When getting ready to sell your home there are a lot of choices to make. When to list and sell, where you want to move, and how much money you’d like to make from the sale. Before you decide to move forward, make sure you have a good understanding of the process and the amount of work involved. Let’s take a look at your three main options to sell a house without a realtor, and the pros and cons of each option.
3 Ways to Sell A House Without a Realtor: Pros and Cons
There are three main options when selling a house without a realtor:
- Sell to a cash buyer
- Hire a real estate attorney to facilitate a sale to a known buyer
- Handle the sale independently via For Sale By Owner
There are pros and cons of each option which you must be aware of should you decide to sell your house without a realtor.
Option 1: Sell your house to a cash buyer without a realtor
If you need a quick sale, you should consider selling your house for cash. Cash buyers are individuals or entities that purchase your home outright, with no need for lender financing. Cash buyers offer convenience and a fast sale, however, those benefits will more than likely come at the cost of higher transaction fees and a lower net profit.
Pros of selling to a cash buyer:
You avoid showings and could avoid home inspection delays as well
When making a cash sale, nobody will turn up for a showing at a moment’s notice. You can save time and avoid having to disappear when guests may be present.
Home inspection is another part of the process that’s known to cause delays, but if you sell your home as-is to a cash buyer, home inspection and repairs may not be required. Some cash buyers may waive a home inspection completely.
No need for a home makeover
When you sell your home for cash, there’s no need to worry about whether you should repair your home or sell it as-is. Since the purchase already is “as-is”, there’s no need to repaint, redecorate or get any estimates from contractors. Forget about improving your home’s aesthetic value for marketability or to attract buyers – it’s not necessary!
Cons of selling to a cash buyer:
The sale price may be lower than desired
Unfortunately, convenience often comes with a cost. Cash buyers will capitalize on a seller’s desire for convenience to get a lower purchase price. Many cash buyers could be described as flippers, and they don’t expect to pay the full market price.
A quick sale also means that your home will not spark a bidding war amongst buyers. Cash buyers are likely only interested in purchasing your home if the price is a good deal to them.
With all of that said, it’s important to consider how much you save selling as-is. Without the need for costly repairs or a long time sitting on the market, the slight reduction in upfront gains might be well worth it for a simple, fast move-on timeline.
Option 2: Sell your house to someone you know, with legal support from a real estate attorney
If you’re lucky enough to have someone waiting to purchase your home, you could absolutely move toward selling without a realtor. However, hiring a real estate attorney to help close the sale is imperative.
Even if you know the person waiting to buy your home, it’s best to involve a professional in the process of the sale. Attorneys who specialize in real estate transactions will help draft and interpret the closing paperwork, as well as all of the contracts and legal documents.
In most home sale transactions, if you are selling to someone who is using financing (a home loan) to purchase the property, a real estate attorney is required. This option is essentially the closest you can get to “for sale by owner”, while still selling to someone with financing.
Pros of working with a real estate attorney to sell to a buyer with financing:
A real estate attorney has the ability to create a great contract and resolve disputes – and you can still save money by selling without a realtor.
Your attorney can draw up the perfect contract, and will set exact details of the sale price and closing dates as required by your state and local legislation’s legal requirements.
If problems arise, having an attorney present could be valuable to squashing any issues quickly. Common disputes can include a failure to share property defects and moving date disagreements. Though real estate attorneys aren’t cheap, it does save people money when compared to the price of working with a real estate agent.
Cons of working with a real estate attorney:
An attorney won’t get you the best deal possible on your home sale
An attorney will certainly help you avoid legal issues, but that’s where their expertise ends. They can’t help you negotiate price or terms with the buyer, or ensure you get a fair market value for your home.
Option 3. List your home as For Sale By Owner (FSBO) on the market
Sellers are often drawn to this option because they want to cut back on commission costs for an agent and be in control of the entire process. However, that control does bring added responsibility. You’ll be in charge of advertising the listing, pricing it appropriately, and hosting walk-throughs and open houses as necessary.
