DIY House selling?

MCunningham

Cathlete
Have any of you ever sold your house yourself, without a real estate agent? Do you know someone who did?

DH and I are considering selling our current to move closer to the area where we work.

We're a little sad about it because we LOVE our home, it's beautiful and wonderful and it's our dream home, but it's too far from work. We commute 130 miles round trip every day up I-95 in Maryland, which usually cuts a good 3-4 hours out of our day just getting to and from work. :( Because of this, we have basically NO LIFE, because during the week, all we can do is work and sleep, and during the weekend, we spend both days catching up on dishes, laundry, grocery shopping, vet/grooming appointments, recycling drop-offs, car maintenance (due to our mileage, we have to get an oil change every month), and doctor's appointments (we switched to a so-so doctor only because he had Saturday hours). Our to-do lists are incessant and we never have any down time.

Now, add to all of that the fact that my poor husband has developed chronic neck pain problems make him miserable during our commute... and, much less significant, the fact I plan on going back to school to finish my last 5 courses for my Bachelor's in Business... the only viable choice is to sell and move.

Anyway... because we only bought our house 18 months ago, and obviously haven't paid our mortgage down very much (we opted for 100% financing because we didn't have the $60,000 down payment), we have to basically sell it for almost exactly what we owe on it. Since the housing market is very weak right now, it's not likely we'll make a profit, and we'll probably be lucky to break even, so we basically will not be able to afford to pay realtors' fees. Because of this, we're considering trying to sell it ourselves once we educate ourselves a little bit.

So, if any of you have done this successfully, how did you know what to do? What resources did you use? Any words of caution or important dos or don'ts??

Please help!!! We're so stressed about this situation that it's hard to sleep at night anymore!!
 
I personally have never bought or sold a house unrepresented by a licensed real estate agent, and even though I was formerly licensed as a real estate broker (for a non-commercial aspect of real estate practice) I never would. And MCunningham, given what you've described as your and your DH's current situation, in all honesty I don't think it would be the best idea for you two either, for the following reasons:

When selling your house yourselves, at least one of you has to be available to be able to show the house, often on very short notice especially in this buyer's market. Plus, there are all of the tasks that a real estate agent would perform for you (writing the purchase agreement, arranging for home inspections, coordinating the closing with your title company or closing attorney, coordinating the closing with your current lender, coordinating the closing on your NEW home, etc.) that you would have to do yourselves in addition to your respective current jobs. Even when you know what you're doing, selling a house (from the moment you list it until the moment you turn over the keys to the new owners) is a JOB. Be prepared for that;

Also, as you are already aware, BUYING another house is a job in itself as well. Do you plan on buying your next house unrepresented? Can you handle the double tasks of coordinating a house sale and house purchase? Again, very time-consuming things, and given that you and your DH have an extraordinary commute in addition to your actual jobs, you need to pay attention to that;

An experienced agent is experienced in, among other things, negotiating price and terms of the sale. Are you or your husband skilled at market negotiations, especially in a market that ISN'T in your favor? Real estate agents' fees are not inconsiderable, but from what I've seens the good ones earn every penny and are worth every penny. That being said, it can often happen that your agent will try to hustle you into accepting the first offer that comes along in your ballpark rather than holding out for a better one, since the incentive for selling your house at a higher price might not benefit the agent as much as you (a good few chapters in the book "Freakonomics" makes that point very well). Be clear on the lowest price and terms you'll accept, and be ultra-realistic about that in your market area;

Often, real estate agents are disinclined to help their buyers purchase FSBOs because there is less financial incentive for them to do so, and FSBO sellers often try to use the buyer's agent to perform tasks for them - again, arranging for the closing, inspections, etc. - that the seller's agent would normally do; you might find the pool of available buyers sharply reduced if buyers in your area tend to go with agents when they purchase;

Because of the legal ramifications of houses / real estate (as opposed to personal property) the seller can be in a buttload of trouble if something is wrong with the physical property and/or the chain of title to that property; these are problems that an experienced agent can circumvent before the closing, and could share responsibility for if the problems arise after the closing.

Anyway. That's my Point-Oh-Two, FWIW. I'm interested in what others have to say n the subject.

