if the money set aside for the balloon payment has to be spent on a medical emergency or another unexpected expense? What if the sale of the property or the annual bonuses fall through? What if, when it’s time to refinance, rates are higher or the borrower’s credit history is less favorable? What if property values have dropped precipitously and refinancing options are hard to come by?

Fortunately, there are plenty of other mortgage types that can meet borrowers’ needs without creating an unduly risky scenario.

Fixed-Rate Mortgages

A fixed-rate mortgage, or FRM, is one in which the interest rate is fixed. The borrower pays the same interest rate over the entire term of the loan, usually 15 or 30 years.

The fixed interest rate also means the monthly payment is fixed, making this a popular mortgage option for those who want to plan ahead and ensure that their mortgage payments fit their budget.

FRMs protect buyers from rising interest rates, so no matter what happens with the market, they can rest assured their rates will stay the same.

On the other hand, FRMs can preclude borrowers from benefiting when interest rates drop, which leads us to another popular type of mortgage.

Adjustable-Rate Mortgages

An adjustable-rate mortgage, or ARM, has an interest rate that fluctuates over the term of the loan based on the market. These loans generally begin with a relatively short fixed-rate period followed by a variable interest rate.

ARMs are attractive for a variety of reasons. For one thing, the interest rate during the introductory fixed-rate period is often lower than it is in FRMs, meaning the borrower can enjoy smaller payments at the beginning of the mortgage.

ARMs may also allow borrowers to benefit when market rates drop. However, if market rates increase, so can the borrower’s monthly payment. Some ARMs include clauses that limit annual and life-of-loan adjustments and create rate caps, which can help protect buyers, but it’s not the same peace of mind as FRMs.

Recommended: Fixed vs. Adjustable Rate Mortgages: What’s the Difference?

More Ways to Find the Right Mortgage for Your Needs

Any mortgage — indeed, any loan — carries some degree of risk. But there are ways to mitigate the inherent hazards involved with owing a large debt. Figuring out how much house you can afford is an important first step to help ensure that you don’t overspend and end up with an unaffordable mortgage.

Once you’ve got a home-buying budget locked in, researching types of mortgage loans is a great next step. And finally, shopping around at different lenders for the best mortgage terms available can also help you save money in the long run.

Government-insured loans can help borrowers qualify with low interest rates and down payments, which can be as little as 3.5% for Federal Housing Administration loans and even 0% for U.S. Department of Agriculture loans in approved rural areas. But conventional loans, or those offered by private lenders, can also offer competitive terms and incentives.

The Takeaway

A borrower with a balloon mortgage makes low payments for, say, five or seven years before a very large “balloon” payment is due to pay off the mortgage. Financing your home purchase this way can be riskier than other loan types, even though the upfront costs are enticingly low. Fortunately, there are other ways to borrow money for a home purchase that involve less risk.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

What is considered a balloon mortgage?

A balloon mortgage is one in which the borrower makes relatively low payments for an initial period of time (five, seven, or 15 years) before a single, large mortgage “balloon” payment comes due. This can involve a high level of financial risk, as borrowers might not have the funds when the lump sum comes due.

Do balloon mortgages still exist?

Balloon mortgages do exist, although they’re less commonly used for home purchases than in the past. Today, they’re used more often for commercial loans.

Why would you want a balloon mortgage?

Borrowers are attracted to balloon mortgages because of the period of low monthly payments at the outset of the loan term. They may plan to sell or refinance before the mortgage balloon payment comes due or may think that they’ll come into other money — through an inheritance, for example — that will help them afford the balloon payment. However, there’s always risk involved in these scenarios.

What happens if you can’t make the balloon payment?

If a borrower cannot make the balloon payment when it comes due, they may need to refinance, sell the property, or negotiate with the lender. If none of these options are possible, the borrower could face default or foreclosure.

Are balloon mortgages considered qualified mortgages?

No. Balloon mortgages are generally not considered qualified mortgages because of the large lump-sum payment at the end of the term, which increases the borrower’s risk. If you’re looking for options for your next mortgage, check whether n fixed-rate mortgage or an ARM might suit your financial goals.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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