Selling your own home: Is the risk worth the reward?

You’ve heard about the market, you’ve started to think about selling your home and moving into a space that better fits your current needs. And as you look around at agents to interview and prep your home to be listed, you may wonder if you should sell your own home rather than hiring a professional.

After all, by selling a house by owner, you can nix the agent’s commission check and pocket the full closing price, less any day-of closing costs.

But, how much work is it? And, is selling a house by owner worth it?

Here, we’ll outline how to sell a house by owner — and offer some insights into the value an agent brings to the home sale, from the day they’re hired to the final moments of the closing.

1. FSBO sellers: How to determine a competitive price for your home

Setting a fair but competitive price can be the most difficult task of selling a house by owner. You’ll need to dive deep into street-level market stats, studying comparable sales prices of similar homes in your area that have sold recently.

Common risk when selling a home without a REALTOR®: If you choose to sell your own home, be careful to avoid pricing it too high — even if you aren’t in a rush to close. Many for sale by owner (FSBO) sellers rationalize that they’ll lower the price of the home if they don’t get any early offers. What they fail to realize is that the first few days on the market are the most critical, in terms of generating buyer interest and getting potential buyers into the home. On the other hand, if a home sits on the market, buyers may assume there is something wrong with it. They may underbid on the property or steer clear of it altogether.

How a Realtor helps: A real estate agent is a neutral, expert party who provides unbiased opinion on the price and condition of your property. When you’ve lived in your home for years, it can be hard to “see your own dirt” — and even harder to understand why your house won’t sell for more than the neighbor’s. It’s the job of a Realtor to help you price your home objectively and competitively on the first try.

2. Preparing to sell a house by owner: Staging, landscaping, photos and more

You can’t just decide to sell one day, and list it the next. There are many steps to sell your house by owner.

Before listing, you’ll need to:

• Work on the home’s exterior curb appeal
• Neutralize the interior by staging the property
• Take professional, high-quality listing photos that show off the home’s best features

Common risk when selling a home without a Realtor: Many FSBO sellers tend to list their home “as is,” assuming that the right buyer will come along.

How a Realtor helps: Because agents list homes for sale all the time, they have tried-and-true methods to ensure that the home appeals to the highest number of buyers online and offline. Whether it’s hiring a stager, a photographer who understands the optimal angles of a galley kitchen or a marketing plan that draws in niche buyers, agents specialize in building buyer interest quickly.

3. Listing your home for sale on the MLS without a Realtor, and making sure it hits the right buyers

In today’s web-first world, you’ll want to be sure that buyers can easily find your house when they search popular real estate websites.

Typically, in order to list your home on the Multiple Listing Service (MLS) — the network that syndicates listings online — you need to be a member of the MLS. As a seller, you can work with an agent or a flat-fee brokerage to get your listing posted on the MLS.

But that’s really just step one. Some of the most complicated steps to selling occur just after you list the home and you’re waiting for interested buyers to view it online and in person.

Common risk when selling a home without a Realtor: If you’re selling a home by owner, you should ask how the flat-fee broker will pass on buyer leads to you, and how often. In some cases, you get what you pay for and that can mean lag time between a buyer reaching out and you getting their information.

FSBO sellers also may not consider the important step of marketing the home — whether it be via local flyers, email alerts to eager buyers or via Facebook ads. Remember, the key to getting the best price at closing is to drive up buyer interest.

How a Realtor helps: Listing and marketing a picture-perfect home is a significant part of a real estate agent’s full-time job. Realtors have automated systems in place that help them keep track of buyer interest and to set up showings to interested buyers in real time. They also tend to have the marketing tools already set up, so they can set up a Facebook ad in minutes or use a tried-and-true flyer template for open houses and showings.

4. Scheduling showings for potential buyers when selling FSBO

As a private home seller, you’ll need to coordinate the logistics of showings to potential buyers, and you may wish to host an open house to draw in more traffic all at once.

Common risk when selling a home without a Realtor: Every inquiry you receive on your property is a potential buyer. So if your house is super popular, garnering dozens of inquiries from interested buyers in just a few days’ time, you’ll have to keep these buyer “leads” organized and set up individual showings so they can see the house in person. This can be time-consuming and stressful. And sometimes buyers simply don't want to deal directly with a homeowner; they may prefer to interface with a professional.

