Selling A House Without A Realtor: All You Need To Know

Real estate agents do more than most people think to get your house sold. This includes an initial tour, recommending a sale price, prepping the home, marketing it, and shepherding you through the entire transaction. Having a complete understanding of what a real estate agent does will help you decide if you really want to do it yourself. 

The first thing a real estate agent will do to sell your home is tour it with you and give a complete analysis of how they would sell it. This includes recommendations for repairs or improvements you should consider, thoughts about staging, and an initial discussion of an asking price. 

They will also bring a summary of recent sales in the area to give you a sense of the local real estate market. Their unique experience and market research make this summary a valuable benefit for using a seller’s agent. That said, these tasks are not impossible to do on your own with a lot of research and hard work.

Next, your real estate agent would recommend staging companies, if needed, and set up professional photography. In most cases, you pay for the staging, and the agent pays for the photography. If you sell on your own, you need to research, schedule, and pay for all of these services.

Once the photos are taken, your real estate agent uses them to create your marketing collateral material. This includes a professionally written description of the home, brochures to hand out at showing and open house, online ads, and more. These types of high-quality marketing pieces are hard to create on your own if you have a FSBO home. 

The real estate agent then lists the property on their MLS (multiple listing service), which sends the home information to thousands of other websites where house hunters are browsing online. They will also usually do some paid online advertising, share the home with their buyer clients, and reach out to other real estate agents in the community to try and find potential buyers for your home. 

FSBO homes often end up using a real estate agent once they get this far in the process because they realize the networks available to them just aren’t as robust as a real estate agent’s. If you still want to sell your house without a realtor, you can find FSBO sites that will list your home and even use a service that will list it on the MLS for a fee (more on that later). 

If you get this far without a realtor and manage to get an offer on your house, the negotiations, paperwork, and other intricacies of the real estate transaction begin. Sellers agents are adept at working with the buyers agent and are experienced at working with title companies, lenders, attorneys, and all the other players in a home sale to get the deal to the closing table. If you are still intent on selling without a realtor at this point, consider hiring a real estate attorney to review all the contracts and other paperwork. 

Selling your own home without a realtor is pretty similar in terms of tasks that need to get done when compared to an agent-assisted home sale. The significant difference is that a real estate agent has been through it before and has the knowledge and resources to ensure it gets done right.

How Much Money Will You Save?

Time to answer the question that’s been floating around in your head. If I sell my house on my own, will I save money compared to using a realtor? When you look at what selling a house costs, real estate agent commissions are usually the most significant expense. However, many people think they get what they pay for and then some by using a realtor. In addition, costs that you would sometimes need to pay out of pocket are covered by real estate agent commission.

Many real estate agents will tell you that using them to sell your home will more than pay for their commissions. Usually, you will need to shell out 6 percent of the purchase price of your home. Half of that goes to your agent, and the other half goes to the buyer's agent. 6 percent is not a small amount. For example, if you sell your home for $250,000, you will end up paying $15,000 in real estate agent commissions. 

Your agent spends some of that money to sell the home, though. A few examples are photography, online ads, listing your home in the MLS, and fees they pay their brokerage. These items can cost anywhere from $1,500 to $3,500. Keep in mind that just because you don't hire an agent to list your home, you still might end up paying commissions to the agent that brings the buyer. 

One of the more valuable (yet misunderstood) things an agent brings is their brokerage. This entity holds the agent’s license and makes sure their work and all the transactions they complete are legal and within all regulatory standards. Essentially, your agent (and you) are covered if something goes wrong and things get litigious. If you do decide to sell FSBO, hire an attorney and save some of the money you saved in case you need to retain one after the sale if things get messy.

Is Selling By Owner A Good Fit For You?

Do you like complicated transactions? Are you comfortable creating and implementing a multi-faceted marketing plan? Do you have the time to take on another full-time job for a few months? If the answer to these questions is yes, you may be able to sell your house without a realtor. If the answer is no, you may want to leave things to the professionals.

Selling FSBO is about your comfort zone and knowledge regarding the many parts of a real estate transaction. Look at the step-by-step process we outlined earlier. Does all or part of it fit with your style and expertise? Or do you think it sounds like a ton of work you are not interested in?

Think about your timeline as well. Do you need to sell your home quickly? If so, using a real estate agent is probably a good idea. On average, FSBO homes sit on the market longer than homes listed with an agent. This has to do with the increased exposure an agent brings to a house and buyer’s agents’ reluctance to show their clients FSBO homes. 

Lastly, be sure you are actually going to save money if you sell your house without a realtor. In your local market, you may find that homes listed FSBO end up selling for much less than homes with listing agents. Do the research and make the calculations before deciding if FSBO is suitable for you.

How Much Taxes Should You Pay On The Sale?

Speaking of calculations, one of the many number-crunching tasks that accompany selling a home is figuring out the taxes you will need to pay. This can vary significantly by each unique real estate transaction. 

You will likely need to pay property taxes, capital gains tax, and transfer tax. This isn’t always the case, though. For example, there are exceptions to paying capital gains tax if you are selling your primary residence. 

The numbers are complicated, and the rules vary greatly, so do your homework on the taxes you will be responsible for if you are looking to sell your home on your own.

