Homeowners putting their house on the market often consider the “for sale by owner” (FSBO) option to reduce closing costs and avoid paying a real estate agent’s commission.
The largest challenge facing FSBO sellers without a listing agent’s help is ensuring that everything that must be completed is done promptly. There are dozens of time-consuming steps, multiple legal documents that must be reviewed and filed, and giving prospective buyers a walk-through of the house and answering any questions.
Not being prepared for selling your own home can be an all-consuming hassle that is both exhausting and stressful. Fortunately, however, with planning, you can get to the process of closing a deal.
So, can you sell a house without a realtor? Read this guide if you are considering selling your home without using a real estate agent to save on commission fees. The advice here will help you figure out if trying to sell your own home is a good decision and, most importantly, where you need to start that process.
How to Sell a House Without a Realtor
The first step for all home sellers is understanding how much work is required to sell your house on your own. Succeeding with FSBO homes is not as simple as cleaning the place up, throwing up an ad on craigslist or Zillow, waiting for a few hours, and selecting the best offer of many offers.
There is a lot of prep work, including managing the process of showing the home and then closing the deal that goes into every home sale. In most cases, the amount of work for the average homeowner is too much to pull off successfully.
Because of that, once most sellers discover how much goes into real estate transactions, they opt to work with a realtor.
The Process in a Nutshell
The following is a short list of the many steps needed for a successful FSBO home sale experience.
You first have to conduct a comparative market analysis on the real estate market in your area and identify pricing for comparable homes. Then, you must determine the approximate market value of your own home and identify a listing price. After that, you need to decide if you want to have an independent home inspection completed to give you a sense of what work is needed.
Deciding to have a home inspection, which a potential buyer usually initiates, is a smart idea when selling your home by yourself. Repairs, upgrades, or renovations that are needed can turn off some buyers and drive down both the market value and any negotiated purchase price of your home.
Positioning the Property
Once any needed work is completed, you should have professional photos taken of the home and property. Professional photos help you emphasize any curb appeal, improvements to the property, and special features that justify your asking price.
Since you will not be using a brokerage or seller’s agent, you will not have access to a multiple listing service (MLS,) which puts you at a disadvantage. Instead, you will need to use social media and platforms like Zillow, craigslist, and others to ensure your property gets seen by potential buyers. Additionally, you will need to conduct at least one open house.
After an Offer
When an offer comes in, you should consult with a real estate attorney, especially if there is a counter offer to the sale price or stipulations the prospective buyer wants. You can probably negotiate a flat fee for them to review any offer and subsequent purchase agreement.
Having a lawyer look over your sale documents is especially important if you are negotiating a selling price with the buyer’s agent, as they will certainly have a lawyer looking at their documents. A lawyer can also help you set up escrow accounts and advise you on applicable warranties.
In addition, a real estate lawyer can help you navigate the local system regarding the deed transfer, payment of any applicable fees, and property taxes. You can go it alone, but spending a little extra money on an attorney ensures that you do not overlook something and that any outstanding liens, fees, or taxes are covered before they become an issue with the sale.
Pros and Cons of Selling a House Without a Realtor
Have you been wondering, “can you sell a house without a realtor?” If so, there are good and challenging aspects to selling your home yourself that you should know.
- You can control every aspect of the sale process, including setting the home value and the budget needed to get the property ready for sale.
- No fees or commissions for a real estate broker.
- A middleman is cut out of the process, making negotiations flow more smoothly.
- It is a ton of work.
- You are unfamiliar with the process, making it easier to overlook needed work.
- The time commitment can be immense and require a lot of nights and weekend work.
Cost Savings Made By FSBO
The most obvious savings is avoiding having a commission taken out of a sale price by the real estate broker. Part of the commission savings will cover costs you incur by managing the home sale yourself.
With that in mind, you may want to put together a list of fees, including an amount that covers the time you will expend, and then do a cost-benefit analysis.
You may find that the cost of your time, plus the cost of covering specific administrative and management tasks yourself, will eat up any savings you accumulate by selling the home yourself.
The reason for this is that your local real estate agent already knows what to do, has the connections and equipment to do it, and will not make any mistakes along the way.
FSBO has even more advantages if you avoid common mistakes sellers make, particularly when selling a home for cash. These mistakes include, but are not limited to:
- Setting an unreasonable price
- Selling out of season
- Spending too much to prepare the house
- Forgetting to cover costs like taxes, etc.
If you can avoid those mistakes, the savings picked up by FSBO can be very significant, but you must have them covered in advance, or you risk losing any savings to unnecessary costs or by not getting what you need from the sale price.
Selling to Cash Home Buyers
Some prospective buyers might make you a cash offer. Why sellers prefer cash buyers is fairly obvious. A direct cash sale reduces the need to deal with a lender or title company.
Cash offers come with the expectation that you will reduce the sale price because you do not have to worry about as many closing costs when selling a house or dealing with a lender or title company once the transaction goes through. Many cash home buyers in Philadelphia will handle all the paperwork and accounts, making your selling job easier.
If you are negotiating with a cash buyer, make sure you consider all aspects of the impact getting a great deal of cash can have on you:
- Taxes associated with a large lump sum of cash
- An expected reduction in the asking price
- Whether you would consider an owner-financed sale
So, can you sell a house without a realtor? Yes, you can! The FSBO arrangement cuts out the real estate agent and can save a home seller money by them being able to avoid paying a broker’s fee.
However, it is a lot of work, and there are pitfalls. Making sure you have access to sound legal advice is highly advisable before agreeing to any sale.