You want to sell your home. Maybe you accepted a job opportunity in a new place. Maybe some family circumstance requires you to relocate. Maybe you just want to move the upscale part of town because that’s what you deserve. Regardless, you’re taking the steps necessary to sell your home. Traditionally, an important step has been to hire a realtor to manage the selling process. After all, you’re a busy individual who doesn’t want to worry about listing, walkthroughs, or paperwork. Besides, aren’t there legal reasons to hire a realtor? This is a question racing through many sellers’ minds when they choose to sell their home.
Quick and Dirty Legal AnsWer
No law in the United States specifies that you must employ a realtor when selling your house! In certain states, a real estate attorney is required to manage the transfer documents and closing process. During the selling process, however, no real estate agent is required!
When you choose to sell your home, you have a number of options. You could:
1. Sell your home on the housing market through a realtor
2. Sell your home on the housing market by yourself (Sell by owner—No Realtor)
3. Sell your house ‘off-market’ (No Realtor)
Let’s consider why you may want to go through a realtor. Firstly, realtors have complete access to Multiple Listing Service (MLS) data and understand it fully. This resource can be extremely useful in effectively pricing a house relative to an area, features, etc. It is also a realtor’s job to manage the steps in selling a house you may otherwise not want to deal with. Listing, scheduling walkthroughs, marketing to potential buyers, and everything your busy life schedule may not allow. You do, however, pay a price for these services…one that can be expensive. The average realtor commission, as a percentage of the sale price of your home, is 5-6%. Consider a sale price of $250,000. That would equate to a realtor commission of $12,500-$15,000, about ¼ of the average household income in the country! For many, this commission may just not be worth it. After all, there are resources available to help someone list and manage the sale of their own home. Is listing a house, scheduling walkthroughs, and marketing your own home to buyers worth $15,000? For many, no. This realization lead to the increase in popularity of selling a house by owner.
Thinking about selling your house without a realtor?
Suppose your ‘can-do’ attitude and self-drive inspire you to sell your house by owner. Why pay thousands of dollars to a realtor when you could probably do it yourself? You’ve got Zillow, Redfin, Realtor.com and tons of other data sources to help make informed decisions about pricing. Let’s do this! Many sellers go into the market with this attitude and it’s saving them thousands of dollars. There are tons of routes to take for this option alone. However, there are a few things to cover first. You must go into the FSBO process with a professional, persistent, and motivated attitude. Data shows that homes sold by their owner earned less than their realtor counterparts. At the same time, those that earned more paid a realtor commission. Suppose you cycle through this in your head, and FSBO makes sense. Here are some things to consider: Where to list, who to hire to perform the closing process, photos, and scheduling. Successfully selling a house by yourself can save you thousands of dollars…dollars you can invest elsewhere.
Suppose you need to get out quick. It is urgent. Maybe the property is a rental and you’re having trouble with a tenant. Maybe repair/renovation costs would be too much to justify. Maybe you just don’t want to deal with the property. This property has given you countless headaches and you’re ready to just throw your hands up. Selling your home ‘off-market’ may be the best option for you. There is no realtor involved and there are no commission fees charged. We wrote an entire article outlining this process and its pros/cons. Check it out here.
You do not need a realtor to sell your house. However, it is important to consider your situation when selling. Good rules of thumb are as follow:
Realtor – Good option when you do not have the time or desire to manage the selling process and do not mind paying 5 or 6 percent as a fee for this service.
By Owner – Good option when you have either the time or drive to sell your own home and manage all the processes that are involved (Listing, marketing, etc.)
Off Market – Good option when a move is urgent/costly. You can receive a cash offer for properties that need some TLC, or you just don’t want to deal with. Read more here.
We hope this helps in the sale of your home! Best of luck.
Interested in selling you house off-market?