A-Jock
 
A-Jock, said it very well! I would like to add this. Plan on being in your house two years to avoid capital gains tax. Even if you think you'll "break even" the government may not see it that way. I am a realtor "in escrow", basically not practicing right now. The whole reason I studied real estate was because we attempted to sell our own house once and were very frustrated by the process. Be VERY educated before you attempt this. It really is not easy, but also not impossible. Good luck!

Sally
 
Well, as I said before, the only reason we are considering doing it FSBO is because of it being very unlikely that we'll barely break even, let alone make any kind of profit.

Since both of you are real estate agents, how do you suggest I approach a real estate agent with the knowledge that I may not break even? There's no way that I have the 3-7% or whatever out of pocket to pay an agent.

Is that 3% thing a hard-and-fast rule, or can you negotiate lower or even for a flat fee? The thing is, aside from showing the house, we are willing to do a lot of the legwork like setting up/paying for the inspections, etc. So it's not like I'd be asking them to do back-breaking work in exchange for peanuts. Just asking if that's ever been done or heard of, because if not... we don't have a choice. We can barely afford to break even on this house, let alone LOSE $15-30k on it.
 
Hi again, MCunningham! Keep in mind that I'm no longer licensed in real estate at all; my above comments were from memory and are not to be construed as professional advice.

There are no hard-and-fast commission structures. A realty house might have its own policy of what percentage of the purchase price they'll charge as a commission, but that goes broker by broker. There is no real "industry standard" although you'll hear that phrase bopped around a lot. Keep in mind that the agency that lists your house will get the entire commission BUT will normally have to split the commission (again, the amount of the split is negotiable) with the agency that locates the buyer.

There are agencies, both local and nationwide, that offer reduced commission structures for reduced services; some will charge a very small percentage simply to list the property on MLS (Multiple Listing Service). That might be an option for you, if you are willing and able to do the other mechanics of the sale yourself. I don't know what your state or region has for similar agencies, but in my neck of the woods there are at least two realty chains that do precisely that. Very low commission, with commensurate very low levels of service. And I've seen journalism about individual agents who do have a flat fee-per-service schedule in addition to traditional commission splits for full service.

Time to start perusing your local papers very carefully, and do some online and word-of-mouth research.

A-Jock
 
Aquajock, and the other question you asked about purchasing our next home unrepresented... well, we don't plan on it, but a lot of people in this area are requesting agent-free sales because of the soft housing market. We'd prefer to have an agent for both the selling and buying aspects, but they cannot be the same agent, since our cuurent home is several counties away from where we'd like to move.

Also, if you are selling your home FSBO, then how does the buyer's agent get paid? If we are trying to avoid having to pay real estate commissions at all, do we have to demand that the buyers not have an agent, either?
 
I sold 2 houses and a parcel of investment property without a realtor.

I talked to people that have sold houses before and people in the industry to find out what to do and who customarily pays what. I'm sure you can find a bunch of stuff out there on the internet about it. It's not rocket science and you'll save a lot of $. In most sell by owner transactions, the buyer will have a realtor. The buyer's realtor will help a lot in faciliating the process and you'll only have to pay a partial commission.

But considering the softness of real estate market right now, it might be beneficial to list your home with a realtor so they could market your home. It will probably take longer to sell it on your own.
 
MCunningham,

I can relate to your dilema! I am a real estate agent as well, however, I have been actively practising in Arizona for almost 10 years now.

I do understand that people sometimes feel they can't afford the real estate commission. My thought is, if you can save the money, by all means, do it!

However, my experience is, that selling your own home is extremely time-consuming (think, open house every weekend, be present for showings at a moments' notice, etc.), cost-intensive (ads, flyers, etc.) and most of the time people who look at open houses are lookiloos, they want to see the decoration, they are nosy and for some people it is a hobby to go to open houses on weekends. By all means, that is not a phenomenon that happens to only FSBOs, if I do an open house, I have the same challenge. Most people who come to open houses will NOT buy the house. If you only have but one house to sell, odds are you'll be spinning your wheels.

