4 Most Popular Ways to Sell a House (a Realtor Isn’t Mandatory)
Figuring out the best way to sell a house can be a difficult task. There are many viable options in the market, with new alternatives appearing every year, and it’s hard to figure out which is the best solution for any given situation. For example, should you stick to tradition and sell through a realtor even though it is expensive, or is it best to try a more modern method? And are there any surefire methods out there for people who are trying to sell their homes as fast as possible? No single one of these options is necessarily better than the other. It's best to find a selling method that works best for your situation.
We’re going to go over these and several other questions in this guide. But, first, here are some of the most popular ways to sell a home today.
1 - For Sale by Owner (FSBO)
FSBO is the DIY approach to selling a home. You are in charge of getting the home ready for sale, marketing, showing it to potential buyers, and more. You will also be in charge of handling all of the paperwork involved in a home sale.
It is legal to sell a home without any help at all. However, doing so is not advisable unless you have some experience with the real estate market. If you haven’t, you’ll probably want to have a real estate attorney at least look over the sale paperwork before you file it. Or you can handle 99% of the sale process yourself and let your attorney handle the final paperwork for you and the buyer.
There are numerous advantages of taking the FSBO approach to a home sale. One of them is that this is the method to keep most of the house’s final sale price. All the other methods in this list will either involve selling the home below market price, paying fees to a third party, or both.
Another advantage is that you get to be involved and in control of the sale process. You set the price, you veto potential buyers, you decide how to market the house, and more. Of course, being so involved might not be ideal if you already have a hectic schedule. But if you have some time to spare and aren’t in a hurry to sell. This is often the method preferred by people trying to sell homes with great sentimental value.
There are a growing number of tools and platforms made to help those looking to sell homes by themselves, from sites dedicated only to FSBO listings to apps made to connect home sellers to home buyers. This means that while advertising the house yourself is still difficult, it’s getting easier every year. It also means that taking the FSBO approach won’t necessarily mean you’ll take longer to sell the house — it all depends on where it is located, how you price it, and whether or not you end up getting lucky.
This is also a good approach if you just want to learn more about the real estate market itself. It is hard to calculate in precise terms how much any given piece of knowledge is worth, but getting first-hand experience working as your real estate agent is worth something. Who knows, maybe this experience will help you spot attractive real estate investment opportunities in the future.
2 - Sell to a home buying company
If you have ever tried to sell a house for cash in Chicago, Panama City Beach, Washington, or any other major American city, chances are you have run into home buying companies before. The term is typically used to refer to companies that buy homes as-is, fast, and pay in cash, as with Favor Home Solutions. If you work with an experienced home buying company that offers cash advance options, you may be able to get paid for a house within a week. It’s that fast.
There is a catch, of course. Home buying companies specialize in buying up homes, fixing them, and then selling them for a profit. This means that these companies will typically pay below-market prices. And if you call the wrong company, they might try to push you into accepting ridiculously terrible deals. But there are honest home buying companies out there, and when they operate in good faith, these companies offer a valuable service.
Home buying companies offer a solution for two main problems. The first is speed. If you want to sell a property and get paid as fast as possible, this type of company is typically your best bet. They are the ones you should turn to if you are dealing with a messy divorce and want to liquidate the house quickly, or if you just inherited a home and need to split the house’s value with other people named in the will.
The second problem is convenience. If you want to sell a property with as minimal hassle as possible, these companies will help you out. They’ll buy a home even if it has been flooded, suffered fire damage, has structural problems, isn’t up to code, is late on mortgage payments, and more. Most home buying companies will even handle all of the sale paperwork and related fees for the buyer. So if you want to sell a house without emptying it or making any repairs, this is the best option.
3 - Flat fee real estate agents
It’s easy for an outsider to lump all real estate agents together into a single category, but that’s not really how it works. Instead, different agents and agencies offer other services, and some even specialize in specific types of houses or clients. And one such type of specialized agent is flat fee real estate agents.
A traditional real estate agent will charge you a commission based on the sale value of the price, and they may charge additional fees for their services. Specific values vary from agent to agent, but you’ll typically see as much as 6% of your home’s sale value go directly to your agent.
A flat-free agent operates differently. Instead of paying them a commission based on the house’s sale price, you just have to pay a flat fee to get your home listed in the agency’s catalog. This typically costs much less than you’d have to pay in commissions to a full-fledged agent, and you get to pay ahead of time, meaning that selling the house for a higher price down the line will not lead to you having to pay a higher commission.
The catch is that flat-free agents cost less, but they also offer fewer services. The specifics of what a flat-free agent will and won’t do will vary from agency to agency, but you can expect to have to get the house ready to be shown for potential buyers yourself, and you may not even get help showing the place around. The result is a kind of middle ground between FSBO and working with an agent, where you are not working entirely alone, but you have to be much more involved than you would have been if you hired an agent.
There are other options for affordable realtors as well, with some agencies offering discounted service options. But generally, going with a flat-free agent is the cheapest way to sell with the help of an agent.
4 - Work with a real estate agent
Don’t let all this talk of alternative methods fool you into thinking agents are some kind of scam. An excellent real estate agent can make the sale process much smoother and more accessible while also helping you get a higher final sale price for the house than you would have on your own.
Agents will also typically handle the paperwork involved in selling a house, either by filling it themselves or by working with a law firm they are familiar with. And they are experts at finding minor improvements you can make to help increase the sale value of your house.
These elements mean that if you are not in a rush to sell a house and don’t want a hands-on approach, working with an agent is typically your best option, whether it be a traditional agent or one that works with flat fees.
However, there are two critical downsides of working with an agent that is worth pointing out. The first is that you’re going to want a good agent — an incompetent, irresponsible, or inexperienced agent can quickly derail the entire sales effort and actively drive potential buyers away.
The second downside, of course, is just how expensive an agent can be. Some of that additional cost may indeed be offset by the agent getting a better price for your home, but if you are good at negotiating on your own, there’s no reason why you can’t both get buyers to pay more and avoid paying an agent fee at the same time