Do you need a real estate agent to help you sell your house?
When it comes time to sell a house, many people choose to work with a real estate agent. According to the NAR (National Association of Realtors®), 86% of home sellers choose to sell this way. But before you make a decision, you should know that selling with a real estate agent comes with some benefits and drawbacks to consider:
Pros:
- They bring expertise: Real estate agents offer valuable insights into the market and can help you make informed pricing decisions based on local market information.
- They take care of marketing and negotiations: Agents handle the logistics of scheduling showings and negotiating with buyers.
- They handle the paperwork: Throughout the home sale process, a real estate agent will manage all the intricate legal paperwork.
Cons:
- There is a cost: You need to be mindful of closing costs and real estate agent commissions, which will impact the overall financial outcome of your home sale. Real estate agent commissions average 5%–6% of the sale price of your home, while closing costs average 1%–3%.
- Not all agents are alike: Real estate agents don’t have equal levels of experience and skills, and some specialize in certain types of real estate transactions. A less-competent agent may provide misguided advice and hinder your sale.
- You’re obligated to work with that agent: Working with a real estate agent involves a legally binding brokerage contract. You are committed to that agent for the agreed-upon period.
What does it mean to sell without a real estate agent?
If you don’t want to work with a real estate agent, you don’t have to.
Selling a house without a real estate agent means you are essentially selling your house by yourself. This means, depending on your selling methods, you may only need a lawyer and a closing company. The closing company would bill the buyer or the seller, which will be worked out during closing, and your lawyer would assist you with legal paperwork.
Keep in mind that you will be in charge of the entire process, from listing to showings to closing. It may seem daunting, but it’s worth considering if you prefer having more control over your sale or are in a seller’s market.
Options when selling a house without a real estate agent
Working with an agent isn’t the only way to sell a house, and it’s always a good idea to know your other options.
Off-market home buyers
Pros:
- Get a fast home sale: Off-market home buyers like HomeVestors® have a quick turnaround time when buying a house. Instead of the typical 2–3 months it takes to sell your house on the traditional real estate market, you could sell your house in as little as 3 weeks with HomeVestors. But if that sounds too fast, we’ll work with you to figure out a closing date that works for your schedule.
- Avoid home repairs and renovations: Since you have the option to sell “as is,” you don’t have to make any repairs to get your home buyer-ready. When you sell your house “as is,” you can avoid home inspection delays. With some off-market buyers like HomeVestors, you can skip home inspections entirely. You can also forego decluttering, updating, and staging your home.
Cons:
- You might not get top dollar: When you sell your house to an off-market home buyer in its current condition, you are selling at a discounted price in exchange for a simple, convenient sale.
- There’s less opportunity for a bidding war: Selling to an off-market home buyer means that you won’t have the opportunity to haggle with multiple buyers. This means you don’t have the chance to potentially sell your house above listing price.
iBuyers
Pros:
- Get instant online offers: iBuyers work mainly online, and they provide a service where you can get an offer on your house by putting information into their websites.
- You can sell your house from anywhere: Since iBuyers are not localized, you have the option to sell your house regardless of its physical location. Most iBuyers work exclusively online and will only visit your house for an in-person assessment once you’ve accepted their initial offer.
Cons:
- Their offers can change: An offer from an iBuyer is subject to change. This can be due to new information such as inspection results.
- Many iBuyers operate by charging fees: Many iBuyers charge fees as a part of their buying process. According to Forbes, iBuyer fees can be as high as 13%–15% of your home sale price. It’s important to ask about what fees might be involved and if they could change during the transaction.
FSBO (for sale by owner)
Pros:
- You save on real estate agent commission fees: Real estate agents have historically charged around 5%–6% in commission fees. When you sell FSBO, you can reduce the cost of selling your house.
- You can still list on the MLS (Multiple Listing Service): While selling FSBO lets you advertise your property in online neighborhood pages like Nextdoor, you also have the option to utilize the MLS on your own. This is where over 80% of sellers list their homes, according to the NAR.
Cons:
- You could make less money from your home sale: When you don’t have access to the expertise that an agent or an investor would bring, you may price your home too low and lose money. Conversely, you also run the risk of pricing your home too high, which could make it sit on the market for months.
- The selling process can be time-consuming and expensive: Since you act as your own agent during the FSBO process, you need to do everything yourself. This includes decluttering, cleaning, making possible repairs and updates, staging, marketing, negotiating with buyers, and everything else that comes with the home-selling process.
Real estate attorney
Pros:
- They can draft thorough contracts: Real estate attorneys have expertise in legal documentation, and their thorough contracts will include things like deadlines for inspections and appraisals, details of the sale price and closing dates, and any conditions, caveats, and contingencies.
- They can help resolve disputes: They can also assist with resolving issues between you and the buyer. Common property disputes during a home sale include deposit disputes and disclosure disputes.
Cons:
- A real estate attorney doesn’t assist you with the sale of your house: While they help you close on your sale without issue, they won’t help you market and stage your house or negotiate price.
- You need to already have a buyer: A real estate attorney isn’t the same thing as an agent—their job is to assist you with the closing process. That means the entire home-selling journey before that point is up to you as the seller.
Paperwork needed to sell a house
As you prepare to sell your house, you should know what paperwork you’ll need along the way.
Documents you need before your home sale
- Original sales contract: This is the agreement made with the previous owner of the house, including the date it was bought, the terms and conditions of the agreement, and any disclosures.
