Real Estate

Guide to Selling a House Without a Realtor

August 30, 2023

For many Americans, a house is the biggest investment—and return—of a lifetime. It’s common to default to using a traditional real estate agent to make sure you dot all your i’s, cross all your t’s, and negotiate the best deal.

But like any professional, realtors’ services aren’t free. It can cost you thousands of dollars in realtor commission fees for their time and expertise. The alternative: you can opt to act as your own agent.

So what does selling a house without a realtor entail? Let’s dive in.

Why Sell a House Without a Realtor?

Whether you’re selling house due to job relocation or downsizing, the process is all the same, and you’re probably able to forgo hiring a realtor. Why sell your home without a real estate agent? Money is the primary motive. A DIY approach with no seller’s agent fees is especially appealing for those who have related expertise or experience:

With sales and negotiation tactics
As legal professionals familiar with contract review
In construction, home inspection, or renovation of homes
As a seller and buyer of multiple past homes
In designing, staging, and decorating homes

How Much Can You Save?

Home sellers typically pay the full cost for both seller and buyer agents, structured as a percentage of the sale.

As of May 2023, the average total commission rate was 5.46%.¹ It may not seem like a large percentage, but if we use the first quarter of 2023 median single-family home sale price of $436,800, that 5.46% adds up to $23,849.²

Owner-sellers don’t typically avoid sales commission fees entirely, however. Usually, the commission percentage is baked into the contract that a seller signs with their agent, and at closing, the selling agent splits that fee, usually 50/50, with the buyer’s agent.

Sellers without realtors typically offer to pay at least a 2% commission directly to a buyer’s agent.³ Without noting that this percentage fee is available in a home listing, buyers’ agents have no motivation to show for-sale-by-owner (FSBO) properties to their clients, and these properties will attract a much smaller pool of potential buyers.

In the example above, a 2% buyer’s agent commission means that the home seller would pay about $8,736 at closing, lowering the amount saved to $15,113.

Pros and Cons of Selling a House Without a Realtor

There are risks and benefits to opting for an FSBO listing instead of signing with a seller’s agent.

On the benefits side, without a realtor you can:

Save money on real estate agent commissions and other realtor fees
Take charge of marketing, communications, and negotiation for your home sale
Control timelines without basing them on an agent’s availability

Only 10% of home sales in 2021 closed under an FSBO arrangement.⁴ Although saving on commission fees is tempting, there are more risks than benefits for most.

Lost Profit

From an agent’s perspective, you get what you pay for. If your home takes longer to sell and closes at a lower price with you in charge, that could outweigh saving on agent commissions.

According to the National Association of REALTORS®, the typical FSBO home sold for $225,000, vs. $330,000 with an agent, and getting the right price is rated as the most difficult challenge for FSBO sellers.⁴ This doesn’t mean that an agent will jump up your profit by $100,000. Likely, there is a correlation between owners of more affordable properties and those choosing FSBO to save on commissions—but pricing expertise is a critical part of what a realtor offers.

Listing agents help set a sale price that takes into account the state of your home plus some other influencing factors:

Sale and listing prices of comparable houses
Residential real estate factors including interest rate fluctuations and design trends
Local market trends and how they’ll affect your property and neighborhood
The effect of how long a house is on the market on its perceived value and saleability
Listing language to attract buyers and buyers’ agents
The impact of seasonality on the sale price and time on market

Risk of Error

Do you know your state’s regulations on seller disclosures, or under what circumstances a home buyer can cancel a sale? If you opt for an FSBO sale, you’ll need to review a thick stack of forms and documents with a magnifying glass in hand. Your home sale is a legal contract and process that, if handled incorrectly, can open you up to lawsuits and lost sales.

As you absorb articles and advice, keep in mind that real estate laws vary widely between states and change over time. How your Uncle Phil raked in profit on a contract-for-deed in the 80s two states over probably has very little bearing on the regulations and choices that apply to your sale.

Time and Effort

Seller’s agents do more than list the property and host an open house. They’re active consultants in:

Getting a home sale-ready
Pricing to close quickly at maximum profit
Marketing tactics to increase your buyer pool
Negotiating and evaluating offers
Explaining contracts and details

Estimate realistically what amount of time you can devote to taking on this role and whether you have the skill set to do so effectively.

