8 Pros and Cons Of Selling a House Privately

Are you thinking of selling your house? If so, you’re probably wondering how to sell a house. Many homeowners automatically go to real estate agents but there’s another option growing in popularity in the housing market: selling your own house by yourself. This is often referred to as For Sale By Owner (FSBO) and can be a good option for smart homeowners. But like any big decision involving your most valuable asset, it also comes with problems. In this guide, we’ll go through the pros and cons of selling a house privately so you can decide if it’s right for you and your situation and financial goals. We’ll also look at some other best ways to sell your house if selling privately isn’t right for you. So let’s dive in! 

What You Need to Know About Selling Your House Privately

Before we get into the pros and cons let’s define what we mean by selling a house privately. By this, we mean you, the homeowner, take on the full responsibility of selling your property without a real estate agent. This means you’ll be in charge of everything from setting the price to marketing your home to showing it to buyers to negotiating offers to navigating the whole real estate process. This section is about selling your home yourself.

Selling privately isn’t new but it’s gained popularity in recent years partly due to the rise of online platforms that allow homeowners to market their property directly to buyers. However, it’s important to understand that these platforms are just tools and don’t replace the knowledge and experience that comes with years in the real estate business.

You can also sell privately directly to a cash home-buying company like Cream City Home Buyers. Here at Cream City Home Buyers we buy houses in Brookfield, Shorewood, and all over the Milwaukee area and can help you avoid the headaches and problems of the FSBO process. If you’d like to sell your house on your own but don’t know where to start we’d be happy to help and share more information about how it works to sell directly to us. 

No Real Estate Agents

The biggest difference when selling privately is that there are no real estate agents. While this can save you money on commissions it also means you’ll have to do everything yourself. This includes tasks many homeowners aren’t familiar with such as:

1. Pricing your home correctly based on current market conditions
2. Creating listings that showcase your home’s best features
3. Marketing your property across multiple channels to reach buyers
4. Scheduling and showing your home
5. Negotiating with buyers and their agents
6. Preparing all the legal documents
7. Closing the deal

You may save on seller’s listing agent commissions but still need to offer a commission to a buyer’s agent to get buyers.

Each of these tasks takes time, effort, and expertise. Some homeowners may feel comfortable with these responsibilities while others may find it overwhelming especially if they’re working full-time and have family commitments.

Selling a House Yourself Pros and Cons

Now that we’ve defined what private home selling means let’s break down the pros and cons for home sellers. This will give you a better idea if this is right for you, your goals, your situation, and your life.

Pros of Selling a House Yourself

Work to Your Schedule

One of the biggest benefits of selling your house privately is the flexibility it gives you. When you work with a real estate agent you often have to work to their schedule which can be tough if you have a busy life or non-traditional work hours. Here’s how selling privately gives you more control over your time:

1. Flexible Showing Times: Want to show the house on a Sunday evening or early Monday morning? No problem. You’re not tied to an agent’s availability or typical showing hours.
2. Control Over Open Houses: You decide when (or if) to have open houses based on what works for you and your family.
3. Pace of the Home Sale: If you need to take a break from showings for a week or two due to personal commitments that’s up to you. You’re not feeling pressured by an agent to keep the momentum going if you need a breather.
4. Quick Decision Making: When an offer comes in you don’t have to wait for an agent to tell you. You can respond immediately if you want to.

Selling your house by the owner gives you more control over the process so you can handle the legal paperwork and promote your home online.

This control can be especially helpful if you have a busy life, work irregular hours, or have specific showing times and days you prefer. It allows you to balance the home selling process with your other life commitments more easily.

Set the Asking/Listing Price

When you sell privately you get to set the listing price of your home. This can be great and tough. Here’s what you need to consider:

1. Market Knowledge: While it’s important to research market trends and recent sales in your area you’re not bound by an agent’s opinion. This can be good if you have unique knowledge about your property or neighborhood that affects its value.
2. Emotional Detachment: You need to be objective when pricing your home. Without an agent’s perspective, you’ll need to be careful not to let emotional attachment inflate your asking price.
3. Flexibility: You can adjust your price quicker if you’re not getting the response you want without having to convince an agent.
4. Transparency: You can be completely transparent with buyers about how you arrived at your asking price which can help build trust during negotiations.

But you need to be realistic and base your price on facts not emotions to get a successful home sale. Overpricing will mean your home sits on the market too long, underpricing will mean you leave money on the table.

