How to Sell Your House Without a Realtor
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When you decide it's time to sell your home, you want to walk away from the closing table with as much money as possible in your pocket. For that reason alone, some homeowners want to try selling their house without using a realtor.
Selling a home without a realtor is called “for sale by owner” or FSBO (pronounced in the real estate industry as fiz-bow). FSBO is when the homeowner lists, advertises, markets, and shows their home, as well as negotiates with buyers and closes the deal, all on their own. Or when they sell their home to an iBuying company who claims to make instant offers on a home.
Key points from this article:
- For Sale By Owner (FSBO) Benefits – Homeowners can save on agent commissions, typically around 6% of the selling price, by handling the listing, marketing, negotiations, and closing processes themselves.
- Challenges of FSBO – Homeowners may lack the expertise and experience of realtors, leading to potential underpricing or overpricing of the property. FSBO requires significant time and effort in preparing the house, marketing, and handling legal and financial paperwork.
- Alternative Selling Options – Homeowners can consider selling to professional home-buying companies for a quick, cash offer, though typically below market value. iBuyers offer another alternative, providing instant offers based on automated valuation tools.
- Realtor Advantages – Despite the commission cost, realtors bring expertise in market valuation, negotiation, legal compliance, and marketing, often leading to higher sale prices and quicker sales compared to FSBO.
Disclaimer – The information on this page is intended for general informational purposes only and not to provide legal advice.
For Sale By Owner (FSBO)
Thinking of selling your home without a real estate agent? Selling your house by owner to the general public may save on commissions, but can come with some headaches. Learn more below about the pros and cons of FSBO – and what you need to know if you decide to sell your home without using a realtor. We'll also discuss five other options for selling your home later on in this article.
Pros of Selling a House Without a Realtor
The most significant benefit of not using an agent to sell your home is not having to pay their commissions, which is, on average, 6% of the selling price. It's usually split between the agent representing the seller and the agent who represents the buyer.
Depending on the buyer's contract with their agent, the buyer may end up paying their agent's 3% commission, or it may fall on the seller in an FSBO transaction. But either way, the seller will likely get to keep 3% – 6% of the home sale price, which otherwise would've gone to agent commissions.
Another advantage of going the FSBO route is that you are in total control of the home sale process. There'll be no go-between when you deal with buyers or their agents. You also get to choose how to market your home and which offers to consider, without the influence or pressure that comes with having an agent represent you.
Cons of Selling Your Home Without an Agent
FSBO sellers don't have as much experience as a realtor, who has real estate expertise from their studies and practice in the field. It's not likely that your knowledge and skills on how to sell your home for the best price will match those of a professional agent.
Also, selling a home requires a lot of time and patience. You'll need to prep the house to make it desirable to potential buyers. Then you'll need to determine the listing price, do all the marketing, respond to inquiries, set up showings, field offers, negotiate with buyers, and more.
Many FSBO sellers inaccurately determine the value of their home, mainly because they have an emotional attachment that can cloud their perceived value. They'll look at listing prices of comparable homes that are active, meaning homes that are currently on the market but haven't sold yet. However, real estate professionals, including appraisers, will only use recently sold homes as comps in determining a home's value.
According to data from the National Association of Realtors' (NAR) 2023 Profile of Home Buyers and Sellers, FSBO homes sold faster than homes listed by an agent. But that's because FBSO homes are sold to someone the seller knows personally 57% of the time.
The NAR study also found that FSBO homes typically sell for a lower sales price. The median sales price of an FSBO home was $310,000 in 2022, which is almost $95,000 less than the median sales price of $405,000 for home sales using a realtor.
According to research by Zillow, 36% of FSBO sellers believe that selling without an agent will save them time, but the opposite is often the reality. They often spend a significant amount of time on the process because they must handle everything themselves. There are upfront costs involved with listing a home. An agent usually covers these costs and reimburses themselves for them via their commission.
The things that take up a significant amount of time and money include:
- Professional photography displaying your home in the best light, literally, is what will initially attract potential buyers. Poor quality, amateur photos will draw in fewer buyers. That's why using a professional real estate photographer is a smart investment. But it can cost a few hundred dollars – more if you want to include video or a virtual tour of your home.
