My experience trying to sell my home without a real estate agent to save 3% in commission. I assumed I was going to have to pay 3% to the buying agent anyway so I wanted to keep my costs low. I would have to also buy any additional paperwork and hire a real estate lawyer to look over the documents. This post will detail my journey and how I ended up paying 3.24% in commission to sell my home.
First off, I sincerely believe real estate is a scam. Why would an agent get paid 10x more for selling a $1,000,000 house than a $100,000 house? The amount of work on their side is exactly the same. Real estate lobbies “donate” a lot to politicians to keep buying/selling homes incredibly difficult rather than making it easier for consumers.
During the 2008 housing crisis, bankers AND real estate agents were both pushing expensive homes on people with the idea of just paying off interest since the home value would just go up. This caused the U.S. economy to eventually crash. No one went to jail and the government bailed out the banks. When the same thing in Iceland happened, bankers went to jail. The difference is that you can “pay” for freedom in the U.S. if you have enough money.
I was looking for a home in 2008 and almost got talked into buying a house I didn’t like and that I couldn’t afford. After awhile I quickly realized that the real estate agent I had was incompetent and decided not to buy a house. After much research, I realized it’s super easy to become a real estate agent. Okay, that’s it for my crazy rant. Let’s get to the main topic.
How To Sell Your Home Without A Realtor
If you want to sell your home without an official real estate agent, there’s a right way and a wrong way. It was my first time trying to sell my home and I picked the wrong way.
My home selling journey began by using ForSaleByOwner.com to list my home. They had a 14-day free trial and they listed your place on Redfin and in the MLS.
I started by cleaning up my home and taking decent pictures. My home was still partially furnished and I definitely wasn’t going to move everything out just to take pictures. That’s why they were “decent” pictures. There was definitely room for improvement. Then I created a subdomain site for my home: https://7905.blorg.org/2018/09/24/for-sale-by-owner-7905-agnes-ave-8/
After taking pictures, I edited the pictures to include my home’s features. It also included my email address and website information.
I also created a Facebook page for my property being sold since it was another strategy to target potential buyers especially locally. This was not successful but I didn’t pay to promote the page.
The Process Of Selling Your Home Without A Realtor
If you’ve Google’d “How To Sell Your Home Without A Realtor” I hope you came to this page instead of the other results. Most of the top results DO NOT explain the full process of selling your home. It’s clickbait with no decent content. Let me summarize what they’ll tell you:
- Price Your Home To Sell (Obviously)
- Obtain A Flat Fee Listing on MLS (I skipped this part)
- Market Your Property
- Hold An Open House
- Know Your Property’s Selling Points
- Prepare To Show Your House (Filler Content)
- Show Your House (Filler content)
- Perform Your Own Negotiations
- Comply With Laws In Your Area (Don’t break the law!)
I found all of these points obvious and not very helpful. How do I tell Google that the top results are absolute garbage?
This is what you need to know:
- Research similar properties in your area and come up with a fair selling price that would make you happy even if you went below that price (since you might be low-balled during negotiations).
- Obtain A Flat Fee Listing on MLS otherwise you’ll be spammed to hell from other real estate agents.
- List your property on all real estate sites.
- Create A Google Calendar with your available showing times or open house. Allow potential visitors to sign up during designated hours and ask them to confirm on the day of.
- Have potential buyers submit official offers along with a copy of their loan approval letter to make sure their qualified.
- Have a real estate lawyer go over the offer and prepare all required documents prior going to escrow (additional costs).
- Hire an escrow service.
I didn’t go through my own list. The costs with legal documents from ForSaleByOwner.com and hiring a real estate lawyer was going to add up in costs. Lots of people did not want to help me for free and insisted on a commission. I was struggling with this option and started researching my options…and I’m glad I did!
Using ForSaleByOwner.com To Sell My Home
My listing on ForSaleByOwner.com was ready to go live. I didn’t see any photo compression limits on the ForSaleByOwner site but noticed not many people were going over 300kb per photo. So I kept my file sizes to that limit.
The next day, I checked out Redfin to see if I could find my listing. I found my listing but it had the WORST images! My pictures were compressed down to 30kb and everything looked so pixelated that you couldn’t even tell what the place looked like. First, I thought maybe I made a mistake. I looked at the files I uploaded and they were at 300kb. Then I took another look at the photos to find the ForSaleByOwner.com added a watermark to my photos and they were the cause of the poor photo compression.
Of course I contacted support about the issue and they got back to me a few days later saying it was my fault. I canceled the service immediately and went in a different direction.
Using Propy To Sell My Home…On The Blockchain!
I’m a big believer in blockchain technology. Transparency in transactions and higher security. Sounds good to me. I found out about a site that does real estate transactions on the blockchain so I researched it and thought it was going to work…until it didn’t.
Propy is still very beta and what it really does is list homes for sale. The promotional video leads you to believe that they manage home sales and transfers of property but it does not. It took a week to find this out.
The website wasn’t clear on all the details on how to sell a home on Propy so I contacted support. They gave me a brief overview of the process and said they’d get back to me in a few days with additional documents to help me with the process. No documents arrived. They then redirected me to a Propy Real Estate Agent who would be able to answer any questions I had.
