How to Sell Your House Without a Realtor
You’re ready to put your house on the market, and you’ve decided to go it alone.
Are you really saving money?
By far, the most common reason for someone to try to sell a house without aRealtoris to save money by avoiding a commission fee.
“This is a very valid reason,” saysDeb Agliano — Re/Max Andrew Realtyin Medford, Massachusetts. “The problem is, buyers know the seller isn’t paying a commission, so they take that into consideration and make a lower offer.”
Like any other real estate transaction, the final sale price, and who pays for any commission, a home warranty and closing costs are all negotiable. Sellers without an agent need to be savvy in order to come out on top. According to the National Association of Realtors, in 2014 the average For Sale By Owner home sold for $210,000 versus $249,000 for a home sold by a real estate agent.
“In most cases, people think they won’t pay any commission at all,” says Jason Bowman ofThe Jason Bowman Team at Re/Max Elitein Mason, Ohio. “But if the buyer has an agent, you’ll have to pay their 3 percent commission. And the fundamental problem is, the buyer’s agent represents the best interest of the buyer — and you wouldn’t know the difference because you’re not entrenched in the business every day.”
In the hunt for a new house, K. Lee Tumlinson Jr., of Peyton, Colorado, wanted to buy a FSBO property. He says he’s thankful his real estate agent, Ami Quass, was willing to tackle the extra paperwork produced by a seller who was unsure of the process.
“The Realtor ends up having to represent both parties, once both parties agree to start working a deal,” he says. “Which means the Realtor ends up having to be not only the buyer’s Realtor, but also has to accomplish work that normally a seller’s Realtor would do. The seller agreed to pay commission.”
Selling your house yourself requires meticulous attention to details in order to obtain the optimum price and avoid litigation after the sale.
Do you really have the time?
It’s after dinner — you’re curled up on the couch watching TV, and there’s a knock at the door from a potential buyer (or maybe just a nosey neighbor?). Is it safe? Is it legitimate? How would you know?
“Does a potential seller really want to answer calls or a knock on their front door from complete strangers and invite them into their home for a look?” asks RealtorDeborah Colmanin Folsom, California. “An experienced agent will meet with and pre-screen a potential buyer prior to showing homes. The agent will also ensure that buyer is preapproved for the price range in which they’re looking.”
Safety and privacy are also points to consider when you’re selling a house without a real estate agent.
“Realtors have sophisticated tracking devices when monitoring your home during a sale process,” saysJonathan D. Reed of Fairfax Realtyin Fairfax, Virginia, noting that any agent showing a home must seek permission, schedule an appointment and obtain a unique security code to access the house. “A Realtor can screen visitors to your home, and follow-up with clients who have toured the home.”
Do you pay attention to details?
“The list for potential mistakes is huge,” says Realtor Erick Monzo ofKeller Williams — The Monzo Groupin St. Clair Shores, Michigan. “Unless you know how to read closing documents, fill out purchase agreements, and calculate the true value of a property. Every state has different laws and regulations in regard to real estate transactions. I believe the scariest mistake is not crossing your T’s and dotting your I’s — you leave yourself open to future litigation.”
Diament agrees, and says the biggest mistake For Sale By Owners make is underestimating the complexity involved during the entire process.
“I’ve heard lots of stories of deals falling apart after the buyer and seller have agreed on the terms, but then financing collapses,” she says, noting that a Realtor’s job is to pay attention to the details at every step along the way.
“The general public isn’t aware of all that is involved to get a home ready to sell,” Colman says. “They don’t see all that’s involved in shepherding a transaction to a successful conclusion, including the many deadlines, dozens of mandatory documents, hundreds of emails and phone calls. It’s a full-time job.”
How to Hire a Good Realtor
Dear Angie: How can I select a good Realtor? What questions should I ask to get one that is reliable and honest? – Frank K., Arlington, Texas
Can you spot a scam?
Or perhaps, are you cognizant enough in real estate to recognize if someone is taking advantage of you?
“Buyers feel they may be able to leverage a better price and or incentives for the home because the seller often lacks the skills and knowledge to negotiate,” Reed says. “Most buyers employ an agent to represent them and would have the agent’s experience on their side.”
Monzo says For Sale By Owner properties also tend to attract the seasoned investor looking for a great deal.
“That FSBO sign in your front yard screams ‘I’m desperate and gullible,’” he says. “The advantage of looking for FSBO’s is to take advantage of them.”
After spending several weeks searching for a new home in Las Vegas, TaChelle Lawson stumbled across a property listed For Sale By Owner on Craig’s List.
Working with real estate agent Dina Cochran — Realty One, Lawson says she got the house for a steal.
“Simply put, the seller really had no idea about selling a home,” she says. “I was able to buy it for less because I don’t think the seller understood what the home was worth, and was also very anxious to sell. I personally would never list a home without a Realtor. There’s a lot I just don’t know and they do.”
Will you end up hiring a Realtor anyway?
According to NAR, For Sale By Owner properties accounted for 8 percent of home sales in 2014. Oftentimes, homeowners unsuccessful at selling their homes will seek out the professional services offered by a real estate agent.
“I’ve been approached by several individuals after they tried themselves for months to sell their home,” says agentMichael Winslow – Blue Picket Realtyin Colorado Springs, Colorado. “They were tired of entertaining strangers knocking on their door and calling at all hours of the day and night, and weary of not being able to encourage those potential buyers to prove their financial ability. Not to mention trying to navigate the necessary disclosures, contracts and closings.”
Hiring a Realtor with a history of proven success can offer you peace of mind that any real estate transaction will be handled with the utmost professionalism.
“Selling a home is a complex process with many pitfalls, which can mean either receiving less money or potential legal liability or both,” Agliano says. “Working with a good real estate agent helps you overcome these issues so you net more money and won’t worry about problems coming back to you after the sale.”