Selling your home without a Realtor is a tempting option for homeowners looking to save money. But there are important considerations and steps you should take before embarking on the for-sale-by-owner (FSBO) journey. This guide explores the pro and cons of doing it yourself, how to prepare your home for sale, how to price your home competitively, how to best market the home, and how to negotiate with buyers. So if you’re seriously thinking about selling your home without a Realtor from start-to-finish, then read on!
Benefits of Selling Without a Realtor
The key benefits of selling your home without a Realtor:
1. Save Money on Commissions
The primary motivation behind selling your home without a Realtor is avoiding the sales commission, which can range from 3-6% of the total sales price. This means that if you sell your house for $300,000, then by not using a real estate agent, you could potentially save up to $18,000 in commission fees. However, keep in mind that many homeowners wind up paying a commission to work with buyers who will only use a Realtor to represent them.
2. More Control Over Sale Process
Some people like control. If you have the time and desire, listing and marketing your property grants you control over the process. You can set the price, schedule showings, and negotiate offers on your own terms.
3. Flexibility With Pricing & Negotiations
Some buyers would prefer to work directly with a seller, especially if there is some connection with the seller (i.e. friend or co-worker). Without Realtors involved in negotiations between buyer and seller, there can be more flexibility around pricing, repairs, and closing costs; which is augmented by the savings from reduced commission fees.
Selling your home without an agent can potentially provide more privacy during the process. You don’t have to worry about strangers walking through your home during open houses or showing appointments. However, you do maintain control over showings when a Realtor is involved.
14 Steps to Do It Yourself
1. Price Your Home Right
When it comes to pricing your home, there are several factors that you should consider. First and foremost, perform a market analysis by researching comparable sales (comps) in the area. This will give you an idea of what similar homes have sold for recently, so that you can determine a fair asking price for yours. Additionally, take into account market conditions such as current trends in the housing market and local economic conditions. These can influence how much buyers are willing to pay for your property.
There are many online websites that provide sales data. You can also use Property Wonk’s Home Value Tool to get three home value estimates with one click.
You should also consider the condition of your home or any recent upgrades or renovations that could add value. Any features that increase your home’s desirability among potential buyers should be factored in to the price tag.
It’s important not to overprice your home, since this could lead to fewer offers from interested buyers and a longer time on the market before finding a buyer who is willing to pay your asking price. Furthermore, even if a buyer is willing to pay over market value, it’s unlikely the house will appraise for that amount and will throw a wrench in the buyer’s financing.
2. Clean Your Home
Cleaning your home before listing it on the market is essential for creating a good first impression with potential buyers. Start by clearing out any clutter that has accumulated over time. Next, thoroughly clean all surfaces throughout the house including windows, floors, carpets and countertops. You should also consider having your carpets professionally cleaned if they are heavily stained or worn down from years of use.
3. Stage Your Home
Staging your home involves making the house look as attractive and inviting as possible to potential buyers. Use furniture and decor to create a warm and inviting atmosphere that highlights the home’s best features. Add some fresh flowers or plants to convey a welcoming feel. Make sure there’s minimal clutter and plenty of space between furniture so the home feels larger, flows better, and helps buyers envision themselves living in the space.
4. Make Repairs
To maximize your home’s market value, consider making any obvious repairs such as leaky faucets or peeling paint. Consider giving the walls a fresh coat of paint or replacing those dated light fixtures, and be sure to remedy any safety hazards.
5. Get Professional Photos
You must market your home online, either through various websites like Zillow, Trulia, Next Door, Redfin, etc., or through the MLS (see below). Bad photos or even average photos will defeat the purpose, so spending $100-$200 will be well worth the cost.
6. List Your Home
When it comes to marketing your home without a Realtor, listing your home online is indispensable. This can be done through the websites mentioned above, which allows potential buyers to view photos and information about your home from anywhere in the world. Additionally, you can advertise your property on social media platforms like Facebook or Instagram.