How to Sell a House Without a Realtor

So if you decide to avoid hiring real estate agents and paying a realtor commission fee, we’re here to tell you of a few ways to attract home buyers yourself. Grab your to-do list and a pen—here are the key steps for FSBO sellers.

#1 Get Your House in Order

One of the functions of a seller’s agent is to offer suggestions on improvements and changes that can help you sell your home at a higher price or more quickly. Agents tend to know what trends and features buyers are looking for, as well as how to tweak decor and furniture arrangements to make a home look its best.

Most major renovation projects don’t pay off dollar-for-dollar in a price increase, but there are plenty of DIY cosmetic improvements that will let you increase the listing price:⁵

Up the curb appeal. Seeding your lawn yields the highest return on investment⁷
Repaint odd-colored rooms to neutral colors
Upgrade fixtures and lighting, especially in the kitchen and bathrooms
Power wash your siding and garage doors
Deep-clean windows and replace any cracked or damaged panes
Declutter and put extra belongings, furniture, and decor in storage

#2 Value and Price Your Property

How will you price your home to sell? Annual property tax assessments list values for taxation purposes, but those tend to be more conservative than actual market value.

Realtors provide competitive market analyses (CMAs) that estimate value based on your home’s features compared to similar homes recently sold or listed. Without an agent, you can:

Get a quick calculation – Online valuation calculators estimate value based on your property’s publicly listed details (square footage, bedrooms, bathrooms, year built) against similar sales and comparable homes in the area. Enter “estimate home value” in a search engine; if you try out several, you’ll generally see results within about a $5,000 range.

Get a formal appraisal – A professional appraiser inspects your home carefully and takes into account both prevailing real estate values and your house’s condition, improvements, and repair needs.

To set a listing price, you’ll also want to consider:

Comparable houses for sale near you and in similar neighborhoods in your state
Your timeline for closing a sale
Building in room for negotiation during the real estate transaction

#3 Execute a Marketing Strategy

One role of real estate agents is marketing your home to attract a potential buyer. But now that you’ve taken on the role, How will potential buyers find your home? Effective marketing can include:

A yard sign
Online listings with appealing language and high-quality, detailed pictures
An open house
An MLS (multiple listing service) placement
Social media posts, ads, and marketplace listings
Word-of-mouth through friends, colleagues, and family

This is also important if you’re planning on selling a home quickly.

#4 Manage Contracts and Negotiations

Locate and use boilerplate contracts based on your state regulations and legal requirements, and be sure you’ve thoroughly read and understood them. You may want to consult with a real estate attorney (some states mandate their involvement).

Steps that require legal or negotiation savvy can include:

Disclosure documents
Review of a buyer’s offer (or multiple offers)
Your acceptance, rejection, or counteroffer
Setting up escrow accounts
Continued negotiation following a buyer’s home appraisal and inspection
Closing documents including summary, bill of sale, title, deed, mortgage payoff

Common points of negotiation may include:

Price
Financing and appraisal contingencies
Timelines
Who pays for which closing costs
Which appliances, furniture, or other items are included in the sale
Post-inspection home repairs
Home warranties

Consider a Sale-Leaseback Program

If turning equity to cash is a key reason for putting your home up for sale, a sale-leaseback (SLB) is worth considering before you stick a “For Sale” sign in your yard. SLBs also forgo seller’s agent commissions, but require much less work on your part. You sell directly to an investor-property manager and receive a guaranteed right of residency to stay on as a renter as long as you choose.

The benefits of a sale-leaseback include but are not limited to:

The cash benefit of a sale without having to move
No more property tax or homeowners insurance payments
The investor-property manager handles and pays for covered repairs and maintenance

Key Takeaways

Forgoing hiring a real estate professional isn’t impossible. A for-sale-by-owner listing can be a success but requires research, patience, and knowing when to call in an expert. You need to understand exactly what role a seller’s real estate agent plays in a home sale, and what parts of the selling process typically engage the training and experience that an agent can provide.

In addition, be sure to understand your state’s regulations and legal requirements related to residential real estate transactions. A lot of resources are written for a wide audience and may offer suggestions that don’t apply or skip key information you need to know.

You can also avoid traditional commission costs through a sale-leaseback. If you’re looking for a streamlined process to convert your equity to cash, SLBs provide fast results plus allow you to remain in your home as a renter.

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