Should I Sell My House on My Own or Through a Real Estate Agent?

It’s easy to understand why you’d consider listing your house as for sale by owner. Even if you’ve never done a real estate deal by yourself before.

A typical real estate commission for selling a house sits between 5.5 and 6% split between the buyer’s and seller’s agents. That means that for a house worth $400,000, the real estate professionals are taking $22,000 to $24,000.

Is doing the work yourself worth saving that type of cash? Or is professional expertise really worth it?

Should I List My House As For Sale By Owner or Sell Through a Real Estate Agent?

What are the pros and cons of selling my own home vs. using a real estate agent?

That’s what a Clark Howard listener recently asked.

Asked Mark in Tennessee: “My question is centered around selling my house on my own versus using a realtor. What do you see as a pro and con of each method?”

We know Clark loves to save money. He also has extensive experience with real estate and has sold homes on his own and through a real estate agent.

If he had to sell a home today, which path would he take?

“Today I would sell with a real estate agent because I have someone I really trust,” Clark says.

“I know her. I know she’s great at the market. And other agents trust her. So there’s real value in the connections that she has.”

Clark values local expertise when it comes to real estate. He wants someone who knows the neighborhood well and also has a lot of experience.

What Do You Need To Effectively Sell Your Own Home?

Want to sell your own house and save on those costly commissions? Run through this checklist first, Clark says. Here’s what you need to conduct a successful “for sale by owner” (FSBO):

• Ability to be objective and unemotional
• Help from critical friends and family
• Potentially hire a staging company
• Hire an inspector before listing
• Commission-protect the buyer-side agent

1. Know Your Personality

You need the right personality to handle a for sale by owner, Clark says. He calls it “a merchant’s mentality.”

When you’re showing the home, prospective buyers will forget you’re the owner and make an occasional critical remark.

“They’ll say, ‘Man, that is the ugliest sofa I have ever seen. That is such an ugly paint color in this bathroom!'” Clark says.

“You’ve got to have that thing where you’re not looking at it with that pride of a homeowner. You’re looking at it as I’m trying to complete a transaction here most efficiently and not be in a position of having to pay a 6% commission.”

2. Get Help From Critical Friends and Family Members

Quick. Think of the people you know who are quickest to gripe or find fault. You’ve finally found a good use for those traits.

“You need to have your family members and friends who are the most critical of everything come over and tell you, ‘You know, that needs a fresh coat of paint. You need new landscaping out front. That’s really ugly from the curb,'” Clark says.

3. Consider Hiring a Staging Company

Staging companies specialize in rearranging your furniture and giving your home the pizzazz that will attract buyers.

“Staging a home pays such dividends because people only buy what they see,” Clark says.

4. Hire a Home Inspector

Pay someone to conduct a professional home inspection.

Let them find things that are broken. Fix them. And keep the receipts to show prospective buyers that you’ve done repairs.

“You want to build trust,” Clark says. “And if you’re doing a for sale by owner, you’re held to a higher level of trust you have to build than a real estate agent who you hire.”

5. Don’t Expect To Save the Full 6%

You don’t need a selling agent if you’re handling it yourself. But if you want to move the house, you probably still need to lock in a 2 to 3% commission for an agent on the buyer’s side.

“Otherwise [agents] will not show your home because there’s no commission for them in showing it,” Clark says. “So you protect a 2%, 3% commission for an agent who brings you a buyer.”

Final Thoughts

If you ditch a real estate agent and sell your own home, you won’t have to pay what’s typically a 6% commission. But you’ll still face costs.

Those costs potentially include paying a staging company, hiring an inspector and making necessary home repairs (which your real estate agent may have you do anyway). You also will still need to offer a commission to the buyer-side agent who brings you the actual buyer.

Clark prefers to use a real estate agent rather than sell on his own. But he says it’s possible to do either option.