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Five Reasons to Sell Your Home Yourself

Jennifer Openshaw

Realtors used to point out: "You won't get anywhere without MLS (multiple listing service)." Then along came the Internet and services like Iggys House, which will list your home on MLS for free, and Zillow, which connects sellers to buyers and pricing information.

Realtors used to argue: "You'll never be able to stage your home properly." Then along came home stagers and specialized firms offering sell-it-yourself assistance.

Realtors used to contend: "You'll never get through the paperwork -- it's too complicated." Maybe. But if you can fill out an income-tax return, you can probably handle this one. And what you'll save easily pays an attorney or escrow officer to help.

And they used to argue: "You won't get as much for your home." But a new Northwestern University study sets that aside.

Does it make sense to go over to the dark side and sell your home yourself in the The Millionaire Zone?

Click here for the video version of this story from Jennifer Openshaw.

These days, I believe it does, and here's why.

• Higher "net" proceeds from your home. These days, you can save a lot more, because home prices have expanded over the years while commissions remain a flat percentage. A 6% commission on a U.S. median $220,000 home is $13,000, and on a more expensive property, the number is obviously larger. These savings generate a lot of dollars for marketing -- or to adjust the price to meet the market.

  The new study, conducted in Madison, Wis., by Northwestern economists, concluded that people selling through agents typically didn't get a higher price, and did not come out ahead financially when agent commissions were factored in.

  And what about the speed of the sale? The Wisconsin study suggests that realtors have a slight advantage overall. But I believe if your sale is straightforward, and in a decent market, you should sell faster. Why? The realtor process is quite complex and structured; you may sell before a realtor even shows it to other realtors.

• You know your home better than anyone else. You have a 1922 shingle Craftsman home. Your realtor markets it as a "brown house" with "lots of wood." OK, that's not inaccurate per se, but you've lost a lot in the translation. As they say, you know your own home better than anyone else, and by experience, you probably know its market better, too.
• Differentiate commodity homes. So you didn't buy a 1922 shingle Craftsman, you bought a standard 4/3 in a new subdivision of 15,000 homes. There are "for sale" signs everywhere. But your "for sale by owner" (FSBO) sign tells buyers they might get a better deal, too, because there's no commission. So go FSBO and compete on price.
• Special services are easy to find. Not too long ago, if you were selling FSBO, you really were on your own. You had to make your own signs. You had to find your own contract forms. I have a friend who used to white out filled-in blanks on standard real estate contracts to reuse them.

  But now, help is widely available. Numerous agencies specialize in helping FSBOs and finding home stagers who can make your place look better than perfect. You'll pay for the service, but not the $30,000 or $40,000 a realtor might get.

• Above all, the Internet. As you know, the Web makes almost anything possible, but searches still aren't as customized as they could be.

  For example, there are no specialized sites to help you sell your 1922 Craftsman. But buyers looking for a Craftsman home in Seattle, for example, can simply Google "Craftsman home for sale Seattle" from anywhere in the country -- from a classified ad, an MLS listing or a FSBO specialist. And you can direct customers to your own Web site or to a picture gallery hosted by Iggys House or many others.

  Finally, you can search prices or find any service you need, from staging to contract review to title services. And it allows you to do a lot of legwork right from your office.

It's important to note, however, that FSBO may not work in all situations:

• Complex transactions. If your home is going to be hard to sell or relies on a very special buyer (like a 15,000 square foot Tuscan mansion on a 100-acre lakefront spread), you might need professional help.
• Quick sale required. A realtor can land that quick sale if they have in-hand buyers, access to relocation buyers, etc. But still, don't count on this just because realtors say so.
• Too many distractions. If you're relocating a large family, changing jobs or you're moving your elders to assisted living, it's probably not the best time to go FSBO.

Still, FSBO seems to fit most situations. According to Iggys House founder Joe Fox, 1.2 million people went FSBO in 2006 -- and about 800,000 of them were successful.

A two-in-three chance at a five-figure savings? I like those odds.