Selling a house takes work, knowledge, and patience, which is why so many homeowners opt to hire a real estate agent to do it for them. However, many people successfully sell their house themselves, and save money in the process. Learn more about selling your home on your own.
The biggest advantage of selling your home yourself is that you could save a lot of money. On average, real estate agents charge a 6% commission on sales, which could translate to tens of thousands of dollars. By handling the sale on your own, you essentially give this money to yourself instead of someone else.
Choosing the "For Sale By Owner" route could also help keep you from losing money on the sale. If you don't have much equity (value after expenses) in the house, selling through an agent could actually force you to spend money from your own pocket to pay them. Say that you sell a house worth $400,000 with a $390,000 mortgage, leaving $10,000 in equity. If the house sells for $400,000 through an agent at a 6% commission, you must pay the realtor $24,000. Unfortunately, the leftover equity won't cover the fee, so you'll have to come up with an additional $14,000 out of your own pocket. In the end, you lose money.
Perks of Hiring A Pro
Unfortunately, as with anything, there are some potential down sides to selling your own home. One of the most common problems is owner bias. People tend to be emotionally attached to their homes. Therefore, they may insist on sticking with a certain asking price for the house when it's actually worth far less or even find that they're reluctant to follow through on the deal and actually say good-bye.
Another potential problem? On average, people who sell their own homes receive 10-20% less for the home. One reason is that they simply because they lack the bargaining skills that a good realtor possesses. The average person doesn't have the honed negotiation skills of a trained, experienced realtor. Another reason is that if you come across a savvy customer, they'll likely be aware that a portion of the cost would have gone to cover realtor fees and make a lower offer. What's more, if they went through a realtor, then you still might have to pay that agent a 3% commission.
Setting Yourself Up For Success
If you ultimately decide to take the For Sale By Owner route, there are some basic things you can do to improve your chances at success. The first thing you need to do is clean the house from top to bottom, including those oft-ignored areas. You'll be showing your home to prospective buyers, and a clean home leaves a better impression. Clutter or excess furniture should also be cleared as it can make the home look much smaller than it is.
Next, you should have your property evaluated. This gives you a more accurate and realistic idea of what you can sell your house for. Be sure not to rely on property tax assessments, which are often out of date, and therefore inaccurate. Instead, hire a qualified appraiser. If you put in the leg work and market your home well, then you can save thousands by selling your own home.