How Selling a House Works

For Sale by Owner
Making upgrades, such as installing hardwood flooring, prior to placing your house on the market can often result in a higher selling price.
Making upgrades, such as installing hardwood flooring, prior to placing your house on the market can often result in a higher selling price.
Photo courtesy stock.xchng / photographer Daniel K. Gebhart

Though it's the exception rather than the rule, selling a house without an agent can be done. With some hard work and good research, you may be able to save a lot of money -- up to 7 percent in some cases [ref]. Keep in mind that those savings can be hard to achieve and are very market dependent, especially if brokers are cutting their rates.

Beyond possible savings, there are other good reasons to try selling your house on your own. You know your home best and may be able to communicate its benefits and history better than a broker who has only recently come onto the scene. Conducting your own home sale also gives you complete control. There's no wondering if a broker is being honest with you, nor will you have to deal with someone telling you how to handle your home.

You will have to contend with a lack of exposure -- you probably won't have access to MLS or a broker's contacts. Buyers are also usually more comfortable dealing with a broker. Be prepared to settle for a lower sale price than you might get with an agent.

Selling your house on your own is time consuming and potentially stressful. You will have to place ads on your own, schedule tours, personally negotiate, and find and book any needed professionals (inspector, lawyer, title company).

Still, if you feel up to the job, don't let those reasons deter you! You can indeed save money, and acting as your own agent can be a satisfying experience. So read on for some tips for selling on your own.

Tips for Selling on Your Own

First, make sure you comply with fair housing laws. Next, advertising is key. Advertise in local papers' classified ads, and look into real estate papers or weekly newspaper inserts. Find sites that allow you to advertise online like For Sale by Owner or the National For Sale by Owner Network. Your ad should include basic information like the number of bedrooms, bathrooms and special amenities. Certain phrases can help, such as those that mention a below market price or furnishings included in the sale.

When selling on your own, you're probably looking to save money, but investing in a nice wooden sign for your yard can make a big difference. Depending on the company, you should be able to get an attractive, professional sign for $100 to $200. (Plastic signs and stands can run for less than $50.) It's worth it. Put it in your front yard where it's visible from the street. Make sure it has your phone number on it. Including an information box with handouts about your home can be helpful; besides providing general information like a floor plan and features, listing the asking price can help to weed out buyers who aren't ready to commit.

Plant some flowers and clean up planters to enhance your home's curb appeal.
Photo courtesy stock.xchng

Talk to your friends, acquaintances, co-workers, bar tenders, doctors, lawyers and anyone else! Ask them if they know someone who's looking for a house. Not only can this help find you a buyer, but someone who comes through a friend eases the process.

Be careful of brokers calling -- they may promise a buyer, but letting them bring just one buyer over may make you responsible for the agent's commission. You can have an attorney draw up a document stating that you don't have an exclusive agreement with an agent but are willing to pay him or her a fee if the house is sold to a referred buyer. This fee is usually 1 percent to 3 percent of the purchase price, or half of a typical commission.

Throughout this process, proper pricing is essential. A house that is priced too high risks going stale, as we discussed before. And a price that continues to fall as the house stays on the market undermines your negotiating leverage and communicates to prospective buyers that you're uncertain how much your home is worth.

If you do manage to find a buyer and come to an agreement, congratulations! The closing process is essentially the same whether working with or without an agent, so we'll cover that later in the article, but it's recommended that in either case you employ a lawyer to draw up a contract of sale. Local regulations vary dramatically, and though some handbooks have copies of standard contracts, that contract may not be valid in your area.