We all know what happens when it’s time to sell your house — you tidy things up then hire a realtor to take care of the rest. But not everyone is convinced of the benefits of using a realtor, and some choose to sell their homes themselves.

Selling a home for sale by owner (FSBO) can have some serious advantages. It can save you money that you otherwise would have spent on the realtor, it gives you greater control over the entire process and it can help you streamline everything from beginning to end.

But it’s difficult to know where to start. We help break down everything you need to know about selling your house without a realtor, from the pros and cons to the steps you’ll need to take to complete the process. Keep reading to learn more.

Should you sell your home without a realtor?

The main con of selling a home without a realtor is that you miss out on the professional expertise real estate agents can provide to get you the best value on your home. But if you do it right, there can be so many benefits to FSBO home sales.

You don’t have to do it alone. At Bungalo®, we’re completely transforming the way people buy and sell homes. Our online home marketplace makes the home-selling process simpler and more straightforward, making it easier than ever before to sell your home without a real estate professional.

You can save money

Put simply, if you don’t have to pay for a real estate agent, you’ll save money on your home sale. This is one of the top reasons homeowners choose to sell their homes without an agent, and it can really pay off if you do it right. According to Bankrate, real estate commission typically ranges from 5-6% of the final sales price of the home, and that can really add up if your home sells for a lot.

If you sell a home for $200,000 using a real estate agent that charges 5% commission, you will end up paying the realtor $10,000. That’s a hefty chunk of cash!

You have more control

Another great benefit to selling your home FSBO is that you’re in complete control of the entire process. That means you get to market it how you want at the price you want, and you’re in charge of negotiating with potential buyers. For those who know their stuff, that can be a real advantage. There won’t be any conflicting opinions between different stakeholders, and you ultimately get the comfort of knowing that the sale was completely yours.

It saves you time

One of the great benefits of FSBO home sales is that the entire process tends to be much faster than going through a realtor. That’s partly because real estate agents usually have a large portfolio consisting of numerous buyers and sellers, so their attention is split across different individuals. When you do it yourself, you can devote as much time as you want to the process, meaning it’s all streamlined, and you can get in front of buyers much faster. Data from the National Association of Realtors showed that 58% of FSBO homes sold in under 2 weeks in 2019.

Another reason that the process is so much more efficient is that homesellers tend to rely on people they already know. They don’t have to spend time building trust and rapport with potential buyers as one would when selling to someone they don’t know, and that can shave off several weeks from the whole process.

What do you need to know about selling a home?

If you’re ready to sell your home, and you’re convinced FSBO is the way to go, it’s tempting to start taking pictures and posting them to your favorite listing site. But before you do that, you need to have a few key documents together before you can formally sell the property. Others, you’ll need to show potential buyers before you even make the sale.

Here are some of the most common:

• Seller’s disclosure form: This one’s important. This is where you list and detail all the potential problems with the house, so the prospective buyer knows exactly what they’re getting. It helps protect the buyer from purchasing anything with unknown problems, but it can also protect you from lawsuits down the road.

• Loan documents: These detail all mortgage information on your home, including first and second mortgages as well as any additional lines of credit you took out on your home’s equity. These are important because they show potential buyers how much interest other parties have in the property.

• Latest bill statements: No one likes paying bills. And they especially don’t like paying expensive ones. Potential buyers will expect to see your most recent utilities bills, including electricity, gas and water, to get a sense for how much they’ll need to pay every month. Property tax statements should also be included here.

• Plans and permits: If you made any changes to your property that required you to get a permit from your local or state building authorities, you’ll need to have these documents handy. Permits prove that all improvements made were safe and compliant, and this can save new owners headaches down the road.

• Sales contract: You’ll need this one to formally close the house sale and prove that it actually happened the way you and the buyer agreed. This is a legal document that shows the amount you and the buyer agreed upon, the date of the real estate transaction, and, of course, confirmation that you handed over the deed — and ownership — of the home.

• Deed: Your home’s deed is the document that shows who owns the home. Requirements vary by state, but deeds typically contain detailed information about the property, and always show who currently owns and who used to own it. The deed goes into the public record, so it’s a crucial part of the home-selling process. Deeds often get confused with the title, which refers to the legal right of an individual to own a piece of property.

• Inspection report: Make sure everything in your home is inspected from top to bottom so that buyers feel comfortable knowing their home won’t come with any nasty surprises. Every home on Bungalo’s website is certified to the highest standards. In fact, we’re so confident in the homes we list on our website, we’ll cover any issues that arise for 90 days after your close.

Of course, these are far from the only ones you’ll need. Others include:

• Personal identification information
• Homeowners insurance records
• Title reports
• Property survey
• Homeowners’ association documents

How will you deal with potential buyers?

