Selling your home can be a complex process. Not only do you have to market the property and find a buyer, but you also have to handle the closing process and successfully transfer the ownership. That’s why many homeowners choose to hire an experienced realtor to help guide them through this difficult process.
But hiring a realtor isn’t free. The commission for their services will come out of your profits once you close on the home. So, some homeowners choose to forgo hiring an agent and simply sell the property themselves. While this strategy can work for some, it may not make much sense for others. Here is a look at how to sell your home without a realtor, so you can decide what makes the most sense for your situation.
How Do Home Sales Without a Realtor Work?
Home sales without a realtor are similar to those that are sold with a realtor. The primary difference is that without a realtor, you will be responsible for all the tasks related to finding a buyer and closing on the sale. These duties include marketing the property, conducting open houses, fielding offers, handling negotiations, and answering any of the buyer’s questions.
An attorney can still help with the closing and transference of ownership. But you will be responsible for overseeing the entire process from start to finish. This can be overwhelming for many, especially if you work a full-time job and have other responsibilities. But, if you feel confident in your abilities to complete these tasks without the help of a realtor, you can avoid paying a costly broker fee.
Pros and Cons of Selling Without a Realtor
There are advantages and disadvantages to trying to sell your home without a realtor. While listing the property on your own can save you some money, realtors provide a valuable service that many homeowners may struggle without. Here are some of the main pros and cons of selling without a realtor.
Pros of Selling Your House Without a Realtor
Save Money on a Commission
The biggest advantage of selling without a realtor is saving money on a commission. While you won’t have to pay any commission out of pocket, the cost of hiring an agent will come out of the check the buyer ultimately pays you.
The average real estate commission is around 5-6%. As the average sales price of a home in the US is around $375,000, the typical commission for a real estate agent is around $21,000.
There’s not much you can do about paying the buyer’s agent commission – unless you make it very clear you don’t work with brokers. But you can pocket this additional fee by listing the home yourself.
Have More Control Over the Sales Process
Another significant benefit of listing the home yourself is that you have more control over the sales process. While you still have the ultimate say over what happens, many brokers have a particular way of doing things and will require you to make certain sacrifices. Listing your home on your own gives you total control over the marketing process, so you don’t have to make any concessions.
Cons of Selling Your House Without a Realtor
Could Take Longer to Find a Buyer
One of the primary benefits of hiring a broker is having someone who is working toward selling your property every day. While you’re at work or handling your other responsibilities, the broker will be marketing the property and interfacing with potential buyers. As a result, homes sold through a broker tend to sell significantly faster than those that are sold by the owner.
Out-of-pocket Advertising Expenses
One of the benefits of hiring a broker is that they often have access to marketing channels. For instance, owners can list their homes on the MLS without a broker, but they’ll have to pay a fee out of pocket. Many agents also use additional marketing channels that homeowners either may not know about or can’t access alone. So, without hiring a broker, all the advertising expenses must be paid out of pocket, which can get costly if you’re not experienced.
How to Sell Your House Without a Realtor
When you sell your home without a realtor, the process is entirely up to you. But here are the basic steps.
- Do some research: Do your best to estimate your home’s market value to determine a competitive listing price. You can do this by researching comparable home sales in your neighborhood or using online home estimating tools (keep in mind these tools may not be 100% accurate).
- Prepare your home to be shown: Next, you have to clean up the property and make any repairs you think may be necessary to find a buyer.
- Market the property: There are various ways you can market your property without a broker. For Sale signs, Facebook posts, or reaching out to friends and associates are good ways to get started.
- Vet any potential buyers: When you receive an offer, you’ll have to vet the buyer on your own. This means verifying that they have the money to pay for the home. A mortgage preapproval letter from a legitimate lender is a good start. However, you may want to do a background check or deep dive of their social media just to be safe.
- Review offers and negotiate prices: You may not want to jump at the first offer you get. So if you can secure multiple offers from qualified buyers, you’ll have to sift through them and handle the negotiations on your own.
- Have your attorney draft the contracts: It’s vital to have a seasoned real estate attorney if you do not hire a broker. They will be able to draft any important documents and give you advice if something isn’t right.
- Close on the home: Once you’ve agreed on a final price, the buyer will want to do a final inspection. Depending on what’s revealed, you may have to return to the negotiation table after the inspection. But once all that’s out of the way, the final thing to do is sign the contracts and hand over the keys.
The Costs of Selling Your House Without a Realtor
Even though selling your home without a realtor can save you money on a commission, there are still additional costs.
Any money you put into marketing will come out of your own pocket. This includes listing it on paid sites, running ads, or even doing things like staging the home or paying for cleaners to come in and spruce up the place.
If the buyer has an agent, you will also have to pay their commission. Although it’s possible to find a buyer independently, most of those searching for a home go through a broker. Plus, you will still have to pay all the associated closing costs such as attorney fees, title fees, escrow fees, transfer taxes, etc.
Alternatives to Selling Your House Without a Realtor
There are a few alternatives if you still don’t want to hire a broker, but you also don’t want to handle the sales process entirely on your own.
The easiest is likely selling to a cash buyer. These are typically investors who are willing to pay cash for a property at a discounted price so they can fix it up and sell it at a profit. They will often provide you with a fair offer the same day and can close within two weeks. But keep in mind that the offer will likely be rock bottom, so they have a healthy margin to make money off the flip.
The other option is hiring what is called a limited service agent. This is a brokerage that agrees to handle some of the responsibilities of a broker, such as overseeing the closing. But they may not assist with other tasks like marketing. The exact services offered vary depending on the company but are typically offered for a flat fee or discounted commission.
What Are FSBO Listings?
FSBO is short for For Sale By Owner. This means the owner is listing the home without the assistance of a listing agent. Many buyers prefer FSBO listings because it reduces the number of middlemen in the transaction.
But if the seller is not properly prepared for listing and selling a home, the transaction can get messy. So, if you are thinking of going the FSBO route, make sure you understand the process and make the right disclosures so the transaction will go smoothly.
Bottom Line: Should You Sell Your Home Without a Realtor?
Even though the prospect of selling your home without paying a real estate commission may sound tempting, the truth is that the vast majority of homeowners should sell with a realtor. While it may seem like a simple process, all kinds of issues can cause delays and lose you money if they are not handled properly. Brokers bring a wealth of experience to help you navigate these potential pitfalls.
Those with a background in real estate or experience selling homes may be able to handle the transaction successfully on their own. But unless you know the buyer personally, the sale will usually close faster with less friction if you hire an agent.