- Marketing materials are a must for selling a home. You'll need a lawn sign, flyers, brochures, and a budget for online advertising of the house on the MLS and other real estate sites. Marketing and advertising alone will cost a few hundred dollars.
- Home showings and having to schedule and facilitate those showings can take up several hours per week. You'll also need to keep the home impeccably clean during showings. Some people find this difficult to do in light of their schedule and may decide to hire professional cleaners. A cleaning service can cost upwards of $100 depending on the size of your home.
- FSBOs usually have a smaller pool of buyers, because the buyer likely won't want to pay their agent's commission, which is generally 3%. Many contracts between a buyer and their agent state that if the buyer purchases an FSBO home, then the buyer is responsible for covering their agent's commission.
- Real estate sales are all about negotiating. If you're someone who is not comfortable with negotiation, confrontation, or lack the effective skills needed in this area, FBSO may not be the right choice for you.
- There’s complicated paperwork involved, and you must work in compliance with legal requirements, like the Lead Disclosure Rule regarding lead-based paint, and more. Hiring a lawyer to handle the paperwork and legal issues can cost a few thousand dollars.
- According to NAR, 36% of FSBO sellers eventually end up listing their homes with an agent anyway. This fallback to Realtors is because of the significant amount of time that FSBO sellers need to devote to the process. They soon realize that they are better off using a realtor. Unfortunately, that's after they already invested a ton of time and money in trying to sell it on their own.
Sell to a Cash Buyer
Looking for an alternative to sell your house without a Realtor without marketing it as a “For Sale By Owner?” Sellers who need to sell their home quickly can consider selling to a professional home-buying company that will give you a cash offer. Maybe you are going through a divorce, need to relocate for a job, or perhaps you inherited a property that you want to liquidate. When you don't have time to put your home on the traditional market, and do remodeling and repairs, selling it to one of these companies, with names like “We Buy Houses,” “Ugly House Buyer” and others like this, could be a viable option.
The pros of selling to a cash buyer are that it's quick. Some may able to close within a week or so. There are no appraisals or lender approvals, which can delay the process. You can also sell your home in “as-is” condition, so you don't have to worry about any existing damage. You also don't have to create marketing materials, nor do you need photography done.
Some home buying companies also allow leasebacks, where they rent the property back to you for a while. The leaseback would let you have cash in hand from the sale, and give you more time to move and find a new home. And, of course, there are no realtor fees that come out of the seller's pocket from the sale.
The cons of selling to a cash buyer are that their offer will be below market value. The challenge here is determining exactly how much below the value they're offering and how substantial a discount they're getting. If you work with a realtor to list your home on the market, you have a professional to help you determine the value of your home. When dealing directly with a cash buyer, you don't have that benefit.
There are a lot of unscrupulous cash buyers out there, so do your homework. Signs that can indicate trustworthiness are if they're members of the Better Business Bureau, have positive reviews online, and are willing to put down earnest money. Visiting their website can tell you a lot. Their “About Us” page should say who they are and how their business works. It should also list ways to get in direct contact with them by phone and email, not just a general contact form.
Finding no Google results for a company's name can be a sign that you are potentially working with a dishonorable company. An unwillingness to put down significant earnest money, and using scammy search engine tricks are additional red flags. A vague “About” page with no real identifying information on the company and its owners, and a “Contact” page with no identifying contact information – aside from a form – can also be warning signs. Learn more about how to spot cash house buyer scams here.
Sell to an iBuyer
Another way to sell your home is to an iBuyer, who are online real estate investors who make instant offers on homes, without the involvement of real estate agents. Then they resell it on the market for a higher price. Fun fact: the “i” in iBuyer stands for “instant,” and not “internet.”
The pros of selling to an iBuyer are that you don't have to do multiple showings; you only show the house to the iBuyer(s) interested in purchasing the property. If you're not using a realtor to sell your home, no commissions need to be paid. You also don't need professional photography or marketing materials, both of which will save you money.
The cons of selling to an iBuyer are that their offer will be below market value. But the tradeoff is a fast sale, which may be worth the lower sales price for some.
iBuyers use automated tools to determine a home's value, not a licensed appraiser. Without an agent advising you, it can be difficult for you to know the real value of your home and the discount off the sales price – unless you hire an appraiser yourself.
