Can You Sell Your House Without A Realtor?

Despite recent interest rate hikes cooling the housing market, some people might be ready to sell their homes (or at least start thinking about it). It can be incredibly daunting to start the process and there are a lot of things to consider when and if you decide to sell. One of the things you might find yourself debating is if you really need to go through the hassle of using a Realtor. While there can definitely be benefits to using a professional throughout the process of selling your home, you might be surprised to learn it's not technically necessary or legally required. In fact, as a homeowner, you aren't required to use a real estate agent, broker, or Realtor in the process of selling your home.

As a buyer, you might have seen listings labeled as "for sale by owner" during your house-hunting journey. These transactions are done by sellers who choose not to use an agent during the process of selling their home. According to data from the National Association of Realtors, 7% of 2023 home sales were FSBO transactions, which is actually the lowest share of this transaction type recorded (matching 2021 numbers). Of these FSBO homes, 57% of them went to homebuyers who already knew the sellers. It's also worth mentioning that FSBO homes typically sell for less than the average selling price of other homes. The median agent-assisted home selling price was $405,000 in 2023 compared to the median FSBO price of $310,000.

Why people might avoid Realtors

For starters, you might be wondering what the difference is, if any, between a Realtor and a real estate agent, and the answer is not much. Realtor is the term used for real estate agents who are also members of the National Association of Realtors. However, membership in NAR isn't a necessity or requirement of being a real estate agent. One of the biggest reasons sellers might have considered avoiding the use of a real estate agent in the past comes down to the associated commission fees that were involved. Sellers were generally the ones who paid the combined commission fee to both their selling agent and the buyer's agent. While there were no set commission amounts for agents, most sellers could expect to pay between 5% to 6% of the home's final sale price in commission fees.

However, on March 15, 2024, the National Association of Realtors announced a lawsuit settlement that'll change the way agent commissions are handled going forward. Specifically, commissions for seller's agents and buyer's agents will now be separated, which is anticipated to lower overall agent fees since buyers will now have the ability to directly negotiate the fees they're willing to pay. NAR is also banned from creating rules that might dictate compensation amounts for agents. This is all being done in the hopes that buyer's agents will no longer push potential homebuyers toward more expensive properties in the hopes of receiving a higher commission.

Reasons to use a real estate agent

With significant changes coming to the format of commission fees for involved agents, one of the biggest negatives that home sellers have had in the past with using agents (paying those fees) could end up being less of a concern. Losing one of the biggest benefits of selling your home without an agent might make you think twice about deciding to forgo using an agent. This also makes it more important than ever to understand what, exactly, a real estate professional can help you with as a homeowner when it comes to selling your home.

First off, whether you attempt to sell your home to a cash buyer, use a real estate attorney, or you attempt an FSBO transaction, deciding to sell without an agent requires you to have a lot of personal knowledge of not just the real estate market but also contracts in order to draft selling documents that might protect you from potential problems. Another big factor to consider is the time commitment involved in attempting an FSBO transaction. Deciding to sell without an agent means you will have to personally handle all of the marketing, communications, staging, photography, and any potential showings of the house yourself. It's also important to realize that most homes that don't use an agent tend to sell for less than comparable homes that do utilize agents so if you're looking to ensure the best price for your home, doing a home sale by yourself might not be the best option.