Should You Sell Your House Without A Realtor?
Selling your house without a Realtor may not be as complicated as you think. Although more work is involved, selling without the help of a real estate agent could be a smart financial move. You could save money on the agent fee, have more control over the sale process, and, in some cases, sell your home faster.
However, before you put a “For Sale by Owner” sign up in your front yard, it’s wise to consider the complexities of selling your house without a Realtor. Apart from dealing with a ton of paperwork, selling a home by owner is time-consuming. And in the end, the money you save on agent commission fees is usually not worth the extra effort.
This article discusses the pros and cons of selling your property without a Realtor. You will learn about the selling process to help you decide if the “sell a house by owner” route is for you. If you decide it makes financial sense, then go for it, but you might find that it makes more sense to simply hire an agent.
How to Sell Your House Without a Realtor
Selling your house without the help of a real estate agent typically involves one of three options. These are the following:
- Sell your house for cash: A cash buyer is typically a real estate wholesaler who advertises that they “buy any home” or offer to buy your house “fast for cash.” You can sell your home in seven to 14 days because the buyer doesn’t rely on getting a mortgage approved.
- Sell your home “For Sale By Owner” (FSBO): You can facilitate the entire real estate transaction. The FSBO process involves listing your home, dealing with inquiries, and negotiating the sale with potential buyers.
- Sell to a buyer using a real estate attorney: Suppose you already have a prospective buyer wanting to buy your home. In that case, you can hire a real estate attorney to help close the sale.
Each of these options has its advantages and disadvantages. Therefore, the decision to sell without a Realtor depends on what you want from the real estate transaction.
Pros of Selling Your House Without a Realtor
Save money on the transaction
You may consider selling without a Realtor primarily because of the financial savings. Commission rates of real estate agents can be as much as 6%. What does this mean in real terms?
Let’s say your home sells for $360,000, and you must pay a commission rate of 6%. That is a whopping $21,600 for Realtor fees—money that could help you afford to buy a better property than you expected.
It’s good to remember that you may have to cover the buyer’s agent commission fees of 3%. However, you still make savings on the house sale.
More control over the sale process
One of the reasons homeowners decide on a “For Sale By Owner” is that they get to control the entire process. Here are a few advantages of controlling the sales process:
- Negotiate on your own: Sometimes, you’re just a better negotiator than your agent, or you simply don’t want to hand the responsibility to someone else. Selling on your own keeps the ball in your court.
- Determine the viewing schedule: You can decide when prospective buyers can view the property or arrange an open house.
- Accept an offer without pressure: It’s not unheard of for Realtors to pressure home sellers to sell faster for a below-listing offer. Hence, they get their sales commission faster. However, selling a property yourself means you sell on your terms.
You can sell your house faster without a Realtor
Sometimes, selling your house “by owner” can result in a faster sale. For example, the National Association of Realtors reports that over two-thirds of FSBO homes sold in under 14 days. However, it’s good to note the caveat — most of these sales were to someone the seller knows.
It’s also good to note that selling to a cash buyer typically means you can avoid inspection delays or staging your home for sellers. Cash buyers buy homes in an “as-is” condition. However, they typically offer below the property’s fair market value.
Cons of Selling Your House Without a Realtor
Selling a home involves a lot of work
One of the biggest considerations of your home without professional help is the amount of time involved. Suppose you already have a full-time job and are new to the real estate housing market. In that case, the whole process can become extremely overwhelming.
Here are several basic steps involved in selling a home without a real estate broker or agent:
- Carry out a comparative market analysis to work out a fair and competitive selling price
- Market your home, including designing and printing flyers and publishing listings on real estate websites
- Be on call 24/7 to communicate with potential buyers
- Host open houses or house viewings
- Vet prospective buyers to ensure they are serious about buying your house
- Negotiate the final selling price, including any contingencies
- Work with the buyer’s agent
- Prepare legal documents to transfer ownership of the property
Selling without a Realtor can mean a lower sale price
You can sell your house without a real estate professional, but it often means accepting a worse deal. For example, one study showed that FSBO homes sell for an average of 6% below the average median sale price.
Here are some reasons why homes can sell for less when selling FSBO to a cash buyer:
- An experienced agent might have the skills to out-negotiate you
- You lack a network of real estate lawyers, appraisers, home inspectors, and other professionals
- A lack of marketing skills could mean your property sits on the market for several months
- Cash buyers rarely offer a fair price that represents its true market value.
Issues with potential buyers
Homeowners who sell a home FSBO can find it difficult to attract the right buyer.
For example, the lack of real estate experience could make buyers wary because they fear issues with the deal not going through. Or failing to verify buyers are pre-approved and legitimate could mean you waste time with scammers and strangers who are not interested in buying your house.
The Process of Selling Your House Without a Realtor
Suppose you decide it makes sense to sell your home without a Realtor. In that case, there are key steps to ensure you maximize profit on the sale of your house. Here are the best ways to sell your home without a Realtor.
Find out how much your home is worth
The first step is to conduct a comparative market analysis to set a competitive list price. The sale price must look attractive to potential buyers. Too low, and you will lose money on the deal; however, too high, and your property will sit on the market for months.
