Selling a home without Agent

June 8, 2005 6:24 PM

I am trying to sell my very inexpensive condo. What is required for me to do sell it without an agent?

Going price for my 1 bedroom condo is around $59000. There are 4 same type of units are on sale from same condo for many month... (According to Realtor.com)

Since I bought this for $50000 six years ago and I've already moved out to new place, I want to sell this place asap. (was not a good investment)

Since current sales units agents don't seem to sell this places, I thought may be I can save on commision by selling it myself. (ads, websites, etc..)

What is required for me to sell a condo like this? I need exact steps etc. Do I just wait for a check from a buyer and payoff my loan and give him/her keys and condo manual? Do I need to draft a serious contract or receipt? I really have NO idea on these type of transaction.

Any suggestions or detailed "how to" will be helpful.
Also IS MY IDEA GOOD IDEA in first place. Should I just save my time and frustration by turning it over to an agent? What would be the fees out of my pocket?

Since I have moved to another new condo, this old place has been draining my money. I really need some good advice. I would rather sell it now instead of renting out because of other debts I need to pay now.

posted by curiousleo to Home & Garden (17 answers total)

Get a lawyer to handle the sale. The lawyer probably can give you a form sale agreement, the contract you sign agreeing to sell prior to the actual sale. the lawyer can also give you a bit of advice about any liabilities, requirements for disclosure, etc. Since you will probably use a lawyer anyway, the extra things here will likely add a minimal if anything cost to the transaction. The lawyer will in any event likely charge you less than the standard real estate broker's fee (7.5% or so). The other part that the broker handles of advertising, showing, etc. you already know how to do, if perhaps not as professionally but probably just as effectively in the end as the broker.
posted by caddis at 6:42 PM on June 8, 2005

See if your local library has The For Sale By Owner Kit. I just sold my townhome, and this book was very helpful in walking me through the steps and letting me know what was required.

By the way, all I did for advertising was post on Craigslist. I had competing offers on the third day after posting it.
posted by agropyron at 6:49 PM on June 8, 2005

One of the biggest problems (normally) in selling a house is setting the right price. You know what the ceiling is (the condos that haven't sold). If other condos have sold in the last six months or so, you can use that information (which is publicly available; I suggest you let us know what your zip code is, since typically this information is city or county-specific) to both set a price and demonstrate to potential buyers that the price is in fact fair.

The typically real estate commission is five to six percent (as mentioned in the link provided by agropyron), paid by the seller. If the buyer has an agent, you may well have to pay him/her half of that (e.g., 3%). And you may have to negotiate with the buyer on how to split the savings from your not having an agent on your side (less, of course, any costs such as for a lawyer to do minimal paperwork).

Keep in mind that there are millions of homes sold every year. This is not rocket science, despite what some might want you to believe.
posted by WestCoaster at 7:48 PM on June 8, 2005

Response by poster: Thanks for the replies.
So if I use agent, I would be paying out around $4000 or so. Would the agent take care of ALL the paper work and etc. ? If I do use an agent, I would rather not be involved in any part of the property or sales except signing papers. I am not lazy, but I really don't want to deal with this at all if I can help it.

The For Sale By Owner Kit seems promising though.

I would probably found out when I get the book, but how should I go about getting a lawyer for this. Is this kind of thing covered by standard law practice? How much would it cost?

The condo is very cheap and it is all in good condition (repaired and cleaned) I want to spend least amount of my time and energy for this.
posted by curiousleo at 8:17 PM on June 8, 2005

There are real estate agents who specialize in this. I was quoted around $1500 to review the offers, and review the sale documents. The guy charged $250 an hour, and recommended that I go with several hours. I ended up doing it on my own.

The people who bought my townhome did have a buyer's agent, and he is doing a lot of the paperwork for us, and arranging things, so that's nice. I negotiated the fee down... it helped that I had competing offers.

If you do list with an agent, yes, they will take care of everything. You just sign what they tell you to sign, if that's all the involvement you want. Or you can get more involved in the negotiations and so on.
posted by agropyron at 9:06 PM on June 8, 2005

There are real estate agents who specialize in this. I was quoted around $1500 to review the offers, and review the sale documents.

SORRY, I meant "There are lawyers who specialize in this."

Although there are also agents who will agree to just handle all of the paperwork for a 1% or 2% commission, if you handle the showings, listings, and sale.
posted by agropyron at 9:07 PM on June 8, 2005

The advantage of hiring an agent to sell your condo is that agents form a network that increases market exposure exponentially. All agents in your area would know about your condo via the MLS and, given the selling agent's (the agent working with the buyer) commission, they would be motivated to move (sell) your property. Without hiring an agent, you would still need to offer compensation to selling agents (aprox. $15k not $4k), however, your not being on the MLS, and your being a FSBO ("Fizbo") raises red flags for agents. If they have comparable properties to show their customers, they'll ignore yours. ...while agents are groomed by the system, owners and attorneys might quirks that waste time, and lead to trouble.

