Many reasons can influence you to sell your house. You may need a bigger home to accommodate your growing family, use the money from the sale to diversify your investments, or it may just be a financial need. Regardless, you might want to consider a “sell your house yourself” approach, deviating from the norm of acquiring the services of a real estate agent.
Nowadays, you can sell your house yourself due to a growing trend of For Sale By Owner (FSBO) listings. You can take advantage of this route as it facilitates homeowners who don't want to sell their homes with services from a listing agent or third-party broker. Many FSBO services are available online, like this one, helping you form a listing to advertise your house for sale. Additionally, some of them put up your listings on the Multiple Listing Service and real estate websites like Zillow to advertise your home to a maximum number of buyers.
Let's explore some of the reasons why it's more beneficial to sell your house yourself via FSBO.
Gives You More Control
When you're trying to sell your home, buyers won't approach you directly; instead, it is more likely that real estate agents representing the buyer will show interest. Realtors are more accustomed to dealing with other real estate agents; hence they have to convince them of the trade, but this time it'll be you representing yourself. You know what's best for you and realize the value of your home, what the lowest price you'll be willing to go for is, and how best to negotiate.
If you employ the services of a real estate agent, they won't just be aiding in the sale of your house but also have to look after the needs of countless other clients. Therefore, they cannot focus on you the whole time and may miss out on any potential buyers that come knocking. When you sell your house yourself, you can divert all your attention to incoming buyers and negotiate in person or by any other means, deciding on important factors like timing and availability. It also makes it easier to cross out any potential buyers that don't seem interested or serious.
Prevents Fraud and Low Balling
There are two ways a real estate agent makes money – receiving huge commissions on fewer properties or getting smaller commissions on a higher volume of properties. Your real estate agent will never tell you how many homes they sell; hence they may try to accept low ball offers from potential buyers in hopes of receiving a commission quickly so they can move onto the next listing. Let's look at it mathematically.
For example, your original listing price for the house was $250,000, but your real estate agent convinced you to settle on a $200,000 offer by misrepresenting facts about your property. You stand to lose $50,000 plus closing fees; however, at say 5% commission, the agent stands to lose only $2500, which they can easily cover by making more sales.
It's Easier Than You Think
Like any endeavor that involves money, selling your house yourself greatly depends on how much time you have on your hands and how much effort you're willing to put into it. But, the process itself is pretty easy. The first thing you'd want to do is get a fair price for your house. Real estate agents do what's called a Comparative Market Analysis (CMA) to obtain a valuation for your house.
It entails comparing recent home sales in your area that match your house's features to get a fair price estimate. Although it's true that only real estate agents have access to the Multiple Listings Service (MLS) that allows them to conduct a CMA with ease, you can perform a CMA on your own as well. It may be challenging but not impossible, plus it's the only big hurdle in your way. You can look up recently sold homes in your area using real estate websites.
Search for sold homes within the past six months and apply appropriate filters to match your house's square footage, rooms, and amenities. It'll be useful to gather and print this information out for use in negotiations. Additionally, you can reach out to new buyers in your area if they're comfortable.
Once you settle on the asking price, the rest of the process is the same. Prepare and maintain your house, take good photographs for your listing, place FSBO signs and ads at high volume places, and organize an open house to improve your chances of attracting buyers or their representatives.
You Get to Save Money
The obvious advantage when you sell your house yourself is that you get to save money by not having to pay a commission to a third-party real estate agent. A real estate agent's commission is not fixed but generally ranges from 4-6%, depending on how reputable and sought after their firm is. Even this small percentage can amount to thousands of dollars if you consider that the average prices of homes in the US are reaching $400,000.
You may still have to pay the buyer's agent a commission for bringing in a buyer, but they'll be willing to negotiate on the commission as they'll only handle the buyer's side of the transaction. Additionally, you won't have to pay any listing fees but instead for the services you took from the FSBO website. These charges are nothing compared to listing fees, and you only pay for services you opt for.
A small chunk of the money you save will go towards closing costs required to transfer ownership from you to the buyer. Even then, depending on the agreed sale price of your home, you may be left with a significant sum of money.
Selling a house with or without a realtor presents its own challenges. If you decide to sell your house yourself via the FSBO approach, make sure that you can dedicate enough time and energy to it so that you sell your house in a timely fashion. When dealing with real estate agents, make sure that you come across as a person who's willing to negotiate.
You can achieve this by doing your homework before listing your house for sale. This will improve your chances of securing a good deal and prevent you from getting a bad reputation in the real estate community.