Selling Your Home Without an Agent & Understanding the Legal Issues
Some homeowners try to go through the process of selling their home without retaining an agent. This saves them the expense of the agent’s commission, or at least half of this amount, since they may need to cover the commission for the buyer’s agent. However, less than 10 percent of real estate sellers choose to sell their home on their own. The evidence suggests that people who use FSBO (for sale by owner) net a lower price for a home than people who are assisted by agents, and this difference more than negates the cost of the commission. If you live in a market that favors sellers, this may be less true, and if you have a friend or family member who wants to buy your home, the FSBO route may be logical.
Another advantage of selling your home on your own is that you may be able to attract more buyers by listing at a lower price, since you do not need to take the agent’s commission into account. You also may be more familiar with your home and able to present it more enthusiastically than a professional agent. On the other hand, you will not have the broad understanding of sales trends in your area that an agent can offer, so you may need to invest more time and effort in learning about the process. Putting your home on the market, advertising it, and showing it to prospective buyers may involve a greater effort than you expect.
Pros and Cons of Selling Without an Agent
Avoid paying (some) commission fees
List at a lower price to attract buyers
Use your own familiarity and enthusiasm to sell
May be harder to gauge the market
May involve more time and effort
May entail additional costs for things such as advertising and consulting professionals
Marketing Your Home
The main place to start in advertising your home is online, especially for an FSBO property. You can arrange with an FSBO website for minimal cost to list your home on the same Multiple Listing Service database that real estate agents use. You can also consider creating a website for your home, which does not need to cost anything other than time. Taking photographs or videos of your home to post online can help attract the attention of prospective buyers.
In addition, you can post traditional For Sale signs on your property. These will be visible to people who are driving through the neighborhood in search of a place where they want to live. You should place the sign close to the road and include a phone number where you can be reached, which may be a designated line rather than your personal line. Sometimes homeowners get a listing sheet that can accompany the yard sign and that they can distribute among their acquaintances. This should capture the distinctive features of the property in a concise, readable manner. The listing sheet should include photos and your contact information.
It may be a good idea to have a friend or two at the open house for safety’s sake.
Another option is to hold an open house to generate publicity for your home. This can be a way for real estate agents who represent buyers to find out about the sale. Since you will be interacting personally with prospective buyers, you should make sure to keep your emotions in check. You should not seem overly eager or enthusiastic, nor should you take offense if a visitor makes critical comments or does not seem genuinely interested in buying the property. The tour can cover each room but should not immerse the guest in details and should give them some physical space. Professional attire and manner can encourage a buyer to trust you.
Negotiating and Completing the Deal
Once you receive an offer, you will need to take the time to go through the necessary paperwork and make sure that you understand it. At this stage, you may want to retain an attorney to clarify any technicalities and advise you on how to complete the contract. If you choose to negotiate with a buyer over an offer rather than simply accepting or rejecting it, you should think about your goals in the negotiation process and identify areas in which you are willing to compromise. Sometimes a seller and a buyer in an FSBO situation can negotiate face to face in a single meeting until they reach an agreement. In other cases, they may go through a more formal process of written counteroffers.
Either the seller or the buyer can draft the final contract, but it is not valid until both of them have signed it. Many states require an attorney to assist you in this phase, and it is probably a useful precaution even if it is not required. The attorney can help you comply with your obligations under the contract, as well as the laws of your state. For example, you likely will need to make certain disclosures to the buyer about material hazards or defects on the property.
After you sign the contract, you will need to take care of any contingencies and make sure that the buyer removes contingencies on their side so that the deal can go through. Otherwise, you will need to either renegotiate the deal or call off the deal and put your home back on the market. Even though you are not using an agent, you can get assistance from an attorney or an escrow or title agent to help you manage the details and address any obstacles that arise.
Explore the Justia Lawyer Directory
Even if it is not required by state law, consulting a real estate lawyer can help a seller without an agent navigate the selling process. Justia offers a lawyer directory to simplify researching, comparing, and contacting attorneys who fit your legal needs.