I mean, a lot of things have to happen in order for that one house to sell, it has to be in the area those people are looking for, it has to be exactly what they want AND it has to be in their price range. I dare to say, the odds are about as high as hitting the jackpot in the lottery.

As a rule I have found that people who want to buy FSBO want to either get the same "break" in commission that you are trying to save or have not so genuine intentions (meaning they are trying to "rip off" inexperienced home sellers). So whereas saving the commission sounds like a great idea at first glance, you may end up paying more than you would have had you hired a GOOD real estate agent.

The other thing is, most people who are serious about buying a home and can actually afford it, will hire a real estate agent. Why wouldn't they?? They have the agent do the leg work for them (most people are short on time as it is), without being out any money upfront.

To answer your question about the "hard-and-fast rule". There are no hard and fast rules! Real estate commissions are negotiable, by law they are not set by any board or association. There may be companies or agents that will only do x or y commission but that is a company policy.

To give you an example, I used to work for Century 21 and Coldwell Banker, whereas they are good companies, they are very inflexible with commission (at least here in AZ). This was one of the reasons why I left and went to work for my current broker.

Now, from my perspective, I have done 0 % commission on my end or a couple of hundred $$ flat fee for people in similar situations as yours. However, it was either because they were soooo upside down and they were referred to me by a previous client and/or they were buying another house with me as the buyer's agent and I was getting paid on that end.

Keep in mind, most of the time, the listing agent will not be the one selling your house, they will have to pay the buyer's agent and offer a co-broke for those agents to be willing to show your house. Again, there are no standard commissions, however, most of the time, as an agent working in the best interest of my client, I have to stay within the parameters of what is "usually" offered in MLS as a co-broke. Here in AZ it's 3 %. Any lower than that, odds are, it will not be shown by other agents.

If you were an agent, looking for a new home for a client and you had the choice of 50 to 60 homes that could meet the parameters that your clients have given you, you will have to narrow it down, you can't show all 50 homes at first. So, in general, the ones that offer less than the 3 % will get kicked out first! Do I agree with this practice? No, I absolutely not! However, I do have to admit unless I think it is the PERFECT home for my clients, I will put it on the backburner and only show it if the others don't work.

To put it in perspective, if you were looking for a new job and you get two job offers, exactly the same job, everything else being equal, one job offers you $ 90,000 the other $ $ 60,000 which one would you take??

Having said all that, I think you should look for an agent who is genuinely interested in YOU and building a long-term relationship with you, not only for a quick commission check. I think your best bet would be to find someone who is mostly working by referral. In general, they are not so much interested in the quick buck, but in long-term.

Ask around, talk to neighbors, family, business associates who they recommend. Meet with several agents and ask lots of questions. And be very careful to not fall for the ones that tell you what you want to hear in order to get the listing.

If you can't find anyone through your friends, feel free to email me directly, I don't know where in MD you are, but I have a few agents that I can recommend who are in the same coaching company as I am, and subscribe to the same business principles as I do. Very good friends of mine work in in the Rockville and Bethesda areas, at least I could ask them who they would recommend in your area.

Not withstanding what I said above, you may be in a situation where it is not a smart idea to sell from a financial point of view. You may have to stay put for a while until the market picks up again and put up with the commute. However, if you can't put up with the commute, it may cost you financially, only you can decide how bad you want to change this and if you are willing to take a financial hit for it. However, it may not be a finacial hit, after all is said and done, because depending on where you buy your new house, it may be a better deal in the long run.

Get as much information as you can, look into pricing in the areas that you would consider and weigh the pros and cons. And, first first and foremost, get someone who can help you to get that information.

Again, feel free to email me directly if you have any questions. Understand, I don't work in your area and I can only give you general information about what I would look out for or what I would ask, if I was you.

Good luck!

Carola
 
>Aquajock, and the other question you asked about purchasing
>our next home unrepresented... well, we don't plan on it, but
>a lot of people in this area are requesting agent-free sales
>because of the soft housing market. We'd prefer to have an
>agent for both the selling and buying aspects, but they cannot
>be the same agent, since our cuurent home is several counties
>away from where we'd like to move.
>
>Also, if you are selling your home FSBO, then how does the
>buyer's agent get paid? If we are trying to avoid having to
>pay real estate commissions at all, do we have to demand that
>the buyers not have an agent, either?


