With the internet playing such a huge role in selling a house these days, going it alone—no real estate agent in sight—can look like a pretty simple decision. There are a few big reasons you’re probably considering this route, like being able to skip the 6% commission fee and having complete control over everything from asking price to showing times.
These are worthwhile pluses, and they shouldn’t be ignored. But before you decide to take the plunge all on your own, you should also take a look at some of the potential downfalls.
Pricing. A large part of a real estate agent’s upfront work is research. How much have similar homes sold for? What are prices in the neighborhood like? What developments are down the road for this area?
Unless you live and breathe real estate, those questions may take a lot of time to answer. Even then, pricing your own home can be difficult for sentimentality’s sake. Many homeowners set their initial asking price too high and scare off would-be buyers. Others make the mistake of setting it too low and lose money they might have gained.
You may still have to pay commission. Just because you’re forgoing an agent doesn’t mean your potential buyers will. When a seller pays that 6% commission, his or her agent typically splits it with the buyer’s agent—meaning you’re still responsible for that 3% unless you can convince the buyers to pay for it on their own. 3% may be a lot better than 6%, but it’s still more than most expect when deciding against an agent.
It may take longer. Selling a house with a realtor isn’t often a speedy process, but doing it yourself could take even longer. There are several reasons for this. First, without a realtor you won’t have access to the Multiple Listing Service, which agents use to advertise to other agents. That means less visibility, leaving you to put more time and energy into marketing on your own.
Also, unless you or a spouse can make selling your house a full-time job, you’re going to have to work around your current schedule, limiting your opportunities to show the house. When you do show it, expect to still have to wade through the usual amount of window-shoppers and nosy neighbors.
The bargaining and paperwork. Even after you’ve found a buyer, the difficulties aren’t necessarily over. Without a real estate agent to act as buffer between you and the buyer, negotiations can get dicey. Often, for sale by owner homes attract bargain hunters who expect a lower price. The key is to not get emotional, and also know what you’re willing to compromise on from the start.
Closings also come with a lot of legal paperwork, and without an agent to handle it for you, you’re going to need to do a lot of research or else risk your biggest investment. There are buyer’s contingencies, disclosure laws, and title and deed requirements to get up to speed on, and if it ends up being too overwhelming, you may have to involve a real estate attorney anyway.
The bottom line?
Selling a home on your own can be great if you have the right experience and already know what you’re doing. If not, sticking with an agent can actually save you hassle and money.