Realtors don’t sell houses out of the kindness of their hearts. They work on commission – and every penny in their pocket is pinched out of yours.
Nationwide, average realtor commissions amount to 5-6% of the value of a sale. On a sale valued at $500,000, that works out to $25,000 paid to buying and selling agents. That’s enough to do some serious renovation on your new home.
Many homeowners are reluctant to consider going it alone and selling their homes on their own. But as long as you’re up to speed, you don’t need to worry about how to sell a house without a realtor.
This article will teach you everything you need to know.
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Can you save money by selling without a realtor?
Realtor fees are expensive, but many think that they’re worth it. After all, can you sell a house without a realtor?
It’s common for experts to recommend working with an agent. Agents handle the entire process of marketing your house and selling it. They take sizable commissions for their efforts.
Ultimately, you’re paying for simplicity.
But that’s also the catch. Agent commission fees might make your life easier, but they’ll eat into your profits. In general, the seller pays their own agent’s commission as well as that of the buyer’s agent – so sellers are paying double.
When selling For Sale By Owner (FSBO), you may still have to cover the buyer’s agency fees – but we’ll cover that in a moment.
The three ways to sell without a realtor
If you’re asking yourself, “how do I sell my house without a realtor?” and coming up empty, here it is in a nutshell. You can sell your home in one of three ways:
- Directly to buyers via their agents (FSBO)
- To home flippers for a hefty price cut
- To digital iBuyers for a modern approach
To put things in perspective, around 86% of homeowners sell via an agent. That’s because of the increased convenience of using an agent, coupled with the established trade of real estate companies. They’re trustworthy and time-tested – and many people don’t know any better.
1. For Sale By Owner
FSBO is the most popular route when you sell your home without a realtor. Many people think of it as “cutting out the middleman”. FSBO is an attractive option for savvy homeowners who are willing to go the extra mile and do everything they can to sell their homes for the highest price possible.
There are downsides to the FSBO process (below), but overall it’s a tried and true method for selling without a realtor and bypassing agency fees.
2. Home flippers
Home flippers are the stock market traders of the real estate sector. Home flippers make fast cash purchase offers with a streamlined buying process. Most of the time, home flippers are real estate investment companies that buy houses in various states of disrepair.
They make any necessary repairs and use their real estate network to “flip” the house for a profit. Home flippers factor their profit margin into their purchase offers, meaning they put in offers that vastly undervalue the true cost of your home.
A newer trend in the real estate scene is the iBuyer (instant buyer) process.
On the surface, iBuyers look very similar to home flippers. They make fast cash offers to buy homes and deals close in a similar timeframe. Similarly, there are no open houses or stagings to worry about.
The difference is that iBuyers aren’t looking to make lowball offers for “fixer uppers”, renovate, and then flip a home for instant profit. Instead, iBuyers are looking for houses that they can buy and sell quickly.
Overall, iBuyers are most attractive for homeowners looking to sell quickly without an agent and without any of the hassle, stress, or immense time investment that FSBO routes typically require.
Benefits of selling without a realtor
When you boil it down, selling your home without a realtor is about two things: Control and finances. Having control over your own affairs is both liberating and empowering, and saving money is a crucial factor to many sellers.
You save costs
Let’s face it: That 6% agency commission is a lot of money in today’s market. Selling directly saves you money, and if you’re an FSBO seller with the guile to estimate your home’s value correctly and land a deal, you stand to pocket that agent’s commission for yourself.
You control the timeline
If you sell your home without a realtor, you control the process from start to finish and set the timeline. In a survey, the National Association of Realtors (NAR) found that nearly 80% of FSBO sales take two weeks or less.
That may sound fast, but it’s in large part because the buyer and seller already knew each other. Nonetheless, having control over when your house is open for showings and when the contracts are signed is appealing to many homeowners – particularly if they continue to live in their homes until they sell.
You sell regardless of the condition
If you opt to use a home flipper to sell your house, you’ll be able to sell regardless of the home’s condition. Flippers come with little risk on your end, you won’t need to negotiate offers or manage open houses, and most deals can be closed in under two weeks.
However, as we’ll show later on, selling via a home flipper can tank the selling price and cut into your own profits enormously. Usually, home flippers aren’t worth the price of admission unless you need to sell your home fast without making repairs.
Downsides of selling without a realtor
Selling your house on your own lets you do things your way. The burning question is whether it’s actually worth it – and there are downsides to consider.