After I wrote my novel below, I saw that you say that your current home is several counties away and it cannot be the same agent. My understanding is, that many agents in MD are licensed and practising in several counties because the counties are not as big as say in Arizona.

If you want to avoid real estate commission at all, yes, you will have to demand that the buyer has no agent or only offer that agent a flat-fee or whatever. Truth being told, in a soft market like it is, you probably will be losing the serious buyers. But the question is, why would a serious buyer forfit the benefit of a real estate agent and buy a house without agent? It's gonna have to be THE house they want or they want a serious break on buying the house.

Can it be done FSBO, yeah, I guess, the question is just, how much time do you have and how familiar are you with real estate contracts?

Carola
 
Thank you all for your advice... I'm really reconsidering the FSBO thing, but the only way we can work with a realtor is if they are willing to accept a flat fee or a much lower commission. So... a lot will depend on that.

Carola, I'm in Rising Sun, Maryland, which is in Cecil County. It's in way north MD, near Delaware and Pennsylvania.

Well... we're going to make a plan and figure out what we can and cannot do from a financial standpoint. As far as the home we HOPE to buy... we're trying to downsize to a smaller house/yard for ideally the same price or slightly lower than the purchase price of our current home ($380,000). So, in the long run, hopefully it will all work out.

Please cross your fingers for me!! Also, if anyone else has any feedback, I'd be very interested to hear it... I'm trying to make the least disastrous decision for my family at this point... I am just working on deciding which, out of the not-really-great options, is the best for us in the long run.
 
>Carola, I'm in Rising Sun, Maryland, which is in Cecil County.
> It's in way north MD, near Delaware and Pennsylvania.
>
So where are you going from Cecil County?

I checked and most agents there will work several counties. One agent I know, works Harford County, Baltimore County, Baltimore City, Cecil County, Carroll County, Howard County, Anne Arundel County, some other agents that I looked up work at least 3 or 4 counties in any given area in MD.

It's kind of mind-boggeling to me, but my friend who works in the Rockville area told me a few months ago that most agents there will cover several counties. I thought she was pulling my leg.

So if you can find an agent who is familiar with your current area and the new areas that you are interested in, I think you should be able to negotiate a better deal on the commission.

I would recommend to stay away from those flat-fee or do-it-yourself companies that are popping up all over the country, unless you know that agent. In my experience, their whole business model is based on taking any listing at any price. They are not the least bit interested in selling the listing, they are interested in getting calls from potential buyers and then just take the buyer down the street where they make 3 % commission instead of their few hundred $$ flat fee.

It doesn't sound like you have great options at this point, but there maybe options that you haven't thought about or things may not be as bad in your area as you think. You won't be able to make an educated decision without knowing all the facts and options. Find out what your home is worth, what the prices are in the areas that you consider and take into consideration what it costs you to drive that far every day - with the gas prices as it is, I am sure that is quite a bit.

Not to mention the time wasted in a car, yikes!!! Less time to do Cathe workouts :)

Good luck!!!


Carola
 
I just wanted to chime in with my experience selling my first home as a FSBO. I agree with everything the other posters said. I checked out some FSBO books from the library and they made it sound so easy. HA! The demands on your schedule when you work full time will be a pain in the butt especially if you work far away from your home. Buyers are used to being able to see a home whenever they want. With an agent, they can do that. I had several people call wanting to view the home in the middle of the day. When I would advise them of the time I was available, most of them did not show up after committing to see the house at a certain time. Real estate "investors" calling with all kinds of ridiculous offers was another pain in the butt. After a while, it was hard for me to be polite because it was all wearing on my nerves. I had an open house every weekend for a month and no one showed up to any of them. Cleaning the house, getting signs up on major intersection, balloons, flyers, etc... became a hassle. Not to mention, the county picking up my signs before I had a chance to retrieve them meant buying the same signs several times.