Understand The Risk And Obstacles

If you think selling your home without a real estate agent is a good idea, make sure you understand what can go wrong, so you aren’t blindsided. First, your house will likely sit on the market longer unless you are in the midst of a hot seller's market where FSBO sellers don't have much trouble finding buyers. In most cases, though, you will need to be patient.

You will be more exposed legally as well because you don't have the backing of a real estate agent and their brokerage if things go sideways. Consider hiring a real estate attorney (more on that to come) to help with this risk.

Be prepared to get less for your home as well. As previously mentioned, homes listed with agents usually go for a higher sales price. Lastly, understand the time commitment. Being a real estate agent is a full-time job - one you are going to take on for a significant amount of time if you decide to sell your house on your own.

Prepare The House For The Market

If you have decided to be an FSBO seller, the first step is getting your home ready to sell. This includes determining the value, staging, increasing curb appeal, taking photos, and writing a glowing description of the house.

Determine How Much Your House Is Really Worth

Realtors have a plethora of tools to determine your home’s worth when they recommend an asking price. If you are going it alone, you will have to do this work yourself. Check the tax records for recent sales in your neighborhood to see the average home sale price. 

Once you find sales comparable to your home, tweak the numbers based on the differences. For example, if a home has more square footage than yours, take down the sale price of that one to get closer to what you can expect. If your home is more updated, bump the price up compared to a similar home with outdated finishes. 

Stage And Add Curb Appeal

Staging is an essential step in getting your house ready to sell. Professional stagers understand the right furniture and other choices that will make your home sale-ready. It usually costs sellers anywhere between $2,000 and $4,000, but it pays off. For example, a study conducted by the National Association of Realtors found that 21 percent of real estate agents said staging increases home value by 6 to 10 percent, and twenty-nine percent said it raises the value by 1 to 2 percent. 

Staging only helps when they walk in the front door, though, so what about when they walk up the driveway? Make sure your shrubs, exterior paint, and other outside features are in tip-top shape before you sell. You don’t want buyers finding a deal-breaker before they even get inside.

Take Photos

Hire a professional photographer to take your photos. Trying to do it yourself on your phone is not a good idea. They will end up looking…well…unprofessional. Potential buyers scroll through photos online long before they decide to tour a house in person. Professional photographers know the best angles and lighting to present each room in the best way possible. It will cost you between $200 and $500, depending on the size of your home, but it’s worth it.

If you have a large parcel of land or a particularly unique property, consider getting drone pics and videos as well. The goal is to make online home browsers feel like they are seeing the property in person before they set foot on it.

Describe Your Home To Potential Buyers

Writing a good description of your home is a bit of an art. It requires attention-grabbing language and a summary of the key selling points. If you don’t want to hire a professional, start searching for homes online as a buyer would. What descriptions catch your eye? What features that you care about are mentioned? What features are listed that seem unnecessary? Take ideas you like and leave the ones you don't.

Once you have crafted that perfect description of your home, use it in as many ways as you can. Online listings, emails, texts, and every other form of written communication you use to promote your home should have the same message. You can even turn it into a script for talking with people in person about the house.

Now that you have everything ready to go, it’s time to list the house and find that perfect buyer. Or, even better, find multiple buyers who will get into a bidding war over your home.

List A House By Owner With A Flat-Fee MLS Listing

The first step is getting your photos and description in front of the eyes of as many possible buyers as you can. This means it needs to be listed on home search sites like Zillow and Realtor.com. When a realtor lists it in the MLS, it goes to all these sites. If you want to get it listed yourself, you can contact each site and ask them to list it as for sale by owner. This usually doesn't cost anything, but it will take some time to upload the description, photos, and any other media you have (like a drone video, for example).

This can be a disadvantage, though, because some buyers don’t even look at FSBOs. The perception is that without an agent involved, the deal will be less likely to get to the closing table. Also, a buyer’s agent looking for homes for their clients might pass FSBOs up, thinking they might not get a commission if their client decides to buy that house.

One solution for this is to contact a flat-fee MLS listing company. You pay them upfront (usually between $500 to $2000), and they list the property for you on the MLS. You still need to do everything else, like taking calls, negotiating price, etc., but the listing will appear everywhere it needs to online.

Promote, Promote, Promote

Once you have the home listed, promote the heck out of it. Email all of your contacts, call everyone you know who might be interested in buying it and consider online advertising. Sites like Facebook allow you to target specific geographical areas around your home with an ad showing pictures of the house and a description of the features. 

If the home stays on the market longer than you’d like, drop the price and then promote it again. The market will tell you pretty quickly if you need to adjust your asking price.

Hire A Contract Attorney

If you are selling FSBO, a real estate attorney must be an essential part of your home selling team. They can read through contracts, help you understand the fine print, and make sure you have all the necessary documents for completing a sale. 

If you skip this part of the process, you will likely need to hire a real estate attorney during, or even after, the sale process is done to clean up the inevitable legal messes. Get them involved in the beginning to save yourself from headaches down the road.

Make Sure The Buyer Can Actually Afford The House

So you got an offer on your home. Hurray! Now you need to make sure it is legit. Have the buyer include proof of funds if they are paying cash. This can be in the form of a letter from their bank or a screenshot of a bank account with the necessary funds to purchase your home at the agreed-upon price. 

If they use a mortgage loan to buy the home, have them send you a preapproval letter from their lender. Once you receive it, call the lender to talk things through to make sure the buyers are well qualified to purchase your home.