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Should You Sell Your Own House Yourself?


One of the biggest decisions that you'll make - second only to the one to sell your house - is whether or not to contract with a Realtor or sell your own house yourself. There are pros and cons to both sides, and good reasons why you might choose either one. So, should you try to sell your house yourself? Let's take a look at some of the specifics below.

To start with, let's look at some of the reasons why you may choose to sell your house without a Realtor:

  • You haven't owned the house that you're selling for very long. In most cases, owning a home for only a short period means that your equity in the house is low. The lower the equity, the more a Realtor's commission will cut into any profit that you might realize from the sale of the house. If the sale won't net you enough to pay the Realtor's commission, selling without a realtor is your best choice.

  • You have the money up front for advertising and listing costs. Without a realtor, you'll be responsible for advertising your home for sale. These costs will include newspaper ads, printing costs for flyers, listing costs with Internet FSBO web sites and the price of signs to attract buyers. While this typically runs into hundreds of dollars, it's still a great deal less than the commission you'd pay a realtor.

  • You have the time and availability to take calls from prospective buyers and show your house. Plan to be available to take calls regarding your property for sale at all hours, and schedule tours at times that are convenient for prospective buyers - and not necessarily you! A flexible schedule will make it far easier to show your house and get it sold quickly.

Typically, a homeowner who chooses to sell without a realtor will spend between 2% and 3% of the eventual selling price of the house on sales-related expenses.

Now, let's take a look at some of the advantages to using a good Realtor.

  • These benefits can include taking advantage of a Realtor's business and practical knowledge of the industry, and their availability to show your home at the client's convenience.

  • In addition, a Realtor can help you set the right price for your home without you having to do the research and legwork.

  • They can also guide you through the tangle of legalities and paperwork, as well as negotiate with buyers on your behalf.

  • An experienced realtor can help point out needed repairs and spruce-ups that will make your home more attractive to a buyer, and even make re-decoration suggestions that will help to sell your house faster. In return, they take between 6% and 7% of the selling price of your house as a commission.

The advantages of selling your home without a Realtor are obvious. In today's realty market, the Realtor's typical 6-7% commission can amount to a healthy chunk of change. Suppose that you're selling a house valued at $185,000, on which you still owe $135,000. Your expected realized equity will look like this:

185,000
- 135,000
________
$ 50,000

Now deduct the Realtor's commission - typically 6%. Remember, the commission is figured against the selling price, not the equity.

185,000
x      .06
_________
$ 11,100

That comes off your equity:

50,000
- 11,100
________
$38,900

Compared with the costs of selling your house on your own, the savings are a very potent incentive. Even if you include a 2-3% fee for listing your home with an internet listing service, you'll save $5,000-$8,000.

It's important to weigh the issues and decide what's more important to you. You should sell your own house if your goal to make more money from the sale. Otherwise, if your goal is to ease the transaction of selling your house, then engage a realtor may be your answer. Ultimately, your answer will help make this all-important decision. You may want to continue to read Why most For Sale by Owners fail?

(Note: If you plan to look for a realtor, finding a right realtor from your local brand-name brokerages is extremely easy on the Internet now. This online service allows you to compare the backgrounds of different realtors and their commission rates. Best of all, these local real estate agents will even send you a customized proposals for free. Click here to find out more.)


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