What’s crucial is to ask yourself whether you have the necessary skills to navigate the FSBO process. Above all, you need to think of your house as an asset – and yourself as a salesperson. Emotional attachment and fond memories have no part to play in landing a successful sale.
You’ll need to be able to market your house effectively and have the senses to distinguish between genuine buyers and shady parties. You’ll also have no choice but to deal with complicated legal paperwork.
FSBO sales can yield lower prices
The primary reason people cite when selling without an agent is to save money on the agent’s commission fees. On paper, at least, a 6% commission fee sounds like a lot.
But that’s missing one core detail: Real estate agents are seasoned veterans and they know how to close a good deal. When all is said and done, you’ll only save money if you’re confident you can recognize a good deal when you see one and close it.
To break it down, you’ll need to possess some skill in most of the following areas to secure a similar selling price as a good agent:
- Market research
- Home value appraisal
- Writing accurate and attractive marketing listings
- Organizing and managing an open house
- Answering an agent’s questions
- Answering a buyer’s questions
- Staying in contact with potential agents and buyers
- Negotiating offers and counteroffers
- Handling legal paperwork
It’s not as complicated as it sounds, but it’s worth remembering that real estate transactions are involved affairs with buyers who make careful and considered financial commitments. The decisions they make will affect their lives for years to come (if not decades), so it’s a safe bet they’ll be attentive and only agree to a purchase they feel comfortable with.
Springtime tends to lead to the best prices. Many experts recommend listing your house around then as houses tend to sell faster with summer just around the corner. Winter sales take longer and attract less interest – and with it, lower bargaining power on your end.
You have to watch out for home flippers
Home flippers are used to sneaking in lowball offers before anybody else can get a look in. Acquiring houses for mediocre prices and selling them for a profit is how they make a living, so it’s common for FSBO sellers to receive a handful of home flipper offers.
And because those offers tend to come in faster than serious offers from genuine buyers, they can throw you off your game and leave you wondering whether your house is worth as much as it is.
FSBO can be stressful
While an FSBO approach can cut down on the stress of paying for and dealing with a real estate agent, you’re ultimately offloading that stress onto yourself.
Some home sellers get lucky and sell fast, receiving offers within a week.
But in reality, most FSBO sales that close quickly are between two parties who already know each other. If you don’t have a friend, a member of family, or an acquaintance on the hook (who’s already interested in buying), then you may be searching for buyers for a long time.
How to sell a house without a realtor
As you’ve seen, there are multiple ways of selling a house without a realtor. Here, we’ve broken down the two most popular processes, FSBO for direct-to-buyer sales, and iBuyer services, which offer a modern alternative to traditional selling routes.
Home flipper process
Home flipper buying processes are divided into three main steps. First, the flipper researches a property and takes a tour. They will estimate the value of a property in a state of full repair.
Once that’s done, the flipper estimates the cost of repairs, and subtracts that value from the home’s total value, resulting in a new (lower) price. From that price, the flipper then subtracts their own profit. In many cases, this is another 30% of a home’s value. As a guideline, most flippers use a formula that looks like this:
(A x 0.7) – B
A is the full value of the home, while B is the cost of repairs. For example, if your home is valued at $200,000, and a home flipper determines it requires $50,000 in repairs and maintenance, they’ll offer to purchase the home for around $105,000, which amounts to 70% of the value minus the cost of repairs.
When selling real estate as an FSBO seller, you may still want to turn to experts. In particular, you’ll need to think about hiring:
- An appraiser to value your home
- Real estate attorneys to review purchase contracts
- A title company for a title insurance policy
1. Get your home into a sellable state
Before you can market your home, you need to perform any necessary repairs. Buyers and home inspectors have a keen eye and they’ll pick up on aging paint jobs, poor maintenance, and other visual cues.
Anything out of the ordinary hints at a larger problem and has the potential to devalue the offers you receive for your home. Fluff, pet dander, odors, and general clutter all have a negative impact.
Staged homes that are free of clutter and present their best side to newcomers fetch the highest prices.
2. List your home for sale
Once your home is in pristine order, it’s time to begin marketing it to buyers. Many buyers search for homes online, and digital searches are the first place they’ll encounter your home.
For that reason, it’s worth investing in the services of a professional photographer. They will help you to present your home in its best light.
When listing your home for sale, the more detail you can add, the better. You’ll need photos of every room and of the exterior of the building. You’ll also need to make it easy for interested parties to get in touch with you – remaining flexible on your viewing dates and responding to inquiries quickly will attract the greatest number of people.
