Are you thinking about selling your home without a REALTOR®?
Some homeowners choose this option but not necessarily the most common. The National Association of REALTORS have noted that about 8% of sellers sold their home For Sale By Owner (FSBO) while less than 2% of sellers sold their home to a home directly to a buying company. While this is a riskier option, it’s not impossible to complete a transaction without an agent.
There are two options normally pursued when doing it yourself: 1) Sell to a cash buyer and/or home buying company and 2) Market it yourself as a For Sale By Owner (FSBO)
Option #1: Sell your house to a cash buyer
One way to complete a fast sale, locate and consider selling your house directly to a cash buyer company such as I-Buyers, house buying companies, or investment groups. These entities purchase properties outright and promote the convenience and certainty of your sale.
You can sometimes avoid home inspections and repair requests. Most cash buyers will not require you to complete repairs and in most cases will not require a home inspection at all. Next, it is convenient not to have to prepare for an open house and home showings to potential buyers. No worries about cleaning or last-minute walk-throughs to see your home. Some homeowners remember what it takes to load up the family and pets just so you can disappear for an hour. Lastly, you can stop planning that needed upgrade or room painting. Again, because this is an as-is purchase, you won’t be hiring any contractors to visit and price out a job. You can also bypass normal updates needed to increase your home’s marketability and attract buyers. Yes, no decluttering, staging, painting, and updating hardware and fixtures just to make the sale.
The sale price in most cases is much lower than expected. Remember, easier comes at a price. The cash buyer’s strategy is to acquire your property at a discounted price so that they can make a profit after their upgrading process. Studies reflect that cash buying company fees could cost sellers 14% to 20% of a home’s sale price; these is significantly higher than real estate agent commission which is usually around 6%. So, if your home sells for $400,000, you’ll be walking away from about $56,000 of your home’s equity. They will only purchase your home if they can earn the best profit possible. They have experience knowing that some owners are willing to sacrifice money in exchange for speed and convenience.
Time for self-promotion: So… What is a “REALTOR”
Oftentimes, the term REALTOR® is used interchangeably with real estate agent. However, the two are not the same—REALTORS® are real estate agents, but not all agents are REALTORS®.
In my opinion, a REALTOR is an expert who will search for your dream home. Help you negotiate to get it. And then spend time in your community to help make it better for everyone. Now ask your home search app to do that…
Option #2: Sell your home on the open market without a real estate agent (FSBO)
Sellers are often drawn to FSBO because they want to save on agent commission and control the entire process. However, with added control comes responsibility. You’ll need to advertise and market the listing, price it accordingly, and host walk-throughs and open houses.
Few homeowners are willing to take on these tasks and risk selling their homes for less. In 2018, the National Association of Realtors shared that FSBO sales accounted for only 8% of home sales, the lowest percentage ever since data collection began in 1981. But if you’re savvy at marketing, home design, networking, and negotiating, you may just pull it off.
You save on real estate agent commission fees, which usually sounds great. That amount will increase your net amount after the sale. Now there are advertising platforms for your home to be listed on a website (which costs around $325 and a monthly fee thereafter) or you can always try your personal Facebook page. And, good to know is that you can still list your home on the Multiple Listing Service (MLS) to ensure you reach the most homebuyers possible. Using a flat-fee listing service can range from about $250 to $500. Remember, you will need to provide the photos, information, and the verbiage to tell everyone about your home.
Statistically, you’re likely to sell your house for less money than if you hired a Realtor®. Real estate agents sell homes for around 7% more than FSBO sellers do, according to historical data. Nationally, the typical FSBO home sold for $287,900 compared to the $307,200 that agent-assisted homes sold for in 2021. Most commonly, why FSBO homes usually sell for less, is that Buyer’s agents out-negotiate FSBO sellers. Homeowners often miss the mark in setting a competitive listing price. And when they price their homes too high, their home sits on the market, leading to lower offers over time. Notably, a home inspection report could reveal issues that the seller struggles to address efficiently. They may concede to too many repairs and lose money or they may counter back ineffectively and influence the buyer to leave the deal. Lastly, FSBO is time-consuming: You’re in charge of marketing, communications, and scheduling all the tasks. In addition, you’ll need to plan and prepare for personal safety, wire fraud, phishing scams, and any negative feedback about your home that you have enjoyed for years.
If you’re planning to go this alone, be ready for a part-time job. Understand, the trade-offs before selling your house without a Realtor® is only the first step. Having a solid understanding of what your responsibilities will include and what you might sacrifice in the process. Remember, every home sale process has its positives and negatives.
But do keep in mind, we love real estate, and helping others. Watch the YouTube video HERE.
So, feel free to call anytime 800-584-1490.