How to Sell Your House Without a Realtor
Here’s the scoop: you don’t have to use a realtor when buying or selling a house. In some cases, it may be more beneficial to sell your home without one. It sounds scary, like going into uncharted waters without a compass, but the end result is skipping the realtor fees and getting more bang for your buck on your house sale. So, let’s learn about how to sell your house without a realtor.
The Case of Selling Without a Realtor
The best scenarios of selling your home privately typically involve you selling your home to a cash buyer or someone you know. If you need to sell your home quickly, then a for-sale-by-owner sale is probably the best route for you. Usually when you sell your home privately, you can forgo the home inspection and sell the home as is, speeding up the process.
Even though you are not using a realtor, you can still have a real estate attorney draft an airtight contract that protects you in the sale. If you are selling a home privately on the open market with no potential buyer in mind, you will need to be prepared to take on the responsibilities and know what to expect.
The Pros and Cons
A Quicker Sale
According to the National Association of Realtors, 77% of privately sold homes sold in under two weeks in 2020. Many for-sale-by-owner situations involve a cash sale or a sale to someone you are friends or acquaintances with, which makes the process go by quickly. In most for-sale-by-owner sales, a home inspection is also bypassed. That saves time on both the buyer’s and seller’s end, making these sales typically finalized in a matter of a fortnight.
Selling As Is
Selling a home privately can mean that you are able to skip a home inspection as part of your sale. Not only does this speed up the process, but it creates an understanding between you, the seller, and your buyer that they are getting exactly what they are seeing. As is means you aren’t obligated to fix, replace, paint or update anything on your end. For situations when you sell for cash to a buyer, this can work out quickly and you have the benefit of avoiding costly upgrades and repairs.
Skipping the Realtor Fees
When you don’t use a realtor, you can easily save up to 6% in commissions. Sure, 6% doesn’t sound like a lot, but if you are selling a home valued at $300,000, that is a whopping $18,000. Although you are going to work for that extra 6% of cash in your pocket because you will be in charge of communications and marketing, it is still not chump change by any means.
The Case of Selling With a Realtor
If you are uncomfortable taking on the duties of a realtor, like marketing your home, negotiating sale price and communicating with potential buyers, then hiring a realtor is the best course of action for you. In some cases, realtors can incite bidding wars by pricing your home just right, which ends up making you more in the sale despite having to pay their commission fees.
Using a realtor works well in cases when you don’t have anyone in particular who you are selling to because navigating the open real estate market can be quite tricky to do on your own. If you have never sold privately before or simply don’t have the time to take charge of a private sale, then a realtor can also be helpful.
A Higher Payout Isn’t Guaranteed
Let’s face it — realtors know their stuff. They’re trained to understand market trends and have plenty of experience selling houses of all shapes and sizes. Their veteran knowledge is what you would be missing if you sold your real estate privately, which means you could end up selling your home for less.
It’s a gamble because although you are skipping the realtor commission fees, you are statistically likely to end up making a little less than you would with a realtor at your side. Realtors know how to price a house just right to incite bidding wars, and although that does tend to drag out the sale, the right price could end up with more money on your end.
Less Work for You
If you have got a busy schedule between work, family and everything else life throws at you, then consider hiring a realtor. A for-sale-by-owner situation means you would be marketing your house all on your own. Staging, photographs and contacting and showing your home to potential buyers are responsibilities that all fall into your lap. It’s time consuming and exhausting. A realtor takes charge of all of this for you — it is what you pay them for.
How to Sell Real Estate Privately
So, you have decided to sell your home without a realtor. Check out this step-by-step process that shows you just how to sell your real estate privately.
Step 1: Research Value and Price
Your first step is establishing what your home is worth and setting a sale price. Keep these things in mind:
- Look to see what neighboring homes sold at and how quickly they sold.
- Search realtor websites for closing information on homes in your neighborhood.
- Use online tools to help calculate what your home is worth.
Once you begin to get a feel for what homes near you have sold for, price your home to sell. Your goal should be to set a price that draws in buyers and won’t have your home sitting on the market for too long. Going too much over the average in your area can drive buyers away.
Step 2: Prepare Your Home for Sale
If you are looking to sell your house now, selling it privately is often a way to fast track the process. While you don’t need to spend a tremendous amount of time and effort prepping your home, you do need to make sure it is in at least a sellable condition. The goal is to attract buyers and not allow your home to stay stagnant on the market for too long.
Here are a few quick fixes you can do to make your home ready to sell:
- Replace lightbulbs.
- Repaint bigger rooms a more neutral color.
- Pack at least half of your belongings.
- Tidy up bathrooms, kitchens and bedrooms.
- Replace outlet covers.
Step 3: List Your Home on Multiple Listing Service
Create a Multiple Listing Service (MLS) listing for your home to widely market it to potential buyers. Multiple Listing Services are databases created and maintained by real estate agents, brokers and professionals. MLS is used by these real estate professionals to help their clients — potential buyers — hunt for their dream home. When you sell your home privately, an MLS listing can be a powerful aid to reach a wide net of potential buyers.
Step 4: Market Your Home
Once your home is listed and ready to go, it is time to get into the thick of it with marketing the sale. Here’s a glance at what that exactly involves:
- Mimic what professional real estate agents do for their clients, like placing yard signs, marketing online with sale postings and mailing out flyers.
- Communicate with potential buyers by fielding phone calls and emails.
- Schedule tours and meetings in-person with potential buyers.
- Follow up with buyers via phone calls.
Step 5: Review and Negotiate Offers
You’ve captured the interest of buyers and hopefully you have several offers to consider. Review and compare these offers and keep in mind that there is more to an offer than just the sale price. Examine any stipulations or requests that buyers may have included in their offers to see if the deal will end up being beneficial for you or tend to sour the overall deal.
Things to consider when reviewing offers:
- The sale price.
- The buyer’s requested closing timeline.
- Rent back periods.
- Other contingencies that may hinder (or sometimes help) the deal.
Step 6: The Paperwork
Selling your home privately does still come with all of the paperwork — only when you don’t have a realtor, you will have to handle this yourself. However, you won’t totally be alone at this part of the process. Hire a real estate lawyer to help draft an airtight contract that protects you in your private sale. At the minimum, you will need a purchase agreement and a settlement statement.
Step 7: The Home Inspection (Optional)
When you sell your home in a for-sale-by-owner situation, you can stipulate to buyers that you don’t want to have a home inspection done as part of the sale. If you do accept an offer from a buyer that requests a home inspection, you will need to prepare your home by making it available and accessible to the inspector.
After the home inspection, the buyer can renegotiate with you on home repairs. If serious issues are uncovered in the inspection, the buyer can negotiate the sale price. You’ll need to decide what repairs are worth going through with the deal or if you want to walk away from the sale.
Step 8: Closing
Once it is all said and done, the final step will be the settlement process. You’ll need to work with a title company to ensure that the home has a clear title. The title, deed, homeowner’s association documentation and mortgage documentation are all things you will need as part of the settlement process. Check with your state laws to make sure you meet all of the requirements to properly close on your house.