Selling your home without an agent may sound empowering at first. It certainly may save you money on agent fees and commissions. However, the truth is that selling your home yourself can be very complicated. There is a lot that goes into the process that a typical homeowner wouldn’t know.
The simple truth is that as an FSBO (For Sale by Owner) individual, you don’t always know exactly what is involved when trying to sell your home. There is a lot of paperwork involved – some which you might not even understand.
That doesn’t mean you can’t do it. The National Association of REALTORS show that it is possible. It is less convenient than the alternative. The following numbers are for 2017:
- About 8% of all homes sold in the 2016 year were through FSBO.
- These homes typically sold for about $190,000.
- The most effective FSBO methods included yard signs (35%), classified ads (11%), friends and relatives (24%).
The numbers show some of the difficulties that FSBO sellers faced:
● 15% said they had issues with deciding on the right price.
● 12% said they had issues understanding the necessary paperwork.
● 3% said they had difficulty finding the time to deal with the sales process.
Don’t be discouraged though. A huge percentage of those who put up their homes for sale actually succeeded in selling the home. The process was more tedious than they initially thought it would be. So, if you are still asking yourself, “can I sell my home myself?” The answer is yes, you can, but it will take some work.
Why You Might Want to Sell Your Home Yourself
One reason people choose to sell their homes themselves is because of the savings. If you sell your home yourself, you will save money that would have gone towards paying the real estate agent’s commission.
On average, the typical real estate agent commission is 6% of the sale price. This means if you sold your home for $400,000, you would have to pay your real estate agent $24,000.
The $24,000 commission payment comes out of your home equity. If you had a mortgage of $250,000, that would make your net equity $150,000. That $150,000 is where the $24,000 would come from at the end of the sale. You end up with $126,000 after making the sale because of what you pay your realtor.
You also need to consider the fact that closing costs go with selling a house. These can vary and be expensive. When it is all said and done, an owner may end up making less than they thought they would on the sale.
That is why you find homeowners who want to sell their houses themselves – it can save quite a bit of money.
3 Things You Need to Know Before You Sell Your Home Yourself
As you probably already know, there is more to selling your own home than just putting a “For Sale” sign on your front lawn. It also includes the following:
- Placing a “For Sale” advertisement on real estate websites
- Staging your home for open houses
- Making time to meet the potential buyers
Aside from that, there are other things that you have to do once you put your home up for sale. Let’s take a look at some of the other steps involved in selling your home:
Determining the Right Market Value for Your Home
It is absolutely important to determine the fair market price for your home. You need to remember that the sentimental value you place on the house won’t be reflected in its actual market value. If you price it too low, then you may end up walking away with less than you should have in the first place. If you price it too high, there’s a chance it will take longer to sell, or not sell at all.
You have to price it just right. Allow yourself some wiggle room because people will likely try to negotiate a lower price. There are three ways that you can determine the value of your home:
- Use real estate valuation websites: you can check sites such as Zillow or Trulia for a quick valuation of your property.
- Hire an appraiser: this is the most effective way to get an accurate estimation of your property’s value.
- Compare other homes in your area: what have other homes in your neighborhood sold for? Make sure that these homes are comparable to the one that you are selling. You’ll want to look at square footage, for example.
The Remember that hiring an appraiser will still cost you money –around $300 to $500 for a report. Even then, mortgage companies won’t always accept it.
Get Ready to Work Hard
You need to know that this process can be time-consuming. You have to prepare the home for the sale by making necessary repairs or improvements. You also need to create advertisements and field calls from potential buyers. You’re also responsible for finding appraisal companies and lawyers for the sale.
All of these essential tasks will take time and a fair amount of legwork. Because you likely also have other obligations, like a full-time job or a family, selling your home can get a little frustrating.
You Won’t Do It All by Yourself
Although you are selling your home yourself, you are not the only person working on it. Many states require a real estate lawyer or title agent get involved in sales. This means that you have to find someone to help you with the sale. Once you do all this, you can close the sale. Hopefully, you make money on it.
Yes, selling your own house is entirely possible. Some people may even think it’s fun. It does, however, involve a great deal of work. Make sure to handle the entire process carefully because it is a large financial and legal transaction.