The closing table is where you want to walk away with as much money in your pocket as possible when you decide it’s time to sell your home. Many homeowners will sell their house without contacting a realtor simply because they prefer to do it themselves.
Homeowners who sell a home without a realtor are known as for sale by owner, or FSBO (pronounced fiz-bow in the industry). FSBO refers to the process of the homeowner listing, advertising, marketing, displaying and showing their home, as well as negotiating with buyers and finalizing the sale themselves.
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By Owner for Sale (FSBO)
Discover below the pros and cons of selling a home without the help of a realtor – and what you need to know. Additionally, we’ll discuss five other possible options for selling your home in the remainder of this article.
The Advantages of Selling a Home Without a Realtor
Using an agent when you want to sell your home is a significant expense; on average, agents charge 6% of the sale price for commissions. Most often, this fee is shared by the seller’s agent and the buyer’s agent.
If you’re a FSBO seller, you may have to pay your agent’s 3% commission. But if you have an agent, you may owe it to them. Regardless of the outcome, 3% – 6% of the home sale price will go to the seller, which would otherwise go to an agent commission.
Having a Cash Buyer is a Good Idea
Home sellers needing to sell their homes fast can sell to a professional home-buying company that will make a cash offer. Your situation could be complicated by a divorce, a job relocation, or an inherited property that you want to sell. A company like “We Buy Houses,” “Ugly House Buyer” and others like these might be your best option if you don’t have the time or patience to put your home on the traditional market.
You Can Sell to an Ibuyer
If you want to sell your house without the involvement of a real estate agent, then consider selling to an iBuyer, an online real estate investor who makes instant offers on homes. A higher price is charged on the market after that. It’s not “internet,” but “instant” in iBuyer.
You do not have to do multiple showings when selling to an iBuyer; you only show the house to the iBuyer(s) who are interested in purchasing it. Selling your home without a realtor means you won’t need to pay a commission. It will also save you money to not hire a professional photographer or purchase promotional materials.
Consider a Discount Brokerage
Using a broker service is another option. Selling your home is easier when you work with a discount brokerage. However, they earn a lower commission than most agents, usually about 1% to 1.5%, rather than 2% to 3%. The agents accept these commissions because the brokerage service refers them to more listings, so they don’t have to market to sellers directly.
Additionally, all paperwork will be handled for you, you will get exposure on the MLS, and advertising and marketing materials will be handled.
The Importance of Hiring a Realtor
Many people believe realtors are paid simply to fill out a few forms, but this is not the case. Professional realtors have licenses.
To become a broker, a person must go to school, obtain a license, complete continuing education, pay for broker fees, association fees, and cover all their hours worked.
There are many valuable functions that agents perform. An agent lists your house on the local MLS, markets the property through advertising, brochures, and more, arranges showings and open houses, acts as an intermediary between the buyer and seller, and attends the closing with you. Once a deal is closed, agents are paid their commission.