No Real Estate Agent Commissions/Fees

The best part of selling a house yourself is the potential to save real estate agent commissions. Here’s what that means financially:

1. Commission Rates: When you sell through an agent you pay a commission of around 5-6% of the sale price which is split between the seller’s agent and the buyer’s agent.
2. Potential Savings: On a $300,000 home a 6% commission would be $18,000. By selling privately you could keep this money in your pocket.
3. Negotiating Power: Without having to factor in agent commissions you may have more room to negotiate on price with buyers.
4. Reinvestment Opportunities: The money saved on commissions could be used for other things like upgrading your next home or boosting your retirement savings.

And the savings on commissions can add up to the final sale price.

Note: While you may save on the seller’s agent commission you may still need to offer a buyer’s agent commission if the buyer is represented. Many FSBO listings have sellers offer a 2-3% commission to buyer’s agents to get them to show their homes to buyers.

You Agree Who Pays Costs

In a private sale, you have more control over who pays what costs. This can mean big savings or a smoother transaction. Here’s what you need to know:

1. Closing Costs: These are 2-5% of the home’s purchase price and include various fees and taxes. In a private sale, you can negotiate with the buyer who pays what.
2. Home Inspection: You can decide if you’ll pay for a pre-listing inspection or leave it to the buyer to do (and pay for) the inspection.
3. Repairs: If the inspection reveals issues you have more room to negotiate who pays for repairs or if the price will be adjusted instead.
4. Title Insurance: You can negotiate if you’ll provide an owner’s title insurance policy for the buyer or if they’ll buy their own.
5. Home Warranty: Some sellers offer a home warranty to attract buyers. In a private sale, you can offer one and negotiate with the buyer.

This level of control allows you to structure the deal in a way that’s good for you while still being good for the buyer.

Selling a House Privately Cons

You May Need a Real Estate Attorney

While you save money on agent commissions you may find yourself needing to hire a real estate attorney. The legal side of a home sale can be complicated and overwhelming for those without experience in real estate transactions. Real estate attorneys fees are a cost of closing. Here’s why you may need a real estate attorney:

1. Contract Review: An attorney can review and explain the purchase agreement and other contracts so you understand what you’re signing.
2. Title Issues: If there are title problems with your property an attorney can fix them.
3. Closing Process: An attorney can walk you through the closing process and explain each document you need to sign.
4. Legal Compliance: They can make sure your sale is compliant with local, state, and federal laws including disclosure requirements.
5. Negotiation Support: If things get complicated during negotiations an attorney can provide guidance.

While hiring an attorney will add to your costs it’s often a good investment to ensure the home sale process is legal and smooth. Attorney fees are usually less than what you’d pay in agent commissions but it’s a cost you need to factor in..

Costs Can Add Up

While you may save on commissions other costs can add up when selling privately. Here are some to be aware of:

1. Professional Photography: High-quality photos are key to attracting buyers. Professional real estate photographers charge between $100-$300 per shoot.
2. Home Staging: If you decide to stage your home costs can range from a few hundred dollars for a consultation to several thousand for full staging services.
3. Marketing Materials: This includes printing costs for flyers, brochures, and yard signs. Budget at least $200-$500 for these.
4. Online Listing Fees: If you choose to list on the MLS through a flat-fee service expect to pay anywhere from $100 to $500.
5. Advertising: You may need to pay for online ads or local newspaper listings to reach buyers.
6. Home Improvements: You may do some upgrades or repairs to make your home more attractive to buyers.
7. Home Warranty: If you decide to offer one to buyers it can cost $300-$600 for a one-year warranty.

You need to budget for these expenses and factor them in when calculating your potential savings from selling privately. While they won’t add up to as much as an agent’s commission they can still be significant.

Time Burner

Selling a house privately can be a huge time suck. Many FSBO sellers underestimate the time and effort required to sell a home. Here’s a breakdown of the time-consuming tasks you’ll have to manage:

1. Market Research: Hours of research on comparable properties and market trends to price your home correctly.
2. Preparing the Home: Cleaning, decluttering, and possibly staging your home for photos and showings.
3. Marketing: Creating listings, taking photos, designing flyers, and posting on various platforms.
4. Fielding Inquiries: Responding to calls, emails, and messages from potential buyers, many of whom will not be serious or qualified.
5. Scheduling and Showings: Coordinating with interested buyers and giving tours of your home.
6. Negotiating: Back and forth with potential buyers on price and terms.
7. Paperwork: Preparing and reviewing all the paperwork for the sale.
8. Coordinating with Professionals: Working with appraisers, inspectors, and possibly attorneys or title companies.

