How Do You Sell Your House Without a Realtor?
Hey, this is Mike from Mike Buys Houses, and I wanted to share a recent conversation I had with a homeowner. He didn’t have a lot of equity in his property, but he needed to sell his property. So, he was wondering what he should do. What are his options? I told him that he could consider listing his property without a realtor.
Why would you want to list your property without a realtor?
There’s two reasons really. One is you want to save money. In this case, he didn’t have a lot of equity, so he wanted to save every cent he could during the transaction so that he didn’t have to pay to sell his property.
The second reason usually is that you want to control the whole way that the sale is done. If you want to control the marketing of your property, when the open houses are scheduled, what showings are allowed, what offers are considered, and the responses to those offers, then you might want to forgo a realtor.
If you want to have more control over all of those aspects, then listing without a realtor is a great option for you. However, as we proceeded to talk, we got into all that a realtor really does. Specifically, what is the reason that they make money in the transaction? What value do they bring to the table?
What Exactly Does a Realtor Do?
To complete a transaction for a property, a realtor actually does a LOT for you, which is why they make 6-8% sometimes on the closing. What they do is they’re going to help you price the property, understanding your neighborhood and recently sold properties similar to yours are selling for in your area. Specifically, they’ll run the comparisons and they’ll figure out what the price per square foot for your property is and then look at how large your house is to establish what your property is worth.
After that, they’re going to be able to help you market your property so they’re going to list it on the MLS, which is a huge service that other realtors use to find other people who are looking to buy properties in your area. In essence, they have a wider array of potential buyers.
These are two huge things that you’re going to have to do on your own if you’re going to list your property by yourself. In order to get similar exposure, you’re going to have to list your property on Zillow, Facebook, Craig’s List and make sure you’re updating it continuously to remain prominently displayed. It takes a lot of work to get as much exposure as you would on the MLS.
So the first two things that the realtors do to help you sell your property are they help price it appropriately by understanding your neighborhood and looking at similar properties and they market your property effectively through the MLS.
The next big thing that realtors do to help you sell your property is they actually deal with the potential buyers, other realtors, all of that grueling back and forth communication. So, just be prepared if you are going to list your property yourself on Zillow, Facebook, Craigslist, for fielding the calls, getting the tire kickers, getting the scammers, getting the lowballers, and the actually interested buyers. You will have to do all the weeding through candidates in order to figure out who to talk to. Then, you’re going to have to schedule the property showings to those people that are worth your time, showing the property to them and fielding applications, and making sure that you find buyers who you know can actually qualify for your property.
At that point, after all that leg work and you found your buyer, the negotiations begin. That’s another thing that the realtors do for you is they’re usually the communication channel between you and the potential buyers. If you want to sell your property yourself, you’re going to be acting as the only negotiator, so you need to review all of the inspection clauses, the earnest money, the price, timing, etc. There’s a lot of things to consider.
That’s all on you if you don’t want to go with a realtor.
Then, after all of that, you have to contact a title agency in order to officially close. Realtors typically have connections in your area and are able to help you with this part.
You’re going to want to coordinate the transaction with the title agency, which isn’t really that difficult, but it’s just another thing on your to do list that needs to be done in order to sell the house.
Then, it’s on to the inspection period. Do any repairs that the homeowner may request or the homeowner’s real estate agent may request. At that point, you will see the seller concessions that may be requested for anything that needs to get done at the last minute in order to get the deal done.
And then…Congratulations! You finally closed on a property without a realtor!! You were able to save that 6-8%, which is a great move. However, it is a ton of work.
Those are some of the things that a realtor does to help sell your property effectively, and that’s why they earn so much in commission.
When It Doesn’t Make Sense to Hire a Realtor
However, you may have a situation where it may not make sense to sell with a realtor because you don’t have enough equity and you don’t want to pay to sell your house. In this situation, we may be able to help you out.
This is what I talked to this homeowner about in order to best describe how I could help him.
I knew a guy who was trying to sell his Ford F150 truck for a while. He built his business in this truck, watched his kids grow up in it, it meant a lot to him. He was looking to sell it for $5,000, but the best offer he got was $4,000, with barely any demand. After a few weeks, his wife gave him some motivation and drew a deadline to sell the truck.
In his panicked state, he reached out to me to figure out a way he could get his ideal value. I told him we would sell it for $7,500 and be done with it within the week. What we did was we sold his car using creative financing.
He sold his truck by collecting payments over a longer time period. What he does is he collects $250 every month in his mailbox for 30 months.
So, he sold his truck for $7,500 and it continues to pay him back every month for over 2 years! Every month he sees that check arrive and he is reminded of all the good times in that truck. It worked out so well for him.
That is a general comparison to how I might be able to help you. Homeowners who don’t have a lot of equity in their property, we help out a lot of landlords who are looking to sell their rentals, these are just a few examples where having a conversation about all of your options may enable your to find a way to make more on your house than you thought you could.