Selling Your Home By Owner Without a Realtor
Are you interested in selling your house without a Realtor? If you are one of the rare few who have the time and energy required to sell your home, you will undoubtedly want to do your homework before you begin trying to sell by owner.
Figuring out how to sell a house without a Realtor is not easy.
National statistics show that over 85% of all homeowners end up listing with a real estate agent after attempting to sell as a for sale by owner or FSBO for short.
In other words, most for sale by owners fail in their quest to sell without the assistance of a Realtor.
Failure is not all that surprising given that many things go towards the sale of a home – hence why real estate agents often work long hours and weekends. Even selling a single home can involve numerous hours of preparation and much legwork to manage successfully.
Understanding time constraints is essential when planning to sell as a FSBO. It would help if you were prepared to invest significant time and effort in your sale.
Will You Save a Commission When You Sell a House Without a Realtor?
The biggest motivation for most homeowners trying to sell by owner is money. Some sellers, unfortunately, do not have the finances to pay a Realtor’s commission, which can amount to thousands of dollars.
The commission in most of the U.S. can range from 4-7% of the home’s sale price. Quite a bit of money if you are strapped for cash.
For those folks who need to save money, trying to become part of the twenty percent who are successful in selling their homes, as a for sale by owner is worth it.
Some FSBOs have had a bad experience with an agent and have decided to see if they can do it themselves.
Given that so many for sale by owners fail in their attempt to sell without an agent, I have offered some tips on selling a home for sale by owner.
It would be best to consider the following things when selling a house without a real estate agent. These are the steps for selling a home without a Realtor’s assistance.
Prepare The Home For Sale
One of the most important considerations for selling a home without a Realtor’s assistance is preparing it for the market. You want buyers to love your home. While the things you can do not guarantee this will happen, you can certainly help the situation along.
Take a hard look at your home for any significant issues you have the time and money to fix. These things must be handled before you put the house on the market. Sometimes the little things you do before putting your home up for sale can make all the difference in the world.
They are all part of staging a home for sale.
These issues can include pet damage, carpet stains, odors, and damage to the yard. Before putting the for sale sign out is also the time to tackle any cheap improvements that may add value, including kitchen and bathroom improvements, new carpet, replaced appliances, landscaping, and anything else that needs addressing.
Once the repairs and remodeling are finished, clean the house from top to bottom and keep it that way as much as possible while the home is up for sale.
There is no question that a significant percentage of buyers today want a turnkey property. With the hustle and bustle that we all deal with in our lives, the last thing many customers want to think about is coming into a home and making many improvements.
The more you can minimize the buyer’s list of things to do, the better off you will be.
Get Help Pricing Your Home
Not pricing a home correctly is by far the number one reason why for sale by owners fail in their quest to sell on their own. Overpricing any home is the top reason it doesn’t sell. Often a FSBO will not take the time even to consult with a Realtor.
Without the proper house pricing, you will fail miserably.
Not consulting with an expert is a mistake. Many real estate agents in the business for a while should have the expertise to nail down accurate home values.
On many occasions, a for-sale by owner will use Zillow and their Zestimate pricing tool, thinking this is an excellent way to help price their home.
Most homeowners don’t realize how far off the mark the value estimates from an online valuation service can be when determining real market value.
If they have not met with a local real estate agent, it is easy to understand why a FSBO would assume their value could be close to the estimate.
The pricing mistake is further exacerbated when the online value is close to what the seller wants for their home. It is validation that what someone wants for their home must be right.
Here is the kicker that most for sale by owners don’t realize – as a thirty-seven-year veteran of the real estate industry, I have seen online estimates of home value be off by over $100,000, either too high or too low. Yes, that is not a misprint of $100,000!
While occasionally, these services get in the ballpark on value, the vast majority of the time, they do not. What you need to understand as a for sale by owner is that if you are off by even $25,000 on the right price for your home, it probably will not sell!
Personal Attachment Makes Home Pricing Less Accurate
Another obstacle in pricing a home accurately is personal attachment. It is far too easy for owners to see what they love about their house – including the memories and events – and price the property higher than they should.
Incorrect pricing happens more often when the owner does the selling because there is no second voice to speak reason. You need to examine the comparable sales – what other similar houses in your area are selling for and what homes are under contract.
Homes you will compete against are essential but not nearly as much as what’s sold. You never want to price your home on what the neighbor thinks their home is worth. A sold house is concrete data that tells us what a buyer will pay for a similar home.
One of the values of having a Realtor is the comparative market analysis they will provide. The CMA will validate the correct list price and probable sales price.
If you are not comfortable speaking to a real estate agent, then have an appraiser come in and look over the home. Appraisers are just as qualified to give you an accurate picture of your home’s value.
