It's common practice to hire a real estate agent when selling your house. But you don't have to hire a real estate agent or Realtor once you're ready to put your home on the market. By forgoing that help, you could save yourself a world of money. On the other hand, there are benefits to working with a real estate agent you'll miss out on if you sell your house yourself. Here, we'll discuss the pros and cons of listing homes as for sale by owner, or FSBO, so that you can make the right decision.
Benefits of selling a home without a real estate agent
There are plenty of good reasons to avoid hiring a real estate agent or Realtor and instead go the FSBO route when listing your home.
1. You'll save money by not paying a real estate agent commission
Real estate agents typically charge a commission equal to 5% to 6% of a home's sale price. If you're selling a more expensive property, that's a lot of money to give up. With an FSBO transaction, you don't pay those fees, which means you get to keep more of your sale proceeds for yourself.
2. You have complete control over the sale process
When you hire a real estate agent, you have to work around that person's schedule. But with an FSBO home, you get to do things on your own timeline. You can schedule an open house when it works for you, allow each potential buyer into your home at a time you're comfortable with, and generally call the shots from start to finish.
3. You'll have someone dedicated to moving your home off the real estate market: yourself
The longer your home sits without a buyer, the less likely you are to get your asking price. And because real estate agents can be spread thin, you may find that if you go the FSBO route, you move your home off the market more quickly.
Drawbacks of selling a home without a real estate agent
On the other hand, there are some disadvantages you may encounter when you decide to take an FSBO approach.
1. You may not get the highest sale price
One thing a listing agent is apt to be really good at is determining a home's list price. Without the help of a Realtor, you might struggle to price your home appropriately. That means you might either get shortchanged on a sale, or you might struggle to find buyers at the price point you land on.
Furthermore, unless you're a lawyer or work in sales, a real estate agent may have a lot more experience negotiating than you. Without one, you may be up against a buyer's agent who talks you down from the price you really want for your home.
2. You might struggle to market your home
Real estate agents are expert marketers who know how to reach and draw in buyers. As a solo home seller, you might really struggle with this aspect of selling a home, which could leave your home sitting on the market longer than you'd like.
3. You'll need to sink a lot of time into selling your house
Real estate agents don't get paid just to greet potential buyers at the door. They take on all of the legwork that comes with selling a home, including listing it, marketing it, and in some cases, staging it. If you go the FSBO route, be prepared to spend every free hour you have dealing with the sale of your home.
4. You're more likely to waste your time
A real estate agent can vet potential buyers before they come to scope out your home. You, on the other hand, may not have the ability or capacity to do the same, which means you could end up wasting your time showing people around your property who don't have the means, or desire, to actually buy it.
5. You'll miss out on the insight a real estate agent can give you
As a homeowner, you might love your quirky yellow walls or offbeat bathroom tile, but buyers may not. The good thing about hiring a real estate agent is that that person can ground you and advise on the changes that should be made to your home prior to listing it. You, on the other hand, may get caught up in your emotional attachment to your home, or certain aspects of it, and make poor choices that make it harder to sell. Or, you might fail to talk up your home's best selling points in your listing, like its newly refurbished deck or spectacular curb appeal.
Tips for selling a home yourself
Clearly, there are pros and cons to selling a home yourself. If you're going to attempt to do just that, keep the following pointers in mind:
1. Use FSBO websites
There are specific websites where sellers can list homes and make buyers aware they're on the market. These include FSBO.com, Zillow, and ForSaleByOwner.com. Some FSBO sites are free, while others charge a modest fee.
2. Use social media to your advantage
If you have a social media presence, use it to market your home. Create a virtual tour and post a link, and invest in high-quality pictures. And also, encourage your connections to share.
3. Ask for input
As a homeowner, you may have trouble deciding which elements of your home need updating before listing it and which can stay the way they are. It pays to invite friends and neighbors over to critique your home so you're made aware of potential deal-breakers or turn-offs that are easily fixable.
4. Get a good real estate attorney
If you're navigating the home sale process without a real estate agent, you'll need solid legal help to compensate. Make sure you hire an attorney who's willing to be patient, as he or she may need to explain certain aspects of the closing process that a real estate agent would otherwise loop you in on.
5. Research the local market before you list
When you're selling a home, it's important to land on the right price for it. Demand too high a sale price and you'll turn buyers off. Ask for too low a sale price and you'll lose money. Prepare to spend time looking at comparable homes that have sold in the area or that are currently for sale, and consider attending open houses in the area to get an idea of what your home should be listed for.
Should you sell a house yourself or hire a real estate agent?
Not everyone has the patience to navigate the home sale process solo. If you're torn between selling a home yourself and hiring a real estate agent, you may want to ask yourself:
- How saturated is the local real estate market? If your local market is loaded with competition, you may want to hire a real estate agent.
- How much time do I have to spend marketing my home? If you work a lot and your hours are limited, hiring a real estate agent could make more sense.
- How much money can I really save? Real estate agents often get you enough money on your home sale to cover their commission and then some. And remember, real estate agent fees are negotiable, so you may find that hiring one is more affordable than you'd initially think. For example, an agent might agree to a flat fee to sell your home rather than take a percentage of its sale price.
Ultimately, selling a house yourself could work out very well. Just be aware of the pitfalls you might encounter if you go the FSBO route.
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