Pros of listing as For Sale By Owner:
You save on real estate agent commission fees
If you decide to sell your home yourself, you keep the 3% commission fee that normally goes to the listing agent. However, you will likely still need to cover your buyer’s agent commission fees, typically 3% of the home sale, so be wary of that.
For Sale By Owner homes can sell faster
It’s pretty self-explanatory, but FSBO homes sell much faster than homes that are for sale on the open market. Statistically, these sales close quickly because the sellers often sold to individuals they already knew.
Cons of listing as For Sale By Owner:
Statistically, it’s likely that your house will sell for less than if you hired a realtor.
Real estate agents sell homes for 6% more than independent sellers do. More often than not, an agent will out-negotiate an independent seller, simply because the seller makes too many mistakes. These mistakes include setting prices too low or too high, forgetting to include simple things like who will pay for property taxes in the contract, or accepting an offer without an appraisal guarantee in a seller’s market. The worst-case scenario is that an independent seller over-negotiates and the buyer is so put off that they leave the deal.
What’s more, because FSBO homes don’t contribute to the real estate industry significantly, FSBO homes often take second place on popular home listing sites like Zillow. FSBO homes usually show up below realtor-represented homes, just because sites like Zillow make their money from realtors and real estate companies that pay to show up. That means your home is likely to sit on the market for longer, which can bring down your final price.
You’re in charge of everything – marketing, negotiation, etc.
If you plan to act as your own agent, it will be time-consuming. You must stay on top of the marketing of your home with social media posts, flyers, and open houses. You also must be available days, nights, and weekends in order to respond to inquiries in a prompt manner. Failure to get back to a customer on time could force you to lose a deal. Selling independently forces you to examine your strengths as a salesperson and negotiator, and staying calm and level-headed is imperative.
Your personal and financial safety could potentially be in danger
If you do decide to sell independently, you’re inviting the opportunity for strangers to enter your home. Without an agent, these visitors don’t have to undergo a background check, and there’s no way of knowing their true intentions.
Sellers should also be aware of potential wire fraud and online phishing scams. Wire fraud occurs when sellers receive an email from a title company that seems like the real deal upon first glance, but contains fake wiring instructions that send the money to a scammer’s account. Once the money’s gone, it’s typically unable to be retrieved.
Decided How to Sell Your Home Without a Realtor? Here Are a Few Tips to Get You Started
If you’re looking to keep as much money as possible, and quickly, selling your home without a realtor may be the right option for you, whether you choose to sell for cash, with a real estate attorney, or as a more traditional for sale by owner listing. Here are a few tips to help you get it done right:
Set a Reasonable Price
A common mistake homeowners make when listing their own homes is setting the price too high. Sentiment tends to get in the way of business sense when looking to sell fast. Research similar homes in your neighborhood to see what their selling prices are, and price your own home accordingly. The better the price, the faster the sale. Don’t set the price too low, but set it sensibly.
Take Good Photos
Once the price is set, snap the best photos you can of your home in natural light. Get photos of important rooms, such as the kitchen, bathrooms, living area, and master bedroom. Try to make your home look as welcoming as possible, so be smart with the photos you choose to display!
Advertise Your Home
Once you pick your best photos, post them on housing retail sites such as Zillow and Trulia. Those sites are the most popular, so the more information about your home, the better. Don’t forget to put up a For Sale sign in your lawn – some local advertising can come in handy!
Be Honest About The Home Condition
As people begin to look into purchasing your home, they’ll inevitably ask questions about the condition of the home. Be honest with potential buyers in every open house or meeting. You want to present your home in the best light, but lying about the condition is an absolute no-no, even if it may affect the price.
If you follow these few tips, you’ll be well on your way to selling a home without a realtor, and hopefully quickly! It’s not always easy to list a home by yourself, but with a little extra time and effort, it certainly can be done.
When it comes to selling a home without a realtor, there’s much to consider. If you’re looking to get out from under a home sooner rather than later, Renewed Homes is second to none. We’re a trusted, local real estate investor that doesn’t use realtors or complete inspections — but we will offer cash for your home. We’ll help you make a quick, rewarding sale without any of the stress of finding a realtor. Contact us to learn more about our buying process.
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