Looking for suggestions from others who have sold their house without having a real estate agent involved. We are moving, so after the move is complete, we'll put our current house up for sale. The loan company we used for the new house insisted that we use their specified agent to buy the new house. We had no choice.
When I bought our current house 17 years ago, neither the owner or I had agents. I got a termite inspection, and we got the local attorney to draft up the paperwork. I wrote him the check. That was it.
Obviously, I'll be having to advertise on my own, but I would like to know what others might have recently experienced good or bad by not having a real estate agent involved on my part. I assume the buyer will probably have an agent and they can pay the fees. Closing costs will likely be split between buyer and seller.
> Looking for suggestions from others who have sold their house without having a real estate agent involved. We are moving, so after the move is complete, we'll put our current house up for sale. The loan company we used for the new house insisted that we use their specified agent to buy the new house. We had no choice.
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> When I bought our current house 17 years ago, neither the owner or I had agents. I got a termite inspection, and we got the local attorney to draft up the paperwork. I wrote him the check. That was it.
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> Obviously, I'll be having to advertise on my own, but I would like to know what others might have recently experienced good or bad by not having a real estate agent involved on my part. I assume the buyer will probably have an agent and they can pay the fees. Closing costs will likely be split between buyer and seller.
But Mr. Penry, without other real estate professionals involved, exactly who will be determining the cost of the survey?
I think the biggest problem you will have is that most real estate agents won't touch a "for sale by owner" - so it is very unlikely to get much traffic.
Additionally, if you set a price based on no commissions, then later decide to go with an agent you won't be able to up the price to cover commissions.
There are "for sale by owner" services that can get you house into the multiple listing services - check those out.
Are you and your wife prepared to field calls 24/7 about it and show the house at times that are not convenient for you?
Finally, have a frank conversation with a Realtor that you know and discuss all the pros and cons.
No recent experience here. Back in the day when I was shopping for a house though, my experience with "For Sale By Owner" was that the house was usually priced too high and the owner was a dick to work with. If I were to sell my house, I would hire a professional and take a vacation to let him/her do their job. The owner/seller talks too much at a showing.
Around here, real estate agents hop all over themselves trying to show a "For Sale By Owner" house. They will want their commission, but will sometimes drop the fee from the usual 6% to something around 3-4%. The biggest problem we had was like was earlier said, be ready to field phone calls 24/7 and be ready to show the house (or turn away someone) at anytime to any walk up or drive by - having a "shown by appointment only" sign or language will only dissuade a few from coming by when they see fit. Also, be ready for the people that aren't really interested in buying your house, but who want to come in to see what you've got and how you've decorated. But probably the biggest thing, is that most realtors will not waste their time showing properties to folks who can't afford it or who have bad credit ratings. You can get a lawyer to prepare an earnest money contract on such people and even get a deposit from them, but some will take it right down to the wire and then want you to owner finance it or have problems and want their earnest money back. These types can delay you from selling your house until their contract runs out and can take you right out of the optimum time to sell your house or screw up the timing you have on buying your new house. Just something to think about - I hope you have better luck.
With a for sale by owner, you can “cooperate” with a buyers agent and pay them a 2% commission. A buyers agent normally wants a 3% portion. But 2% of a quick sale is better than nothing.
The potential buyer will pay for inspections and appraisal. But be aware that if inspections find issues, you will have to address these or reduce cost of sale. If the appraisal comes in lower than the offer, then you may get beat-up during the situation and have to lower contract price to the appraised value. You can also challenge the appraisal, but will have to pay for a new appraisal yourself. Then the bank will fight you if the appraisal you paid for is higher. Lots of justification.
There is a lot of work and liability in not being represented. I sold a house last year without an agent, and no buyers agent also. There were hiccups in the transaction, but it did go thru.
On a second house sold last year, I did use an agent for selling (2%) and paid the buying agent 2% also.
Are any of your clients Realtors?
At least 25% of my clients are or they are referred to me from a Realtor. So as much as I am a "Do It Yourself" kinda guy and think the Realtors are making to much for the work they do. I WOULD NEVER, risk the working relationships by not using one.
