Should I Sell My Home by Owner?
When it’s time to sell a home, property owners have a few options on how to proceed. While most decide to list with a real estate agency, around 10% of home sellers decide to sell it “by owner,” or without the assistance of a real estate agent. Ultimately, the decision to sell your home by owner (FSBO) is a personal one and should be based on your unique needs.
What does it mean to sell a house for sale by owner?
To sell a house by owner means that you sell your house entirely on your own- from getting it ready for sale, marketing, showing the house, to finalizing the sale at the closing table. You represent yourself in the real estate transaction and must take full ownership of the selling process.
Some sites like Zillow and Trulia allow you to list your FSBO home for free, which gives you considerable reach. However, to market your home for maximum exposure, you should expect to pay some fees to the Multiple Listing Service (MLS). This gets your listing on all the relevant home listing sites as well as the MLS which real estate agents consult frequently.
How do you sell a house by owner?
To sell a house by owner, you need to prep your home for sale, market it, show it, speak with the other agents representing buyers, draft the sales contract (preferably with legal help), and represent yourself at the closing table (unless you are legally required to have a real estate attorney with you. Check your state’s regulations to see if it’s necessary).
As you can see, this is a lot of work. To reduce the time you need to spend on selling your home by owner, you can use a discount broker. Instead of taking the typical 3%, this person takes 1% to handle some of the tasks of a full-service agent, such as listing your home on the MLS, scheduling showings, and taking professional photos.
There are many ways to sell your home by owner with greater success rates. This will directly affect how long it takes to sell your home. Zillow has already written a fantastic blog about the entire process, breaking down all your choices. Check it out if you’re interested in pursuing this path!
Why do people choose to sell a house by owner?
Most people choose to sell a house by owner to save on real estate agent commission fees and to have total control over the selling process. Some prefer to sell their home their way, taking things slower than a listing agent would, or limiting showings due to privacy concerns. Others may want to pocket the money they would pay a realtor so that they can meet their financial goals.
Is it worth it to sell a house by owner?
According to the majority of real estate experts, it is typically not worth it to sell a house by owner. It takes a lot of time and costs money to do it correctly. So, even if you don’t pay a listing agent commission, you end up paying MLS fees, hiring a professional photographer, hiring a discount broker and real estate lawyer, or may need to take time off work to renovate, etc. This doesn’t mean that there aren’t instances when it does work in the seller’s favor. In high-demand markets (like the intense seller’s market of late 2021-early 2022), FSBO is not as much of a financial risk.
But in general, selling a house without representation often leads to a lower average sale price. Specifically, the National Association of Realtors 2022 Profile of Home Buyers and Sellers reports that the typical FSBO home sells over $100,000 less than the average home sold by a real estate agent.
If you work a full-time job, then you should expect to be pulled in different directions for a season. Selling your own home correctly means that you will work the equivalent of two jobs as you sell your home yourself. showing times, open houses, finding comps to set a good asking price, handling negotiations post-home inspection during due diligence, home staging, fixing curb appeal, marketing on social media, and much more.
Overall, it’s up to the individual to decide if they want to pick this route, which offers the owner full control of showings and other elements of the home sale.
What mistakes can happen when selling a home by owner?
Selling a house by owner also can lead to costly mistakes, such as pricing your home incorrectly or not marketing it properly, leading to it sitting on the market for a long time. Homes that sit on the market often require price reductions to sell. On the other hand, a real estate agent knows how to run a comparative market analysis to price your home correctly.
FSBO sellers may also make mistakes on sales contracts like having incomplete or incorrect sections that can give buyers “outs” or get them into legal trouble. They may also unknowingly break Fair Housing Laws in listing descriptions, using language that discriminates against potential buyers.
When you sell a home by owner, you must also be the person making home sale negotiations with the buyer’s agent. It will be up to you to handle negotiations regarding repairs and whether you agree to pay for closing costs in seller concessions.
As you can see, there are quite a few risks that make it absolutely imperative that the homeowner has a solid foundation in real estate law, marketing expertise, and financial sense. If you can do all these things, then FSBO can be worth it. If you can’t, then you can have a much better experience working with a licensed real estate agent.
Should You Sell Your Home by Owner?
You should sell your home by owner if you are fully prepared to handle all the typical duties of a seller’s agent. As you save on real estate commission, you must prep your home, set a listing price, market and promote your home, show it to buyers, and navigate contract negotiations according to the housing market. You must also have a solid understanding of real estate law as you draft and fill out the sales contract, understand how lending works for buyers that use financing, and much more.
So, whenever you are in doubt, speak with a real estate agent from Marketplace Homes!
Alicia Persson is the real estate content writer for Marketplace Homes. She has several years of experience working in real estate teams that specialized in investments and property management. Before she joined MH, she was a freelance writer for 7 years, providing real estate and home living content for boutique digital marketing agencies.
She is a proud University of Virginia master’s graduate and enjoyed her undergraduate years at the University of Mary Washington. When she is not writing, she plays keytar and does female lead vocals in a local 90’s band or spends time with her amazing family.