It is relatively straightforward to calculate a fair price to list your home. First, compare similar properties sold in the area in the previous three to six months. Note the purchase price, speed of sale, square footage, and location. Alternatively, you can get the information from the county recorder’s office.
Get your home ready to sell
Preparing the home is the next step if you want to sell it without a real estate professional. Remember—buyers are looking for a lifestyle and are not interested in your holiday snaps on the refrigerator. Therefore, staging the house should help them envisage themselves living there.
Here are a few tips on preparing a property “For Sale By Owner”:
- Thoroughly clean the house, getting into all the nooks and crannies. As you go, take note of any necessary minor repairs.
- Remove items from closets and cupboards so they are only one-third full.
- Declutter rooms by removing extra furniture to increase the sense of space.
- Depersonalize your house. For example, replace family photographs with artistic, generic ones.
- Pay attention to curb appeal. Spruce up the front yard and ensure the lawn, shrubs, and trees are neatly trimmed and attractive. Painting the front door also makes an excellent first impression.
It’s good to remember that preparing a home for sale depends on buyer priorities. For example, it’s best to stage the home when selling to an owner-occupier. However, a cash buyer may not be interested in the property’s condition. However, if selling to an investor, you must ensure it’s in good condition and have complete financial information.
Make necessary repairs
Reproducing fixtures and fittings is vital to make your home more attractive to prospective buyers. Therefore, fix leaking faucets, patch up any holes in walls, replace cracked tiles, and repair squeaking floorboards and doors.
Consider making home improvements
Low-cost home improvements can add tremendous value to your property. However, it’s vital to avoid overspending on home improvements. So what simple renovations can help you sell your house faster? Here are a few ideas:
- A fresh lick of paint: A coat of paint can help rejuvenate rooms. Choose light, neutral colors to appeal to the widest possible audience.
- Upgrade the lighting: It’s a good idea to change all the light bulbs and replace them with brighter LED ones. In addition, it can be useful to add additional lighting to darker rooms if necessary.
- Replace caulking: Check around the bathtub and shower unit to assess the condition of the caulking. Nothing detracts from a bathroom more than moldy seals around sinks, tubs, and showers.
- Consider a kitchen facelift: The kitchen is one of the most used rooms in the house. A fresh coat of paint on the kitchen cabinets, baseboards, and trims can breathe new life into the room, turning it into a contemporary living space.
Stage your property
You must “set the stage” in your home before welcoming potential buyers. A well-staged home will sell faster and help you negotiate a higher price. You aim to appeal to the lifestyle desires of the buyers. Therefore, buyers must see themselves living there when they pull up at the drive and enter the front door.
First impressions are crucial. Did you know that 95% of people make purchasing decisions subconsciously? Research shows that people tend to make decisions based on emotions, not hard, cold facts.
Here are a few house staging tips:
- Showcase the potential of each room. For example, put fresh towels in the bathroom and set the dining table.
- Open curtains fully to increase natural light in each room.
- Define each room to maximize the potential usage of the property.
- Arrange furniture so that it looks inviting, and add some brightly colored throw pillows to add a splash of color.
- Make a fresh pot of coffee and bake some pastries before a buyer arrives. The house will have a nice aroma, and you can also offer some refreshments to make a great impression.
Market your property
Marketing is the only way to attract the greatest number of buyers. If you sell your home without a real estate agent, you are at a disadvantage regarding marketing. For example, only licensed agents can list properties on the MLS. However, there are several easy ways to find buyers for your house. Here are a few:
- Put a “For Sale” sign in your yard.
- Print sales flyers.
- List your home on real estate websites like Trulia, Zillow, Redfin, and FSBO.com.
- Set up a quick website for your listing on WordPress, Wix, or Squarespace.
If you have marketed and staged your home correctly, you should quickly start receiving offers. However, it’s vital to remember that there is more to consider than the purchase price. And the highest offer may not be the best one.
For example, consider contingencies, closing timelines, closing costs, and any giveaways the buyer wants. These factors impact the speed of closing the deal.
Once you accept an offer, you must arrange the paperwork. This includes the sale agreement, closing statement, and arranging escrow for the earnest money down payment. Due to the legal complexities involved, it may be wise to use a real estate lawyer to handle the paperwork.
Alternatives to Selling Without a Realtor
Selling a house without a real estate agent can be a daunting task. You must devote significant time and resources to marketing the property, staging it for potential buyers, and handling the paperwork to close the deal. Unfortunately, there is no guarantee that you will get the highest price possible or find the right buyer quickly.
What are the alternatives if you decide to go down another route? Here are a few ideas:
- Sell your house to a “cash-for-house buyer.”
- Sell your home with a lease option. This way, you rent your property, giving the tenant an option to buy at the end of the lease.
- In some cases—especially in a buyer’s market—hiring a Realtor may be the fastest way to sell your house for top dollar.
- Use a flat-fee MLS listing service to increase your chance of finding a competitive buyer.
Do You Save Money When Selling a Home Without a Realtor?
You can save money in agent commission fees when selling a home without a Realtor. These savings are between 3% and 6% (depending if you must pay the buyer’s agent a fee). However, you must be prepared to complete all the paperwork, market your property, and negotiate with buyers. All in all, most of the time, it’s more worth it to hire an experienced agent.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.