Use this information to price your home according to its worth and, perhaps more importantly, what the market will bear. If similar homes in your area are selling for $400,000, pricing your home at $450,000 will likely prevent most buyers from even considering it.
Valuing a home is one of the most challenging jobs of a Realtor. They must be truthful to homeowners who love their properties because it’s the only way the house will sell.
The #1 reason for sale by owners fail is being overpriced!Click To TweetGet a Home Inspection
While not all homeowners get what is referred to as a pre-sale home inspection when selling for sale by owner without a Realtor, it makes sense to do so.
Remember that one of the many roles of a real estate agent is to represent your best interests when selling a home.
Representation includes negotiating what turns up at the home inspection. Many sales are either salvaged or lost due to the expertise in dealing with the buyer and their agent after the home inspection. As a for sale by owner, you are not afforded this luxury!
By having a home inspection professional examine your property before the sale takes place, you can remedy any issues that could stop a deal.
You may be surprised by what the inspector tells you. There may be issues with certain parts of the home that you were in the dark about.
Don’t lose heart. Most of these things can be fixed, and the ones that can’t often be compensated for in the sale price. Just don’t ignore the inspection results. Fix what needs fixing before trying to sell.
You may not know that many home sales fall apart at home inspections. A disastrous home inspection is one of the biggest roadblocks to selling a home. Getting all your problems squared away before you put your for sale by owner sign out at the curb will be vital.
List Your Home’s Strong Points
Most every property has some quality that is worth emphasizing to buyers. This is another area where many real estate agents excel. They know how to look at a property and see its strong suits. Now it is time for you to do the same.
Your school district, neighborhood, nearby stores or restaurants, open spaces, the new carpeting you put in – write down everything you can think of that would make someone want your home. When talking to prospective buyers, you’ll want to know these things by heart.
One of the services that some of the better real estate agents will provide is found in their marketing materials. A great Realtor will spend money on their marketing, including brochures that say WOW! You can tell when a real estate agent has put the time and effort into their print marketing.
Their photography is exceptional and captures the essence of your home. Many agents also possess excellent writing skills and very verbose property descriptions that capture buyers’ imagination.
Realtors that are head and shoulders above others will also employ creative real estate marketing displayed along with brochures that add value to what a buyer could think about when purchasing a home.
Consider Your Timing Before Selling
Many real estate agents are asked if it is a good time to sell a house.
Every market is a little different, but some things are pretty consistent. People like to buy homes in warmer weather. If you are planning on selling in January, keep in mind that it might be harder to get people looking at your house if you are in a colder weather climate.
The best time to sell a home is typically Spring. If you look at a calendar, most sales nationally occur in April, May, and June. If timing is not an issue, you may consider selling your home just before the Spring season hits, especially if inventory is low.
Also, you will always be at the mercy of the current market. If your neighborhood is filled with foreclosure sales, you should expect it also to affect your sale.
Get The Word Out When You Don’t Have a Realtor
Marketing a home correctly involves much more than putting a sign up in the yard. You need to advertise the sale in multiple places and, most importantly, let everyone know you are selling. This is one of the most challenging tasks when selling without a Realtor.
You are not a real estate agent, so you do not have an established network of contacts to spread the news.
Without taking advantage of a Realtor’s network, you will need to talk to any groups you are a part of, put it up on social media, and mention it any way you can. You never know where the buyer will come from.
The most significant advantage that a Realtor has in selling homes is what is referred to as the multiple listing service, or MLS for short.
When a real estate agent lists a home for sale, the whole world knows about it, and I am not kidding! The Internet has changed real estate sales. With over 90 percent of all buyers finding their home online, this is a tremendous value-added service that a Realtor provides.
The MLS is a powerful tool that disseminates real estate data to buyers and sellers.
When selling without a Realtor, you cannot see your home on the most popular home-buying websites, such as Realtor.com, RE/MAX.com, etc.
Show The Home Without a Realtor
One of the most challenging aspects of selling as a for sale by owner is meeting the scheduling demands of a buyer. Again this is another value-added service that a Realtor provides. When the calls start coming in, you must set aside time to show the home to as many prospects as possible.
I have heard from numerous buyers over the years how challenging scheduling showings can be with for sale by owner properties. If you are a FSBO, every viewing you miss is a lost opportunity.
You must ensure you can accommodate the buyer’s schedule, NOT yours!
The fa,ct that the home should be clean has already been stated, but it is worth saying again. Make the home appealing. Set a good atmosphere that keeps people relaxed and happy while they are in the home. These good feelings can make a difference.
Also, avoid any negative talk. Please don’t lie about the home’s flaws, but don’t focus on them. You could end up in court if you get sued by a buyer for misrepresentation.