I've bought my two houses over the years by private transaction, no agent, just a lawyer to make sure the paperwork was right.
But in selling the first house I had no luck by myself. I had to generate all the traffic by ads and signs because local agents won't touch a "fizzbo" (FSBO). Most of the traffic was people entertaining themselves on a Sunday afternoon with no serious intention of buying any house, people who had no clue about how to obtain financing, people who wanted me to finance them, or people scouting for fixer-uppers to flip and who turned around when they entered the house.
After too much time I went to an agent. I tried to negotiate that if anyone I had shown the house decided to buy it he'd reduce his 7% commission, and he laughed at me. By then we were into winter and he didn't get it sold during his listing period. Shortly after that another agent found a buyer at my original price (less 3.5% for her and 3.5% for the guy with the expired listing). Then they took another few hundred in "processing fees" that they hadn't told me about.
Call a bunch of Realtors and tell them that your surveyor told you that you could probably have a Realtor list it for a quick 25-bucks. 😉
I don't have any great advice for advertising for sale by owner, but I did see someone do it down the street from me and they sold it very quick. If some Realtors call, suggest that you will let them have a small cut if they bring in the buyer, and price it accordingly.
The biggest incentive (as far as I am concerned) is getting it listed. If you do go with a Realtor, visit several and see if they will negotiate. I had a Realtor (an independent guy) offer to split the commission with me if I brought in the buyer, and give me a discount if he both listed it and actually got the buyer. (Which actually happened. He had an open-house and got the buyer himself.) He also offered me a discount on the finding of a new house if I him for both the sale of my house and showed me new homes. Further, they often want (or used to want) 7%, but I found you can negotiate that as well. There are also more companies that offer much less fee to list it for you but have different fees depending on how much they have to do. I would try to find an independent realtor who will work with you. Many of the big companies have rules they have to abide by and no room for negotiating.
The house I am in I purchased without a realtor and the seller sold without a realtor. We both were happy with the amount of money involved in the transaction. We did have to have a lawyer involved with the bank mortgage.
Didn't hurt a bit.
I also bought our current house from a private party. Not a big deal and this was about 17 years ago. I think we saw the ad in the local paper. I think with all the internet traffic you might have some luck selling it.
According to TV finance guy Dave Ramsey, never buy a new house until you have sold the old one.
Also, when the prospective buyers find out that you will carrying two mortgage notes,
their know you are anxious to sell the old one and might ask you for a $5K or $10k price
reduction,
Good luck!!!
I sold our last house FSBO about 18 years ago. It was pretty straight forward. At the time I picked up a copy of a FSBO book which went over the transaction and paper work that needs to be dealt with. Back in the day I had to get the forms from the local Nes-Stevens Legal Publishing store but now that stuff can be gotten on-line. You might want to pay the money to get a house inspection and appraisal before you go to market. I'm not sure if the prospective buyer can use that for closing but it is a good way to avoid being blind sided when they get them done.
As far as I can see, the only thing the Realtor did was get the buyer to the make an offer. With the exception of the MSL you can do that just as well as them, if not better, if you are willing to put a little work into it. On a side rant, nothing makes me think that the Realtors are a waste of 6% is the number of empty flyer boxes I see when I walk around town. They should at least make an effort to market you place of that kind of money. Once the offer has been made, the title company did most of the heavy lifting.
As for the selling your place after you are in the new house your lender usually requires you to get a bridge loan if you are going to use your equity as the down-payment for the new property. They may require you to list with an agent for that. When you are trying to sell you current house there is no reason your buyer has to know you are desperate to sell.
"The loan company we used for the new house insisted that we use their specified agent to buy the new house. We had no choice." I'm not sure if this should even be legal. It seems a little fishy to me, kind of like saying I'll give you the loan if you pay my wife an additional 6% of the value of the loan.
Just my 2 bits worth.
John
First go online and get the house listed cost about $ 500.00 . I think we used Igloo .
I have done it twice . Got lucky sold first one after second person looking . Sold second one after first person looking. Wife had cookies baking in the oven it sold the house .
We also let Agents show the house for 2% .
