For sale by owner vs. real estate agent
Discussed in This Article
- What are the advantages and disadvantages of selling a home by yourself?
- No commission fees
- Direct communication with buyers
- Flexibility with your schedule
- Deciding the sale price
- Do you own paperwork
- Why go it alone
What are the advantages and disadvantages of selling a home by yourself?
Thinking of offering your home for sale by owner? You’re not alone; about 10% of people do. KSL Homes looks at the pros and cons of selling on your own instead of relying on a real estate agent.
No commission fees
Perhaps the biggest motivating factor for listing your house for sale by owner is cost. All real estate agents charge a fee for their service. While that fee is negotiable, you can expect to pay anywhere from 3-6% of the sale price. So, if you sold your property for $500,000, you’d need to pay at least $15,000 to your agent.
If you’re looking to sell quickly, there’s another advantage. Homes for sale by agents may have a higher listing price to allow for the commission. Selling alone, you can ask a lower asking price, which may help you attract buyers, and still net the same amount.
When you sell a home yourself, you're responsible for all the marketing.
Direct communication with buyers
When you work with an agent, they’ll be the ones handling all of the marketing and inquiries. Selling by yourself, you’ll be responsible for finding buyers. That may mean hanging signs, fielding calls, making flyers and/or posting your home listing online. You may also want to host an open house.
If you don’t have time to promote and show your home to interested parties, you’ll appreciate handing the reins over to someone else. But if you would rather walk potential buyers through your property, you don’t necessarily need anyone else.
Cutting out the middle person also may help you expedite the sale. You’ll be able to negotiate directly with buyers rather than going back and forth with a third party.
You choose when to show your home to potential buyers.
Flexibility with your schedule
When a real estate agent is arranging showings, you may need to leave your home at unexpected times. This can be particularly challenging if you work from home or have young children you need to get out the door.
When you go the FSBO route, you dictate when you’re available for showings. You will need to be organized, as you’ll be responsible for setting up appointments. But knowing well in advance of when people will be coming has its advantages. You can give yourself time to stage your home, i.e., quickly vacuum and put away the toys.
Like showing off your house? You'll be walking prospective bidders through your property.
Deciding the sale price
A real estate agent should be keenly aware of the current housing market: what homes are selling for, how quickly they sell, etc. If you sell alone, you’ll need to do a bit of research to determine a reasonable asking price. You can get a good idea of prices by searching KSL Homes, where you can look up similar properties for sale in your community.
Keep in mind, buyers may consider some neighborhoods more desirable than others. When pricing your home, take into account factors such as schools, local amenities and HOA fees.
Search homes for sale on KSL Homes
You decide the price when you're selling a house without a real estate agent.
Do you own paperwork
For sale by owner also means paperwork by owner. You’ll be responsible for printing out the sales contract, known as a “real estate purchase agreement.” This will include information such as:
- Buyer and seller details: name, addresses, phone numbers
- Deposit amount and date due
- Total selling price
- Conditions of sale, such as approved financing or property inspection
- Final details such as closing date and possession date
You can find legal documents online, just be sure to carefully read them so you fully understand what you are signing. If you are negotiating offers, you may also want to supply an “offer to purchase real estate” document.
While you may not be required to notarize the documents, it is a good idea to have a witness when you sign the contract. They should be a neutral third party. You may also be responsible for getting the documents to a title company.
Why go it alone
Selling your home without a professional agent will take extra work on your part, from marketing to showing and final paperwork. But if you’re able, you can save yourself thousands of dollars in agent fees.
