It is possible for a person to sell their home without the assistance of a real estate agent. However, a person should keep in mind that it may take more time, energy and expense to do it on their own.
A person would not have access to the resources that a licensed real estate agent brings to the task, such as knowledge of all the state laws that apply to the sale of residential real estate, such as disclosure requirements. Also, an experienced real estate agent has access to marketing outlets that expose one’s home on the internet to a wide network of potential buyers.
First, a person should check with their state’s department of real estate to find out what legal requirements a person must fulfill when selling their home. A person must know who is supposed to sign which contracts and other documents, who has permission to go through with the actual transaction, and what possible solutions are available when obstacles or conflicts come up during the transfer of ownership.
A person will also have to acquire an education in the basic details of selling a house when they do it on their own. They would need to master such subjects as what a reasonable asking price is, how one negotiates the price, and how to close the transaction. A person must know how to advertise for potential buyers, though this process is becoming easier with the expansion of the Internet. There are now some websites dedicated solely to networking sellers and buyers for owners who are selling their houses themselves.
Still, a licensed agent’s full-time job is to market the homes of the sellers they represent. A person who is doing this themselves needs to be available to take phone calls from the agents of prospective buyers and buyers working without agents. They must arrange to show the house, meet with agents and buyers for showings, and then be available to accept and review offers and decide which one to accept without any advice from a seasoned professional.
The closing of a real property sales transaction presents special challenges. The closing is the final event in a real property sales transaction. It requires days, if not weeks, of preparation. If the buyer is financing their purchase of the house with a mortgage loan, the loan must conclude on the day of the closing and money must change hands.
This means that the buyer’s cash down payment must be deposited in the seller’s bank account. The proceeds of their loan must also be transferred from the lender to the buyer’s account. This means that all of the loan documentation must be completed.
In addition, a title search has to be done by either a title company, a real estate attorney or possibly an escrow officer. Usually a real estate agent has companies and attorneys with whom they have worked on multiple transactions and getting the title search done is a routine matter.
An owner has probably never arranged this before and would be doing it for the first time. In addition to a title search, title insurance is a standard element of most transactions today and it must be arranged as well. In addition, the mortgage lender may require that the borrower have mortgage insurance, yet another detail to which the parties must attend.
Of course, things can go wrong and often do. Again, an experienced real estate agent has encountered the things that can go wrong before. That is part of what a person pays for when they pay the commission to their real estate agent, their experience with problems and solving them quickly when they arise. A person selling their own house just does not have this experience, especially experience with problems that arise at the last minute and can threaten to derail a closing.
Having an experienced real estate attorney could be helpful to the owner selling on their own. Many contracts are involved in a real estate transaction, for example, mortgage loan agreements, mortgage insurance contracts, homeowner’s insurance contracts, and the home sale contract itself.
In addition, an owner can expect to hire a number of professionals in the course of selling a home, contractors who may make various repairs and updates to prepare the home for the market, inspectors to make sure all defects are identified and remedied, a company to handle the title search and set up the escrow account and more. An attorney who can become familiar with the transaction and draft or review all the contracts could be an invaluable partner.
On the plus side, there is ample information about the real estate market and real estate sales transactions available online and in the public library as well. If a person has the time and inclination to do the research, they can equip themselves with the knowledge they need to handle the tasks involved in selling a piece of real property. It is difficult to find the benefit of experience, however.
While owners who represent themselves in selling their home may save the commission they would have to pay an agent, it may cost them in time and stress. They may want to think about whether money paid to an agent would be money well spent.
