Welcome to “Ask Stacy,” a short video feature answering money questions submitted by readers and viewers. You can learn how to send in a question of your own below.
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Today’s question is about selling your house without the aid of a real estate agent. You could save monster money: The cost of selling a home is typically 6 percent, or $18,000 for a $300,000 home. But is this a place to go it alone? Here’s what I think.
For more information on this topic, check out “How to Price Your Home So It Sells for Top Dollar” and “How to Save Thousands When Selling Your Home.” You can also go to the search at the top of this page, put in the words “real estate” and find dozens of articles covering everything you could possibly want to know.
Don’t want to watch? Here’s the video transcript
Stacy Johnson: OK, here we go with your money Q&A question of the day. I’m your host, Stacy Johnson, and this segment is brought to you by MoneyTalksNews.com, your source for the best of personal finance news and advice since 1991. Ready for today’s question? Here it is.
This comes from Dennis. Dennis says, “I’m getting ready to sell my home of 45 years this spring to move to a smaller one near my daughter. I’ve always thought I would try to sell my home myself. I’m a retired technical writer and I feel I could put together a very good sales brochure for the property. What do you think of this idea, and how would you approach it?”
Well, I’ll tell you one thing, Dennis: I applaud your initiative. Because if there’s one thing I hate, it’s paying a bunch of commissions to a real estate agent. And I’ve done it lots of time. You’re selling a $300,000 house and you’re paying $18,000 in commission. I think it’s ridiculous, and I encourage you and anyone else out there to try to sell your own house.
I have not done this personally, but I’ve read a lot about it. And the reason why I haven’t done it myself is because I’m really, really busy, and this takes time. But I’ll guarantee you, when I retire, if I sell another house I will definitely sell it myself.
OK, let’s talk about three different things you want to know.
First of all, the hotter the market, the more I would encourage you to try to sell that house yourself, Dennis. You read about some areas where people are driving up and down the street, making offers to everything that moves. If you’re in a hot market, like Seattle or San Francisco, I’d be more likely to try to sell it myself then, because it’s easier to sell. It’s just that simple.
Two, remember that when you do sell it yourself, you’re probably going to be paying the buyer’s agent. Remember the way a real estate transaction works: 6 percent is a common commission, although you can theoretically negotiate it. But let’s say 6 percent is your average commission for real estate. The seller’s paying that 6 percent, and they’re splitting with the agent who brought the buyer. So even if you’re representing yourself by selling your own house, you’re still going to want to encourage those buyer’s agents to come and visit you. So you’re going to have to give them 3 percent. You’re not probably going to save the whole 6 percent. It’s going to be pretty hard for you to find that buyer without dealing with a real estate agent. And if you do deal with a real estate agent, you’re probably going to have to pay them. So, consider that, as well.
And finally, the third thing: There’s a ton of information out there about it, and there are also companies that specialize in it. They’ll put your house in the multiple listing service, which is very valuable if you want it to be discovered by buyers, for like $500. They’ll help you prepare everything you need.
I really think that there’s a lot of ways to save money on selling a house, and Dennis, I encourage you and everyone else to try it sometime.
OK, that’s our answer for today. I want you guys to have a super profitable day, and I’m going to see you right here next time!
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The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.
I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.
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