There are also services that will list your home on the (Multiple Listing Service) MLS for a flat fee. This will provide maximum marketing exposure and will automatically disseminate listing information to most online websites. Be aware that Realtors will naturally assume that you will pay a commission to a buyer’s agent. In fact, you must disclose the commission percentage you’re willing to pay.
7. Market Your Home
Don’t necessarily overlook traditional advertising in local newspapers and magazines. These publications often have sections dedicated specifically to residential real estate listings, which can be a great resource for spreading the word about your home’s availability. You may also consider posting flyers around town with basic information about your property and contact details. Interested parties can then reach out directly for more information or to schedule a viewing appointment.
Finally, don’t forget about word-of-mouth marketing. Letting friends, family, neighbors, and co-workers know that you are selling could generate unexpected leads. There could be a perfect buyer standing next to you!
8. Show Your Home
Once your home has been listed online, you should start receiving calls and texts from Realtors and buyers. To prepare for showings, print some basic flyers with all relevant information about the house. Be sure to share information about local schools, shops, and parks to help buyers envision themselves living in the area.
Consider shooting some video and providing virtual tours of your home to make it easy for buyers to view the property from the comfort of their own home.
It’s important to take precautions to protect yourself and your property. Realtors will accompany any buyers they represent, which adds a layer of safety. For buyers who do not have representation, there are steps you can take to ensure your safety:
- Screen Potential Buyers: Ask for their name and contact information and verify that they are pre-approved for a mortgage or have proof of funds before allowing them to view your home.
- Accompany Buyers: This allows you to keep an eye on potential buyers and ensure that they do not damage or steal anything from your home.
- Remove Valuables: Consider removing any valuables or personal items from your home before showings to prevent theft.
- Be Present During Showings: It is always recommended to have someone present during showings to ensure safety.
- Security Cameras: It’s now common to have a security camera like Ring. It may be worth then small investment to at least install a doorbell camera.
9. Negotiate With Buyers
Negotiating with buyers can be a tricky process, but it doesn’t have to be. Before you begin negotiations, make sure you understand your bottom line. What price will you accept for your home? Determine this figure before any offers are made so you don’t get swept up in the emotion of the negotiation.
It’s also important to remember that most buyers will ask for concessions for closing costs or repairs. Be prepared to counter these requests if they are not within your budget or timeline.
When negotiating with buyers, it is important to stay calm and professional at all times. Listen carefully and respond thoughtfully when discussing terms of sale or making counteroffers. You may need to compromise on certain points in order to reach an agreement that works for both parties, but don’t capitulate on something you must have.
For an effective negotiation, you should be able to provide evidence to support why your asking price is fair. Be prepared to supply recent comparable sales prices in the area and what adjustments were made for the property’s condition or upgrades in comparison to other homes. Buyers want reassurance that they are not over-paying and providing this information can help build trust between both parties. This can make everything else easier, including agreement on other terms.
In addition, stay open-minded about potential solutions can help speed up negotiations. Perhaps there could be some creative financing options available (such as rent-to-own) that would benefit both sides. Or maybe offering additional incentives like free appliances could sweeten the deal enough to move forward. Keep an open mind when discussing different scenarios with potential buyers so they feel understood and respected throughout the process.
10. Find a Title Company
A reputable title company will be invaluable to anyone trying to sell a home without a Realtor. You will need a title company to issue title insurance and handle the intake and distribution of all funds. In addition, the title company will help interface with lenders, help with HOA documents, help transfer solar leases, and generally help manage the flow of paperwork. They cannot offer legal advice, but they can often point you in the right direction.
11. Manage Timelines
A standard purchase agreement details the timelines for inspections, the appraisal, loan approval, title searches, and more. For a seller, the most daunting task is accommodating the inspections and the contractors that may provide cost estimates. The other contractual timelines are also important and must be monitored to keep the transaction on track, or force a cancelation if necessary.