When dealing with potential buyers, the biggest headaches are going to come from negotiating the sale price of your home. Prepare to hold your own, but also be ready to be flexible — it’s a tough balance to strike, but we trust you! These are some of the things you should know when dealing with potential buyers:

The factors that affect the sale price of your home

You might think that the most important factor when it comes to selling (and pricing) your property is how lovely your home looks inside and out. While that’s certainly a key part of it, there are several others, too.

• Comps: Your buyers are going to have their eye on all the most recent transactions of homes similar to yours in the neighborhood. It’s important for you to know this information too, because your home’s value is going to be highly dependent on these selling prices.

• Location: You know what they say, so we won’t repeat it. (OK — location, location, location!) But seriously, where your home is located matters. A lot. And that’s going to have a serious effect on its market value. If it’s near some good schools, quality entertainment and places of employment, you can ask for a lot more.

• Size: Size doesn’t always matter, but in this case it does. Simply put, the bigger the home the more you can do with it, so buyers are willing to pay more for that extra square footage. If your house is on the bigger end, expect its value to go up.

• Upgrades: What also matters is how much work you’ve put into it yourself. If you’ve added a swimming pool, built a patio or finished your basement, give yourself a pat on the back. You’ve made your home that much more valuable, which means you can up the selling price.

Can you sell your home for less than market value?

Of course! You can sell your home for whatever price you and your buyer agree to, and that could be more or less than its market value. It might sound ridiculous, but sometimes selling your home for less than market value is the right move. Maybe you’re looking to make a quick move and are willing to fork over a few extra thousand to get out faster. A lower price will attract more buyers, especially those looking to get the most bang for their buck.

Sometimes you have no choice. Maybe the housing market’s really bad, and you just know you’re never going to get anyone to pay what you initially paid for it. The best strategy here is to wait a few years and put your home back on the market when housing prices are back up. If you can’t wait, then it might make more sense to sell it now and stomach the losses.

Whatever your reason, it’s important to keep in mind that you still owe your mortgage provider any liens still attached to the house. A lien is the amount of interest a mortgage provider has in your home, which is determined by the amount you still owe on the original loan. Selling your home below its market value can make it harder for you to cover any liens (and might force you to look elsewhere for finances), so make sure this is definitely the right move for you first.

What will the sales process look like?

OK, you’ve weighed the pros and cons and decided that an FSBO home sale is the move for you. Great. Now what? Follow these steps to know exactly what you need to do once you’re ready to put your house on the real estate market.

1. Prepare your home: You’re trying to impress potential buyers on the value of your home, so make sure you’re presenting your home in its best state. That means decluttering every room from top to bottom, making any necessary repairs, and doing any upkeep landscaping or painting to boost its curb appeal.

2. Set your asking price: This will require some due diligence on your part. Do some research into the market and figure out what other sellers are listing similar homes for. There are a few websites and platforms out there that can help you. Something to keep in mind: Don’t try to oversell your home. The longer your home spends on the market the less likely you are to get your asking price, so keep it reasonable.

3. Market your home: Then it’s time to take your home to the buyers. Capture as many high-quality photos as you can and find a trusted online listing site that gets a lot of good traffic to post your home. But not all listing sites are the same. Bungalo’s platform lets you do everything online, from browsing to touring to closing, helping you cut out the middleman entirely.

4. Negotiate: This is probably the most difficult part of the entire process, so it might be useful to brush up on some good negotiation tactics before you get down to business. You may want the potential buyer to make the first offer, which could pay off if it’s even better than what you would’ve offered. You might also consider encouraging a bidding war between multiple buyers. That could raise the final sales price much higher than you ever anticipated.

5. Close: Once you’ve reached a verbal agreement with a buyer, give yourself a pat on the back for a job well done. But the sale doesn’t end there. You still need to handle a series of important legal documents to actually finalize the house sale. These include your closing disclosure, the deed to the house, statement of closing costs and certificate of title.

It can seem like you don’t have the skills or the knowledge it takes to sell your home FSBO. That stuff’s for realtors. But with the right preparation and planning, you can reap all the benefits that come with selling your home without a real estate agent. Just know what documents you need to have on hand, understand what factors affect your home’s selling price, and get a feel for the sales process, and you’ll be selling your home like a pro in no time.

Bungalo can be by your side in all this. We help make the process hassle-free by letting you sell your house without the repairs, tours, and showings that usually come with selling a home. Check out our blog for our latest home-selling insights, and take a look at our website to get started.

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Bungalo always encourages you to reach out to an advisor regarding your own situation.