The people who are really making money in the FSBO game are the unsuccessful real estate agents who have started the cottage industry teaching it. ...cousins of the unsuccessful real estate investors who are making a fortune giving seminars on get rich quick schemes in real estate investment.

As a real estate broker who currently does leasing and will soon move to sales in addition, it's my view that the legal and economic risks and complexities of real estate transactions warrant professionalization. And note that the prices of real estate reflect the cost of transactions (broker's fees) just as they relect changes in interest rates. If agents were all to resign, prices would go down, litigation would go up, and our GDP would suffer as learning the basics of real estate by every Ted and Alice would put a drag on general production (kidding).
posted by Como Gomez at 9:38 PM on June 8, 2005

Best answer: Just a suggestion: I sold a very cheap condo in 1998 by sending a letter to the other owners in the townhouse (15 other owners) telling them I was selling. One of them offered me exactly the value of the condo within a couple days. If some of the other condos in the complex are renting their units out, they may be very happy about buying your place. I definitely didn't go through an agent, but I believe I hired an attorney to make it all official. It was incredibly easy.
posted by bendy at 10:26 PM on June 8, 2005

Response by poster: wow.. very interesting advices...
$4k came from around 7% from my sales price of $59k... Do you mean they are going to charge me $15k for selling $59k condo. This means I will actually loose out big time. because my original buying price was $50k 6 years ago.

Can someone clearify?

Also. after reading the forum, I have another question.
What happens if buyer's agent and my agent gets together and make a sell. Is that mean I have to pay both 7.5% each?

Also what happens if after I hire an agent and some how my ad or web site or my effort finds a buyer? do I still pay agent's fee?

Should I consider using same agent as other condo sellers? Hmm may be that is not a good idea, since the agent will likely try to sell the previous unit since they are all same in price and size...
posted by curiousleo at 10:29 PM on June 8, 2005

Response by poster: Bendy,
Great idea... Do you have any idea what the lawyer's fee were?
posted by curiousleo at 10:42 PM on June 8, 2005

The price was 59k? Ok, then the selling agent's commission
would be around $2000. As a San Franciscan, I think my eyes refused to see 59k as anything other than 590k, which is rock bottom for anything in SF.
posted by Como Gomez at 12:38 AM on June 9, 2005

Response by poster: ha ha... o.k. now it is more reasonable...
$2000 may be worthwhile to get an agent.

does any other out-of-pocket cost involved on selling?

anyone?
posted by curiousleo at 1:57 AM on June 9, 2005

I'd get an agent in this situation. If the sales commission is 5% of the $59K sale price the way it was when I bought my condo, the realtor commission will be $2950. You will have to pay out half of that to the buyer's realtor, which means going without a realtor saves you only $1475. And you could easily do yourself out of at least that much through lack of experience, plus there will be the hassle of doing everything yourself.
posted by orange swan at 5:27 AM on June 9, 2005

Nolo Press (self-help legal publisher) has a FSBO in California book, but your profile is missing information so I don't know where you live.
posted by matildaben at 8:18 AM on June 9, 2005

Something to add is that a real estate agent provides marketing and salespersonship for your property in addition to managing the paperwork, while attorneys only do the paperwork. The marketing and sales skills of an agent should not be viewed as trivial as these are essential to selling the property at the best price in the shortest time. Good marketing presents your property in its best light to the segment of people who are looking for something like it...this is needed for the best price. Good salespersonship makes rightly suspicious buyers feel confident in paying the top price.
posted by Como Gomez at 10:09 AM on June 9, 2005

Hire a broker/agent. Don't hire the agent who has the others listed, they are obviously not any good as selling the condos.

Condos are a hard sell, especially if the complex is emptying out for some reason. Doing it yourself will take between 40 and 160 hours of your own time, minimum. Do the math and see if it's just cheaper to pay someone else to work those hours.

You can negotiate rates with realtors if you're the one who brings in the buyer. For example, let's say your broker's fee is 6% and s/he is supposed to show, list, publish and advertise for that fee. You put something on Craig's list that brings in a buy before any out of pocket expenses have been incurred, but you still want the realtor to handle doing the showings, paperwork and whatnot. You can probably negotiate down to half of your original percentage fee. But, make sure you do these negotiations up front. In other words, have it built into your contract and have it signed by everyone. That said, I've never had any realtor suggest a fee higher than 3% to buy or sell. YMMV
posted by dejah420 at 10:59 AM on June 9, 2005

Best answer: curiousleo: Hey! My first best answer! Sorry, I don't remember the cost of the lawyer, but I remember it being a straightforward transaction. The condo was around $16K, so I'm sure I didn't spend more than $1000 on a lawyer, if I hired one at all. Your mortgage company will be able to tell you exactly what they need from you, and your local (city?) office can tell you what's required to transfer the deed.

A person who owns property in the complex will already have a good idea of the condition of the building, and may not even hire an inspector which can really simplify the tranasaction. You can also probably get some general advice by browsing the real estate section of your local big-chain book store and reading the relevant sections of FSBO books.
posted by bendy at 11:28 AM on June 9, 2005