I had two offers within a 30 day period. The first one fell through and the second one turned out to be the buyer from hell (long story short, a 30 day closing dragged out to 90 days because the buyer had financing issues even though we were presented with a pre-qualification letter by her agent). To make matters worse she had a relatively new and inexperienced agent who other than taking care of the paperwork, was not much help with more complicated matters. I only ended up paying 3% commission to her agent but, in retrospect, I would have gladly paid the 6% commission to my agent to avoid having to deal with the major issues that cropped up.

We were also buying the house we are in now unrepresented at the same time we were selling the first one. I actually prefer looking at houses on my own because the agents I have used to buy houses in the past wasted so much time taking me to houses I was not interested in. I told one guy I wanted a house that was no older than 5 years. I saw quite a few houses with shag carpet and wood paneling x(. Luckily, the seller's agent for the current house was an old pro and made the situation much more manageable once all the problems with our buyer started to pop up. Needless to say, we are going to call her next year to sell this house for us. She wasn't even our agent but still managed to keep two deals from falling apart.

I personally would put up with the situation for a little while longer just to be sure that there would be no capital gains tax. And who knows, maybe the market will have improved 2 years from now. I have a 40 minute commute myself so I understand how you feel. I'm sure this is not a decision you've made lightly but you probably need to work through a few financial scenarios to see if you will indeed make a profit for tax purposes. It's easiest to back out of the calculation by starting with the price you expect to get and if it's a buyer's market, you will need to reduce that price and factor in paying their closing costs and an agent's commission. Maybe if you work out a few scenarios with different commissions, you'll be able to use that when selecting an agent. If they know that you can't pay over a certain amount, they may be willing to accept it just to get the listing.

Tracey
"Do or do not. There is no try." -Yoda
"Where there's a will, there's a way."
 
We sold our old house through America's Choice. We had listed it with two different realtors and it was on the market with them for probably about 6 months. This was 10 years ago, so I can't remember all of the details. We saw an ad for America's Choice, where you pay them for a set amount of advertising and signs, but you hold the open houses on your own. It took us about 4 months to sell it this way. The layout of the house was great for a couple, but not so great with children since the master bedroom was upstairs and you had to walk through it to get to another bedroom (great for a nursery, though). We also did not use a realtor for either of our house purchases. My husband and I knew what we wanted and figured why be bothered with a realtor. Just my two cents, but you certainly don't need a realtor, but make sure you have a good lawyer to look over any purchase offers (just to be on the safe side!). And no, neither of us are lawyers!

Good luck with your decision!
 
I agree on the lawyer, however, if you are in a state like Arizona, California, Colorado, or a few others, there are no lawyers involved in the closings.

The agents will write the contracts and the closing is done through the title company and you basically have to rely on your real estate agent that they know what they are doing.

I guess it is different from state to state. If you are in a state like Arizona, where I work, unless you know real estate laws, you better find a good agent.

Carola
 
Carola,

Well, we're looking to go from Cecil County to either Howard or Anne Arundel County, which would be right near Ft. Meade (where we work).

I'm wondering how you know that agents work in several counties? Can you just look up that information? I hate the idea of calling a bunch of realtors just to ask them if they're able to work in all three of these counties... is there a way to just narrow it down to the ones that you KNOW work in the counties you're interested in?

Please do let me know... I'm really interested in this. It would be much easier to work with the same agent for both selling and buying.

Thanks! :)

Meg
 
>>>>>Carola,

Well, we're looking to go from Cecil County to either Howard or Anne Arundel County, which would be right near Ft. Meade (where we work).

I'm wondering how you know that agents work in several counties? Can you just look up that information? I hate the idea of calling a bunch of realtors just to ask them if they're able to work in all three of these counties... is there a way to just narrow it down to the ones that you KNOW work in the counties you're interested in?

Please do let me know... I'm really interested in this. It would be much easier to work with the same agent for both selling and buying.<<<<<<<<<<<

Not Carola here but from my knowledge in real estate most agents are licensed per state, not county. So, if they have a license to do business in the state you are in, the county shouldn't matter. However if you have an agent & the person selling the house has an agent you are looking at paying the buyers & sellers real estate agents. A lot of time though the seller will pay for closing costs, commisions, etc...

I work in the mortgage business but I don't have a real estate license, I work for Wells Fargo so the agents come to me to get financing for the loans.