- Appraisal from your original home purchase: You will need to provide your buyer with the appraisal report from when you purchased the property, as well as any documented updates since then.
- Mortgage payoff statement: If you’re selling before you pay your current mortgage off in full, you’ll need this document. It includes the total payment needed to satisfy the terms of the mortgage loan, including any interest owed until the day you plan to pay the loan in full. Keep in mind that this is not the same as your most current balance owed.
- Homeowners association (HOA) documents: These will include articles of incorporation, bylaws, rules and regulations, homeowners’ dues amount statements, copies of the minutes from the association’s meetings of the past two years, and the declaration of covenant, conditions, and restrictions.
- Maintenance and repair records: These include receipts for roof repairs and chimney cleanings; appliance warranty plans; dated records of most recent painting, gutter cleanings, and window washings; and a utility map for your electric and gas systems.
- Homeowners insurance records: You will need to provide your buyer with information about any damage and repairs you’ve done to your house. You will need proof of homeowners insurance, as well as a claims reports list of all the claims on your home from time of purchase.
Documents you need to start your home sale
- Listing agreement: When working with an agent, this document outlines the arrangement between seller and agent. It also gives your agent the exclusive rights to sell your house within a specified amount of time.
- Comparative market analysis (CMA): This is a report that compiles information about local home sales, including houses that have recently been sold and houses that are currently for sale. This information will help you form your home pricing strategy.
- Seller’s net sheet: This is a worksheet that your agent provides, which shows you how much you may expect to gain from your home sale, factoring in taxes, real estate agent commission, any remaining mortgage, and escrow fees.
- Preliminary title report: Also known as a “prelim,” a title search can help you and your agent understand what’s owed on the property, as well as whether there are any issues impacting the title that could hold up the sale or reduce the house’s value.
Documents you need during the home sale
- Mandatory disclosures: Transparency is important in any real estate transaction. Depending on where you live, you may have mandatory disclosure laws to provide awareness to potential buyers of your house’s history of damage or any hazards. Hazards could include lead-based paint, asbestos, environmental hazards, water damage, defects/malfunctions of major appliances or systems, neighborhood nuisances, and property disputes. If you live in California, you will need to provide a natural hazards report, since the state is more prone to natural disaster events like mudslides, brush fires, and seismic movement.
- Purchase offer and counteroffer forms: A purchase offer outlines the agreement between the buyer and seller, which is subject to changes during negotiations. This document details the identification and specifications of the property, as well as the offer price from the buyer.
- Final purchase and sale agreement: This is a contract drafted by both parties’ agents. This will include information about the selling price of the house, the terms of the purchase, earnest money amount, the closing date, and any sale contingencies. Both buyer and seller need to agree to the terms and sign before moving forward with the sale of the house.
- Contingency removal form: A contingency is a condition that must be met before the deal can close. A contingency removal form is a document showing which contingencies have been removed or satisfied from the real estate contract.
Documents you need at closing
- Home appraisal report: If your buyer requires a mortgage loan, the lender will require an appraisal to determine the fair market value of your house.
- Home inspection report: Typically, a buyer will require an inspection before closing on a home sale. This document details the condition of your home’s structure, electrical system, plumbing, heating, fireplaces, etc.
- Tax statements (most recent): You will need to provide recent property tax receipts to your buyer so that they can estimate their property tax costs at closing.
- Closing statement: Your closing statement will provide you with information on how much money you can expect to receive from your home sale after closing costs, taxes, and other transaction fees are considered.
- Deed: This is the legal document that officially transfers the ownership of your house to the buyer. The document identifies both parties in the sale and provides a thorough description of the property sold.
- 1099-S tax form: You’ll need this document if you don’t qualify for a capital gains tax break. In most cases, you won’t need to report your home sale to the IRS. According to the Section 121 exclusion, a single filer won’t need to pay taxes on up to $250,000 of net profit, or up to $500,000 if filing jointly.
Should you sell your house without a real estate agent?
The decision to sell your house without the help of a real estate agent depends on your circumstances.
Selling a house involves intricate legal processes, negotiations, and market knowledge that real estate agents and other professionals are trained to navigate. Without professional guidance, sellers may find themselves overwhelmed by paperwork, pricing inaccuracies, and potential legal pitfalls.
Selling your house without a real estate agent depends on your comfort level with navigating the complexities of real estate transactions, as well as your ability and readiness to invest time and effort into the process.
Work with an off-market home buyer you can trust.
Luckily, hiring a real estate agent isn’t the only easy way to sell your house. With direct buyers like HomeVestors®, you can enjoy many of the advantages without the typical drawbacks. When you choose to sell your house to HomeVestors, you get:
- No commissions or hidden fees: Real estate agents and iBuyers charge fees that will need to be calculated as an additional cost to your home sale. With HomeVestors, you don’t pay us, we pay you.†
- No marketing, staging, or showings: Since we’re off-market buyers who come to you, you don’t have to pay staging companies, schedule showings, or advertise your home to potential buyers at all.
- No stress: A home sale comes with a lot of steps, hurdles, and hassle. When you choose to sell to HomeVestors, you get a simple, streamlined process that focuses on you and your selling priorities.
Choose HomeVestors for a simple home sale, free from complex negotiations, extensive paperwork, and commissions. Ready to sell with ease? Contact us today for your free consultation!
This blog is for informational purposes only and should not be considered legal advice.