Financing and Closing
Making sure a buyer is qualified is a critical aspect of successfully selling a house for sale by owner! Another role that a real estate agent plays in the home sale process when representing a seller is ensuring the buyer is qualified to buy the home.
One of the requirements of almost every real estate agent is to receive a pre-approval letter from a purchaser accompanying their offer. The pre-approval gives a seller peace of mind that the buyer will get financing.
Not all buyers will be prepared and have done what they need to to buy a house. In the case of a for sale by owner, you must take on this responsibility yourself.
As such, you need to make damn sure the buyer can afford to buy your home. Qualifying a buyer is even more critical if you have purchased another property.
One tip is to ensure the buyer is pre-approved for a mortgage. There is a fairly decent chance that you will be presented with a pre-qualification letter instead.
A pre-qualification letter is not worth the paper it is written on in determining whether the buyer will get the loan. The difference between pre-approval and pre-qualification is vast. Proper qualifications can not be emphasized enough.
If the buyer comes unprepared without a pre-approval letter, it would be beneficial for you to have a mortgage broker in place so that you can refer to verify their finances.
Less Conventional Ways to Sell a House Without a Realtor
There are other methods to selling without a Realtor besides throwing a sign in your yard and posting it on Facebook. You can sell to a real estate investor if you need a quick sale.
If you want to sell a house as-is for cash, an investor can do it. Many investors will buy homes for cash with warts and problems.
The upside of selling to an investor, such as We Buy Ugly Houses, is you can close quickly without a home inspection. You don’t have to worry about the buyer getting financing in this situation, nor do you have to go through all the showings. It’s quick and easy.
The downside is you will sell your house for pennies on the dollar. Expect to sell your home between 30-50 percent under the market value.
Sell to an iBuyer Company
If your home is in excellent condition, you could sell to an ibuyer. Ibuyers are the antithesis of traditional flippers who buy fixer-upper homes. They want turnkey properties.
The only real upside is that you can close fast. iBuyers typically will charge you a fee like a real estate agent.
Thoughts on Why For Sale By Owners Fail Without an Agent
Besides the obvious reasons like the wrong price, lack of marketing, and difficulty in showings mentioned above, there is another reason you see some for sale by owners not succeeding.
It boils down to the fact that the buyer knows you are saving a ton of dough not paying a real estate agent, and they want to share in part of your commission savings.
Quite a few potential buyers who will view for sale by owner homes are bargain hunters. The customer’s perspective goes something like this – since the seller is not paying a real estate commission, they should be able to offer less for the home.
Lots of sellers end up getting lowball offers.
Buyers will often take 5-6% right off the top regardless of whether the home is priced where it should be. I have personally seen numerous Massachusetts for-sale by owners learn this the hard way.
Even Owners Of For Sale By Owner Sites Ended Up Using Realtors
Want to know something ironic? The owners of two of the most prominent real estate for sale by owner sites used real estate agents to sell their homes. Forsalebyowner.com creator Colby Sambrotto paid a 6 percent commission to sell his Condo in New York, and Buyowner.com founder Al Bennati recently listed his Florida home for sale with a real estate agent.
One big takeaway is that these sites don’t do diddly squat for selling homes compared to the resources a Realtor can offer. Even these for sale by owner company executives understand that.
Pros and Cons of Selling a House Without a Realtor
Let’s recap the pros and cons of selling a house without a Realtor.
Pros
- Potential to save a commission
- You have complete control over the process
Cons
- Lack of advice
- No fiduciary in your corner
- You need to hire a professional photographer or have less appealing photos
- Pricing is often wrong
- Marketing is not nearly as good
- For sale by owner websites are not effective
- You have to show the house yourself
- You’ll need to ensure the buyer is qualified
Final Thoughts on Selling a House Without a Realtor
Selling a property without a Realtor usually ends in one of two ways – a complete lack of success or netting less than if a Realtor was hired.
Unless you have a complete aversion towards real estate agents, you are always better off with the exposure a Realtor will provide.
Finding yourself in a bidding war is nearly impossible when you forgo using a Realtor.
Additional Home Selling Resources
- The best house-selling tips by Maximum Real Estate Exposure
While selling a home by owner is not easy, it can be done. If you follow the above for sale by owner selling tips, there is a relatively decent chance you will have home sale success and be sitting at a closing table with a smile.
Best of luck. If you need the services of a top-notch Realtor, I will welcome the opportunity to interview for my services.
Bill Gassett, a nationally recognized leader in his field, provided the above Real Estate information on how to sell a house without a Realtor. He can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 37+ Years.
Are you thinking of selling your home? I am passionate about Real Estate and love to share my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
