There are many homeowners who would like to sell their homes by themselves, thus saving money on commission. But who can you trust to tell you the truth about the how’s, the why’s, and the risks?
Nine times out of ten, you really can’t trust someone who is trying to sell you something (that’s probably more like 99 out of 100, truth be told). The tough part is that those people are the ones who are most well-versed in real estate. At the risk of becoming unpopular with my Realtor peers, I’m going to follow my teacher heart and explain home sales to you honestly.
First of all, can you sell your house on your own? Yes. Should you sell your home on your own? That depends.
Table of contents
- 1 Top 6 Ways to Sell Home Without Paying Commission
Top 6 Ways to Sell Home Without Paying Commission
The more buyers who see your home, the better your chance of getting the best purchase price
For the best chance of getting the best price for your home, you need as much exposure to buyers as possible. If you are in a very high-traffic area, you have a much better chance of getting more exposure; however, that exposure will only be local. There are many, many out of town buyers on the market to buy a home and you don’t want to exclude any of them.
This is why many people consider Buy Owner and other similar services. Being as objective as possible, I’ll explain that Buy Owner collects a large sum of money up-front to advertise your home in places other than the MLS system. Buyers and Realtors most commonly use the “MLS” or multiple listing service system.
It is a system tied to “IDX” which is a cooperative effort among all Realtors to list all homes for sale. By doing so, it creates the most competition among homes, and therefore is beneficial to property values. When you buy a car, you can only buy a car in that dealer’s inventory. When you buy a home, all Realtors have access to all listings, regardless of which Realtor is on the sign.
Getting listed on the MLS
There are opportunities for getting listed on the MLS for a flat fee. Doing so would give you the much needed advantage of exposing your house to more buyers, while saving you the cost of paying a “listing agent” commission, which is typically 3%.
However, to do so, you are obligated to offer a commission to a buyer’s agent. Although you’re entitled to offer any amount to a buyer’s agent, keep in mind that people are motivated by money. If a typical buyer’s commission in your area is 3% and you offer 2%, it’s not much different than having one company offer you a $30,000 salary and another offering you a $50,000 salary.
While a Realtor should not refuse to show a home, he is entitled to be more enthusiastic about showing a home with a higher commission. By getting exposure on the MLS, you do still have a chance of finding an unrepresented buyer, which would mean you won’t owe a buyer’s agent commission. Alternatively you can check the website like cobbcountydreamhomepro.com for more information about listing for sale.
Are all MLS listings created alike?
Absolutely not! If you’ve ever searched online for a home, you must have noticed that some listings have multiple quality pictures, and important details that catch your attention and give you the most information about the home. Other listings have only one picture of poor quality and little to no description.
Most buyers skip over these listings. There are also various sites that offer MLS searches like Realtor.com. A quick search on Realtor.com will show that the different types of listings vary greatly in their presentation. Be sure that when pricing MLS listing services that you are comparing apples with apples. Most flat-fee listing services also have a time limit; be sure you know how long it will be posted for the fee.
Do you have the time to sell your own home?
FSBO homeowners typically get inundated with many phone calls; more of them will be from realtors and mortgage brokers, than from potential buyers. This can take a significant amount of time away from your work day. One way to avoid the calls from Realtors is to have a Realtor list you on the MLS. It is illegal for a Realtor to solicit from a seller who is already listed by another agent.
Either way, you will still have the responsibility of answering buyer inquiries and requests for showings. Buyers are also notoriously impatient. Are you able to show your home with little notice? If a buyer is here from out of town and has a limited amount of time with which to look for a home, it’s likely he won’t wait to see yours. This is less of an issue for some people if they work from home.
Who really saves the commission?
Most buyers who look for FSBO’s are doing so because they want a “deal.” They are hoping, or even expecting, to save the amount of the commission when they buy your home. This means that you’ve spent your valuable time, perhaps even taking away from your own job, so that someone else can save money? It’s definitely something to keep in mind while negotiating with the buyer.
What about negotiations and paperwork?
Let’s say you’ve found a buyer. Let’s even pretend that it is an unrepresented buyer and you manage to negotiate a deal that saves each of you half of a typical commission. Now what? You’ll need to complete paperwork, and the sales contract is only one part of that paperwork. There are necessary disclosures to a real estate sale.
For example, if you don’t have your buyers sign a disclosure explaining your homeowner’s association dues, they could be released from the contract if they decide they don’t want to have that obligation. You can purchase these forms online or at a Staples or similar store. Be sure to get a complete package.
Many homeowners feel uncomfortable completing the paperwork on their own. There are also many steps to supervising a closing that a realtor is well-versed in handling. One option would be to hire a real estate attorney.
Another option is to hire a realtor who would handle the paperwork, cover you with errors & omissions insurance, and supervise the transaction through to closing. A typical fee for a realtor to handle the negotiations, paperwork, and closing is about 1%.
If your buyer is being represented by a realtor, you will have someone who knows how to complete the paperwork and supervise the transaction to closing. This person has a vested interest in seeing the deal close so that she can earn her commission.
The only challenge here is to be sure that your interests are protected. This would be your responsibility because the buyer’s agent’s responsibility is to protect her client. It is still an option, however. Be sure to ask a lot of questions as this may help.