3. Host an open house for viewings
Opening your home to visitors can be unnerving. For the safest experience, you’ll need to keep a checklist of visitors and remember to check IDs. It can be helpful to have a second person on-hand to keep an eye on your visitors as they inspect the various rooms of your house and ask questions.
Alternatively, you might agree to pay the commission for a buyer’s agent. In that case, you can let the agent give tours of your house by touching base with them and installing a lockbox for them to access the keys.
4. Vet potential buyers
An offer is only as good as the person making it.
Any deposit should be transferred into an escrow account. The deposit will protect your interests in the event the buyer doesn’t stick to their obligations.
You’ll need to ensure your buyer has a mortgage lender’s approval for a loan to buy your home before moving on to the next step.
5. Negotiate offers and make counteroffers
Once the offers start coming in, the negotiation process begins. How flexible you’re willing to be on the final sale price of your home is the deciding factor. Remember that it’s normal for buyers to try and undercut your desired selling price to save money.
That’s where your own counteroffers come in.
The deciding factor on your end is your leverage, and that’s determined by the number of offers you have on the table. If there’s a lot of interest from multiple potential buyers, you’ll have better bargaining power. However, a key drawback of this stage is that you will probably be negotiating with a buyer’s agent.
Those agents are experienced negotiators and know how to navigate the buying process without going over budget.
Some buyers will make purchase offers that include contingencies. For instance, a prospective buyer might only agree to a contract if you agree to repair or renovate some things they discovered during the inspection.
6. Get a home inspection
Home inspections are unnerving to many buyers – and with good reason.
Depending on the state, you may have to organize an inspection before marketing your home to buyers. The problem is that inspections can turn up defects you weren’t aware of, and you’re usually required (by law) to disclose all knowledge of existing defects.
Based on an inspection’s findings, you may need to renegotiate with your buyers if repairs would be too costly.
7. Comply with legal disclosures
The legal requirements for real estate sales vary by state, making it a good idea to involve a real estate attorney. In general, most states mandate a purchase agreement and settlement statement.
A purchase agreement details the buyer’s offer and explains how they’re going to finance the purchase. In most cases, that happens via a mortgage. Other terms, including continencies and the date of the transfer of ownership, are also included.
A settlement statement is an additional document that summarizes all the financial details of the contract. It details how money changes hands, who (e.g. an agent) gets paid for what, and how much is owed in taxes.8. Close the Sale
The final step in closing the home-selling process is to formally transfer ownership of the real estate. This happens with the aid of a title company, who ensures you’re entitled to hand over ownership. Certain states might require that lawyers or notaries oversee the closing step.
iBuyer gets its name from “Instant Buyers” who have lots of capital on hand to invest in real estate. Using algorithmic strategies, iBuyers estimate the value of your home with big data without needing to see it.
The biggest upsides include:
- No commission fees to pay
- No repairs or upgrades are necessary
- No need to host an open house
- No need to vet and verify potential buyers
1. Request an instant estimate
All you need to receive an instant estimate is your home’s address. iBuyer uses big data to figure out how much your home is worth in minutes. It’s a great tool to try even if you intend to go the FSBO route.
You’ll know what your home is worth without needing to hire an appraiser.
2. Receive a cash offer
All cash offers you receive on iBuyer are without obligations. Many homeowners receive their first offer within 24 hours, and instant buyers can be found across 41 states all over the U.S.
3. Make a decision
The power is in your hands to decide whether to accept or reject a cash offer. Once you do, you’ll show a representative around the house and pick a closing date. Further negotiation on your final selling price is up to you – if you feel an instant buyer has missed something important, you’re free to talk to them about it.
4. Sell your home
iBuyer is meant to take the hassle out of selling your home. You don’t have to worry about repairs, maintenance, and upgrades. You won’t have to renovate or redecorate. Nor will you need to run an open house, offering showings to prospective buyers.
With a little luck, homeowners can close the deal on their homes in as little as 7 days.
Find out what your home is worth
Now that you know how to sell a house without a realtor, the biggest question to ask yourself is whether it’s worth it to you. With the right mindset, research strategy, and a smidge of luck, you can sell your home for a fair price and save money while you do it.
Are you a homeowner who needs to find out how much your home is worth to trusted buyers? From Anchorage to Boston and Dallas to San Francisco, we connect vetted iBuyers with homeowners looking to sell their homes without a realtor. Click here to find cash buyers in your city with no obligations.