I bought my current house w/o a real estate agent but had I of not been in the mortgage industry for 10 years like I have, I wouldn't have done it.
 
>I'm wondering how you know that agents work in several
>counties? Can you just look up that information? I hate the
>idea of calling a bunch of realtors just to ask them if
>they're able to work in all three of these counties... is
>there a way to just narrow it down to the ones that you KNOW
>work in the counties you're interested in?
>

Sorry I didn't answer this earlier, I went to a dog show for the weekend and just came back.

I don't think there is a public database where you can look this up, as far as I know. I have been in the business for almost 10 years, so I know quite a few agents all over the country and ask them for recommendations in their specific state, I am also part of a coaching company, where I do get access to a non-public database for agents all over the country, who work based on the same business principles as I do. That database includes the information what counties those agents are working.

Yes, we are licensed per state not per county, however, there are different realtor associations/boards providing MLS, so unless you are paying your dues several different boards, you won't get access to that particular MLS.
In my case, I only get access to two different counties, Maricopa and Pinal county. However, Maricopa county and Pinal county both are so huge that I don't think I could cover anymore than that.

However, I do know that several of my realtor friends in MN, MD, WI, etc. have more counties that they are working in and actually are familiar with, because either of the set-up of the board covering more counties the reason being that the counties are smaller/cover less of a population or because the counties are so "small" that they have to do several counties.
In my case, Maricopa county covers a population of 6 + Mio and an area of 9200+ square miles, it takes me two plus hours (with no traffic jam) to go from one end of Maricopa to the other. My understanding is, that a lot of counties, especially in the Midwest or Northeast are much smaller and overlap in Metro areas, i.e. I have friend in the Minneapolis/St. Paul area who covers 4 or 5 counties plus parts of Wisconsin. Same thing with Maryland/Washington D.C areas, and several other states.

I hope this makes sense to you.

I personally, wouldn't call around the yellow pages to find out who is working where. I do almost everything by referral, any roofer, CPA, cleaning crew, loan officer, etc. I work with comes through personal recommendations from people who had good experience with them. Just the way I prefer to do business.

Carola
 
>Carola,
>
>Well, we're looking to go from Cecil County to either Howard
>or Anne Arundel County, which would be right near Ft. Meade
>(where we work).
>
>I'm wondering how you know that agents work in several
>counties? Can you just look up that information? I hate the
>idea of calling a bunch of realtors just to ask them if
>they're able to work in all three of these counties... is
>there a way to just narrow it down to the ones that you KNOW
>work in the counties you're interested in?
>
>Please do let me know... I'm really interested in this. It
>would be much easier to work with the same agent for both
>selling and buying.
>
>

Hi Meg,

Let me make a few phone calls tomorrow and I will get back to you by Tuesday afternoon with a couple of agents that may work. I just want to get the right ones for you, everytime I send out a referral, I want to be able to put my name to it, because if they don't work out, I makes me look pretty bad!

Do you want me to email you that info directly? Or do you want me to post it here?

Carola
 
My DH and I sold our house w/out a realtor last Sept. It took about a month and a half. We used a company called Properties by Owner and included in their prices (for signs, ads in monthly magazine) was advice from atty. The atty really helped by looking over all our docs before we signed. Other than just having to schedule people coming to view your house and wondering why everyone didn't want your house, it was pretty easy. We would do it again. But we did not buy another house right away, we are renting right now, but paid off all our other debt w/the money. So it was easier for us b/c it was just one transaction instead of two.

Good Luck,
Mary
 
I did a FSBO & it was a piece of cake. I don't know why--my mom's been in RE for about 30 years so I had a little knowledge, but all I did was stick a sign in my yard, which happened to be in a way off the beaten path neighborhood, & got asking price w/in 3 weeks. I guess I was just lucky. The key was having a good attny for closing.

If you want to find a good agent go ahead & stick the FSBO sign in your yard. Trust me, they'll be crawling all over you. :) That's how I found my current agent--I met about 20 the first week I had the sign out & when I met my agent I just felt like we clicked--my instincts told me she was trustworthy & would work her butt off for my small potatoes sale.
 

Our Newsletter

Get awesome content delivered straight to your inbox.

Top