My first question was what it Propy’s role in selling a home? Basically they’re a listing service at the moment, just like Zillow or Redfin. The Propy agent told me that they can’t actually do a home sell completely on the blockchain yet because of the intricacies of real estate law that happens to be different from state to state and from country to country.
The Propy agent did offer to help me with the paperwork to sell my home for a 1% fee. That’s a lot for someone who would just be doing paperwork. She was located in San Francisco and would not be helping me locally. I declined this offer because I already knew of 1% home selling sources that included more services.
Using Zillow To Sell My Home
You can list your home as “For Sale By Owner” for free on Zillow. Most other platforms will charge you or you have to go through an agent. I listed my home on Zillow and after a week I noticed the listing had not gone live yet. To resolve this, I contacted support and after a day they were able to approve the listing.
The reason it wasn’t approved was that they weren’t sure if a real person was listing the home. I guess they have a lot of scams on their side and not enough secure resources.
The next morning…I’m bombarded with telephone calls. I don’t answer my phone at all. It’s all real estate agents that want to be the selling agent for that easy commission. For the next few days I was getting 40+ calls for real estate agents. I had to change my voicemail to inform realtors to email me instead. Very few of them actually emailed me.
Real Estate Agents Use The Classic Scam Pitch
The classic scam pitch is to try and get on your target’s side. You first start by trying to befriend you or empathizing with your pains and struggles then present the easy solution. I did a lot of research on how to sell my home and how to be a real estate agent. There were a few YouTube videos that went into great detail on using psychological tactics to convert people from For Sale By Owner to list with a realtor. I absolutely wasn’t falling for any of this. It just made me angry cause they ALL had the classic scam pitch.
Some of the messages were clearly lies. One realtor called me up and said that they knew the neighborhood really well and sold a home on Gladyshade. There’s no street named that in the area. The is a nearby street named Shadyglade. If you knew the area well, you would actually know that.
Another person called and said they were doing a survey. I happened to answer the phone. He asked where I was moving to next and then said he was a realtor and could sell my place in the next 14 days.
Why are realtors so desperate to make a sale? Because it’s incredibly easy money for them.
Zillow/Redfin/Home Listing Sites Are Scams
After listing with Purplebricks, I realized that real estate sites are scams. When I searched for my home on Zillow and Redfin, they don’t even show my listing agent as the top result. They make it look like another agent is representing the property.
Why? Because if you’re a potential buyer without an agent, you’re going to call a realtor that you believe is the selling agent, but is in fact just a realtor who will now represent the potential buyer to take that commission. It sounds a little confusing, but what they’re doing is adding themselves to the transaction.
How? Realtors can pay Zillow and other real estate sites to be one of the top realtors listed. That’s how these sites really make their money.
Don’t Be Fooled By The Wrong MLS Website
It sucks, but you can’t get on the MLS (multi-listing service) for free. You have to pay a licensed real estate agent a few hundred bucks just to get on.
TheMLS.com is the real Multi-Listing Service website used by real estate agents throughout the United States.
MLS.com is the FAKE website that tricks potential buyers into using their real estate agents. Of course if you’re a realtor and want to get on this list, it comes at a price.
I Gave Up Trying To Sell as “For Sale By Owner”
After a week of ignoring a massive amount of real estate agent calls, I became very fed up with the process. I had only 1 potential buyer come by to check out my home (with a real estate agent).
At this point I thought it was too late to pay for an agent to list my home under their name so I could get on the MLS and avoid any more realtor calls. So I started looking into flat rate real estate services.
Faira’s “Free” Listing Service and 1% Service
After some Googling, I found Faira. A slightly shady practice. They several tiers of service and they market their “Free” service as being free, but there’s a 0.5% fee upon the closing of your home’s sale. I don’t like that.
Faira’s next tier of service takes a 1% flat rate commission and they take care of most of the home sale. They’ll have an agent with you throughout the process. As I was trying to find out more information, I was only able to talk to a support person from Faira and not a realtor.
Purple bricks cost: $3600 Flat Rate Service
Then I went to Purplebricks. I wanted to know more about the service and they scheduled a call with me and a local real estate agent. Over the phone the realtor explained that Purplebricks has a flat rate fee of $3600. That could be paid up front or at the end of the home sale. Once you sign on with Purplebricks, you have to pay that fee within 6 months even if you don’t sell your home. That does mean they would support you with your home sale for that duration of time.
I immediately signed up with Purplebricks when they told me they could bring down the buying agent’s commission down to 2% instead of the standard 3%! This was big! My home sold for 290k and since the fee for Purplebricks was $3600, that makes their commission 1.24%. Paying a grand total of 3.24% in real estate commission instead of the standard 6%.
Best Value: Faira vs Purplebricks
Obviously 1% through Faira is lower than 1.24% from Purplebricks for my specific situation. Although, Faira didn’t tell me that we could bring the buying agent’s commission down to 2%. That means I would have paid 4% total with Faira while paying only 3.24% with Purplebricks! That is the best value for my specific situation.
If I did everything on my own, paid a real estate lawyer and wrangled my own legal documents, I would have ended up paying about the same amount.
You can bring the agent’s commission down to 2% in hire priced markets. There are modern real estate services that charge 1% or around that so you can cut your commission cost in half!
Buying a house? If you go without an agent you can ask for 2-3% off the price since the seller would have paid that in commission!