Should you try to sell your home yourself? Not before asking yourself these questions.
Selling a home can be daunting. There are a lot of steps to the process, and the outcome will have a big impact on your financial future.
Most people hire a real estate agent to help them sell their home. Of course, doing so comes at a cost. Listing agents typically charge a commission of 3% to sell your property. Although, there are some discount brokers who may charge as little as 1% or 1.5%. Still, this is a hefty sum when selling a home valued at hundreds of thousands of dollars.
You may want to avoid this big expense when you’re selling your home by listing your property yourself instead of working with an agent. But, before you do that, there are three big questions you need to ask yourself.
1. How will I price the home?
Pricing your home right can be the most important — and most complicated — part of listing a home without an agent.
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Agents are familiar with comparable properties and can make a good assessment of what your home is worth. But you probably don’t have an in-depth knowledge of what’s going on with your local real estate market. As a result, it will be harder for you to set the right price.
If you price your home too high, you may assume you can just drop the cost. But there are pitfalls to doing that. For one thing, you’ll lose potential buyers who would have found your home when it was first listed due to new home buzz. Second, if buyers see a bunch of price drops, they may figure there’s something wrong with the property or that you’re desperate to sell. They may come in with a lowball offer.
On the other hand, if you price your home too low, you’ll miss out on money you could have gotten had you set a more competitive asking price. Ideally you don’t want to just pay off your mortgage balance — you also want to make a profit when you sell.
2. Am I comfortable reviewing offers?
When a buyer is interested in your property, they’ll submit an offer on the house. This won’t just include the sale’s price, though. It will also cover lots of other details such as:
- Contingencies (conditions that have to be met before the buyer is required to go through with the purchase)
- A closing date
- Who will pay closing costs
- Who’s responsible for prorated fees (These are things like property taxes and HOA fees that you and the buyer may each be responsible for paying for part of the year. For example, if you paid a full year’s worth of HOA fees and the buyer moves in six months into the year, they’d owe you six months of fees back.)
If you don’t understand the details or don’t know what to look for, you could make costly mistakes that an agent could have prevented.
Of course, you’ll also have to be ready to negotiate the terms of the sale with the buyer. That means knowing how to play hardball so you don’t agree to unfavorable terms — but not being so aggressive that you scare the buyer away.
3. How will I get my house in front of potential buyers?
Making sure the maximum number of people see your property is essential if you want to sell it. To do that, you’ll probably have to get your home into the Multiple Listing Service (MLS). The MLS is actually a bunch of local databases of homes for sale. Agents use it, as well as websites that buyers use to search for properties.
You can’t list a property on the MLS if you aren’t a licensed real estate broker. As a result, if you don’t use an agent, you either have to use a flat fee service to get your home listed or you’ll need to figure out how to market the property in some other way.
If you’re comfortable listing your property yourself, you’re ready to review offers, and you’ve got a plan for marketing your home, you may decide you’re good to go with selling the home yourself so you can reap the commission savings. But be certain you’ve thought this decision through so you don’t make a costly mistake that you come to regret.