Not all homes qualify to sell to an iBuyer. For instance, one company states they only consider homes built after 1960 with a value between $125,000 – $500,000, and only certain areas qualify too. Selling to an iBuyer is not a solution for distressed homes, as they use an inspector to determine what repairs are needed. These repairs will cost you – either via paying to have the repairs done or by deducting the repair costs from the sales price.
Use a Discount Brokerage
Another option is to use a broker service. With a discount brokerage, you work with an agent to sell your home. But their commission is much lower than typical agents, usually about 1% – 1.5%, instead of the regular 2% – 3% agent commission. These agents accept cheaper commissions because they get more referrals through the brokerage service, without having to market themselves to sellers.
In addition to paying a lower commission rate, other pros include all paperwork being handled for you, exposure on the MLS, and signage and marketing materials being covered.
However, you're hiring an agent to negotiate on your behalf that cannot even sell why they're worth their full commission. Great agents have excellent marketing skills – they are great at selling homes and selling themselves to sellers. An agent who cannot negotiate their value may not be the person you want to negotiate the sales price of your home. You would also have to pay for professional photography, and unless you have a cash buyer, you'll have to deal with appraisals and lender approvals during the selling process.
Hire a Realtor
There's a common misconception that realtors get paid to fill out a few forms, but that is not true. Realtors are licensed professionals. They have to complete and pay for schooling, licensing, continuing education, brokerage fees, association fees, marketing expenses, and cover all the hours they put in.
Agents handle many valuable functions. They list your house on the local MLS, market the home through advertising, brochures, and more, arrange showings and open houses, act as an intermediary with negotiations between the buyer and seller, and accompany you at the closing. Agents don't get paid their commission until they close the deal.
The standard 6% commission is split between the listing agent and the buyer agent equally. Out of the listing agent's 3% cut, they have to pay their broker and Uncle Sam. What's leftover has to cover business expenses, including marketing and advertising your home, as well as their time.
There are many benefits to working with an agent, the top one being that you have the best chance at getting market value or above market value offers from buyers. Using an agent will get you the highest sales price than any other method of selling your home. According to NAR, you will sell your home almost three weeks sooner than if you did FSBO.
The additional value that a realtor brings to the table is that they handle all the complicated paperwork, and do so in compliance with legal requirements. For example, they'll prepare the Seller Disclosure Form, which is a required document provided by the seller to the buyer that outlines known issues with the home and other historical details.
The realtor facilitates all showings, pays for all marketing materials, professional photography (homes with high-quality photos sell 32 percent faster), and serves as a buffer between you and the buyer in negotiations and confrontations.
Also, buyers who use an agent are typically better qualified to buy, than those who don't use an agent.
The most significant disadvantage of using a realtor is paying their commission. You'll also have to prepare for more showings of your home. Showings often mean cleaning, being out of the house, and making arrangements for your pets. These are all hassles, especially if there are multiple showings per week until it sells. And again, unless you have a cash buyer, you'll have to deal with appraisals and lender approvals, which can delay the process.
When choosing an agent to sell your home, you should meet with and interview multiple ones. Don't just go with one because a friend recommended them. You must do your due diligence to spot the good ones from bad ones and avoid working with a realtor that ends up disappointing you. (If you're in the greater Houston area, we recommend you add Roots & Wings Realty Group to the list of agents to interview. They're top-notch Realtors in the Katy & Houston area.)
Signs of a great agent are they maintain a professional presence online and off. They focus on real estate full-time, have good reviews, and communicate how they plan to market your home. If they have additional training and designations, such as being a certified pricing strategy advisor or ePro, those are also positives.
Things to watch out for when interviewing agents include real estate only being a part-time gig, no professional photography, not communicating their marketing plan, and poor reviews. These are all signals that you may be working with the wrong agent.
Always search the agent's license history on TREC (Texas Real Estate Commission) to find out if there have been any disciplinary actions taken against them. Also, look at their prior listings on your local MLS to see how those homes were marketed. Did those listings have professional photos and compelling home descriptions? Also, ask for references from their past clients.
Whichever method you choose when selling your home, there's a tradeoff for each one. FSBO will save you from having to pay realtor commissions, but it can result in a lower sale price and cost you a ton of time. Cash house buyers like AMI will typically close the quickest and with the least hassle, but it will almost always be at a discount of the market value. Now that you know the pros and cons of each, you can confidently choose the option that best suits your needs.