How a Realtor helps: Depending on the agreement you make with your Realtor, you can stay out of this intermediate communication with early-stage buyers altogether. You can simply ask your agent to alert you when they need the house for a showing, and make sure the home is clean and ready to impress.

5. Lowering the price if buyer interest is low

At a certain point in the home sale process, if the house isn’t getting any “bites” from interested buyers, FSBO sellers may need to consider lowering the price to draw in buyer interest.

Common risk when selling a home without a Realtor: When you’re not a professional, it can be tricky to reassess price based on local market trends. Unless you live in a townhome or planned community, it’s rare for a comparable property — one in the exact same condition and very close proximity — to sell around the same time as your home.

How a Realtor helps: Agents not only have a sense of the hyperlocal market where you live, they also know larger market trends, like when buyer demand is rising and falling, how often sellers are lowering their prices and by how much, and how rising loan rates are affecting the budgets of local buyers. They spend their days learning about the market — by performing data-based research and hearing anecdotal stories in the field — and they put that knowledge to work for you when you hire them to sell your home.

6. Negotiating and accepting a final offer when selling your own home

This is perhaps the hardest step of selling a house by owner. Whether you have one offer or a flurry, you’ll have to review and then accept, decline or counter. You may also need to negotiate other terms — the closing date, who is paying closing costs, who will pay the buyer’s agent (which is typically paid from the commission of the listing agent), and on and on.

Common risk when selling a home without a Realtor: When your house and tens of thousands of dollars are on the line, it can be easy to lose sight of your leverage. FSBO sellers run the risk of accepting a lower offer because they don’t want to lose the buyer.

How a Realtor helps: Agents can help you evaluate each offer in a more neutral way and determine if other factors unrelated to money (like closing costs and the closing timeline) can be negotiated in your favor.

7. Minimizing legal risk as you close on your home sale without a Realtor

As a home seller, you are obligated to disclose certain issues to the buyer. If you fail to disclose something pertinent during the home sale, the buyer can take legal action against you after the closing.

Common risk when selling a home without a Realtor: When you list your house for sale without a Realtor, it can be easy to miss important disclosures that an agent would have caught. After all, you’ve lived with that crack in the wall for years, and you may consider it part of the charm.

How a Realtor helps: Agents tend to play it safe, because they know the risk of failing to disclose that small crack is much higher than it seems. While it may cost a few hundred dollars at closing, it could save the seller thousands of dollars in legal fees in the long run.

What else should I know when making the decision to hire a Realtor or sell FSBO?

It’s certainly not a requirement to sell your home with a Realtor. But it may be helpful to know that when choosing FSBO vs. Realtor, the vast majority of sellers choose to hire a listing agent to guide their home sale.

The number of homeowners selling a house by owner has been on the decline for a decade, even as technology seemingly makes it easier for homeowners to sell a home without a Realtor. In fact, 92 percent of home sales have been facilitated by an agent in recent years. But why?

Most people use a Realtor to sell their home because agents:

• Help price a home based on expert knowledge of the local market
• Bring marketing expertise to the table, to help draw in more buyer interest
• Take on dozens of logistical tasks required for any home sale

• Assess and minimize risk for their clients

And not for nothing, agents can also use their negotiating skills to earn more than the list price. Many FSBO sellers aim for one static price at closing, without realizing that a house price is dynamic. After all, the value of a home is what a buyer will pay. By hiring an agent who helps draw in more interested buyers, it’s possible to receive multiple offer and a final closing price above the number you’d been hoping for.

So, while anyone is allowed to sell their home FSBO, we recommend hiring a professional expert who will act as an advocate for you as you take on what will likely be the largest transaction of your lifetime.

Key insights and next steps

If you’re looking for a local home selling expert, contact Edina Realty to get connected to a Realtor who lives and works in your area.

Additional resources to consider:

The Ultimate Guide to Selling Your Home
Selling your home: How to find the right Realtor
Common Misconceptions Homeowners Believe About Selling Their Property
Real Estate Agent vs. For Sale By Owner