12. Manage Paperwork
If a Realtor is not involved, having a real estate attorney review any contracts prior to signing ensures everything has been properly documented. There are also legally required disclosures that must be completed by the seller and delivered to the buyer in a timely manner. This obviously comes at a cost, but can eliminate any surprises down the road.
13. Manage Repairs
Home inspections invariably result in the buyer requesting some repairs, which can be negotiated. The buyer could ask for all or some issues to be repaired prior to closing; or ask for a credit at closing to cover all or some repair costs. If serious issues are discovered, a buyer could ask for a lower sale price or simply cancel the deal.
This stage is where many deal fall apart. Some buyers don’t want to fix anything and some buyers want everything to be fixed, so there’s bound to be some friction. As a seller, it’s important to be realistic about repairs or concessions. There’s no guarantee that the next buyer will be more reasonable about the same list of issues that are now on the record, and must be disclosed. It’s often better to sacrifice some cash and close, than to start over and face the same obstacles a month later.
14. Close The Deal
The buyer, the seller, the title company, and possibly a lawyer or Realtor, confer to ensure that all paperwork is complete, all loan documents are signed, lenders funds are on hand, and any last minute items are addressed. The grant deed is then recorded at the county recorder. Congratulations you did it!
The Downside of Not Using a Realtor
The do-it-yourself, FSBO route may seem attractive due to the potential cost savings, but there are a few factors to consider before taking the plunge.
1. Marketing Reach
Unless you pay for a flat-fee MLS provider, not having access to the MLS is one of the main drawbacks of not using a Realtor when selling your home. The MLS is used by real estate agents across the country as well as other professionals in related industries such as appraisers and lenders.
Without access to this database, your property will have much less market exposure, which could lead to fewer offers or a lower sale prices. In many cases, the cash lost from a lower sales price can exceed the amount of cash saved by avoiding commissions.
Most Realtors also have other resources to attract buyers
2. Knowledge & Experience
Most Realtors are able to negotiate without emotion to carve out the best deal for their clients. Realtors are accustomed to pushing back on requests that are unreasonable or don’t work for the client. You as a seller must decide whether you want to handle negotiations with buyers or buyer’s agents, who are only looking out for their clients’ interests.
Further, real estate transactions involve complex paperwork and negotiations that require knowledge and experience to manage them effectively. Any mistakes can cause delays and can be costly if they result in legal issues down the road.
A Realtor will know how to best navigate rough waters and avoid pitfalls along the way, so it’s important not dismiss the value of an experienced agent.
3. Accurate Home Pricing
Pricing your home correctly is essential when trying sell quickly without leaving money on the table. A property that sits on the market too long becomes a “stale” listing, and can really hurt the bottom line.
Determining what price point will generate interest from buyers without pricing yourself out of competition requires research into current market conditions, local trends, comparable properties, adjustments for amenities, etc. Most homeowners simply don’t have the time or desire to perform the research.
Realtors use their expertise and data analysis tools to help clients set realistic asking prices that maximize profits, while minimizing time spent waiting for offers.
4. A Layer of Protection
FSBO sellers should watch out for scams and unsavory characters, which are typically filtered out when using a Realtor.
- Don’t handle any money yourself, including the initial earnest money deposit. The title company should handle all deposits and wires to avoid fraud.
- Be careful with people who want to buy your house sight unseen. It’s possible to sell a house without the buyer ever seeing it, but it’s rare and usually a red flag.
- Be wary of unsolicited offers or requests for personal information.
- Do not sign any document unless you read and understand all the terms and conditions.
- Trust your instincts. If something seems too good to be true, it probably is.
The Gist
Selling your home without a Realtor can be done effectively if your home is properly prepared, priced, and marketed. Once the right buyer makes an acceptable offer, staying objective and professional during negotiations can seal the deal. With careful planning, research, and safety precautions, you can get the maximum sales price while saving on sales commissions.
If you decide to sell with a Realtor, use the Property Wonk’s service to find the best Realtor for you.