If you already have work and family commitments this added responsibility can be overwhelming. FSBO sellers often report spending 20-30 hours a week on sale-related tasks during the wholesale process.

Marketing Your House Isn’t Always Easy

One of the biggest challenges FSBO sellers face is marketing their property. Real estate agents have access to a huge network of potential buyers and marketing tools that aren’t always available to individual sellers. Real estate professionals have access to marketing tools and networks that can increase exposure for home listings. Here are some of the marketing hurdles you’ll face:

1. Limited Exposure: Without access to the MLS your listing won’t reach as many potential buyers.
2. Lack of Professional Network: Agents have connections with other agents, investors, and potential buyers that you won’t have access to.
3. Marketing Skills: Creating a compelling listing and marketing materials requires skills you may not have developed.
4. Time and Effort: Marketing requires consistent effort and follow-up which can be time-consuming.
5. Understanding Your Target Market: Knowing how to reach and appeal to the right buyers for your property can be tough without experience.
6. Handling Inquiries: You’ll need to be available to respond to all inquiries promptly which can be difficult if you’re working full-time.
7. Screening Potential Buyers: Without experience, it’s hard to know who’s serious and just browsing.

You’ll have to be creative and proactive in getting the word out about your property which can be tough if you don’t have marketing experience or a large personal network.

How to Sell a House Privately – The Best Way

If you’ve weighed the pros and cons and decided selling your house privately is the right choice for you here are the detailed steps to help you succeed:

1. Research Your Market: Understanding local market trends is key. Look at comparable homes in your area to get a sense of a competitive price. Consider factors like recent sale prices of similar homes, how long homes are staying on the market, and any unique features of your home or neighborhood that could impact its value.
2. Prepare Your Home: First impressions matter. Make necessary repairs, declutter, and consider staging your home to make it as attractive as possible to potential buyers. This might include deep cleaning every room, decluttering and depersonalizing spaces, making minor repairs, enhancing curb appeal with landscaping, and considering professional staging services.
3. Price It Right: Be realistic about your home’s value. Overpricing can lead to a stagnant listing while underpricing might mean leaving money on the table. Consider getting a professional appraisal to help you set an accurate price.
4. Market Effectively: Use a mix of online and offline marketing strategies. This might include listing on FSBO websites and possibly paying for a flat-fee MLS listing, using social media platforms like Facebook Marketplace, creating a virtual tour or video walkthrough of your home, putting up an FSBO yard sign, and distributing flyers in your neighborhood, hosting an open house and networking with friends, family, and colleagues to spread the word.
5. Be Available: Respond to all inquiries promptly and be flexible with showing times. Remember every missed call or delayed response is a missed opportunity.
6. Negotiate Wisely: Be prepared to negotiate on price, closing dates, and other terms of the sale. Stay calm and professional and don’t take lowball offers personally. Consider having a minimum price in mind before you start negotiating.
7. Handle the Paperwork: Make sure all necessary documents are in order. This is where a real estate attorney can be invaluable. Key documents include the purchase agreement, property disclosures, lead-based paint disclosure (for homes built before 1978), title documents, and closing statements.
8. Consider Alternative Options: If you need to sell your house fast in Shorewood or the surrounding areas you might want to look into cash home buyers. Companies like Cream City Home Buyers buy houses in as-is condition which can speed up the selling process. They often provide quick closings, no need for repairs or renovations, no real estate agent commissions, and a simplified selling process.

This section is for FSBO sellers to help you understand the process, review offers, find serious buyers, and comply with disclosures.

Bottom Line

Selling a house privately can be a great experience and save you thousands in commission fees and give you control over the process. But it’s not without its challenges. You’ll have to be prepared to put in a lot of time and effort and possibly some upfront costs to market your home and handle everything yourself. Wisconsin FSBO sellers have some unique regulations and savings.

Before you decide, think it through. Do you have the time, knowledge, and resources to handle the sale yourself? Are you comfortable negotiating and dealing with the legal aspects of a real estate transaction? If not, you might want to consider other options.

There’s no one-size-fits-all when it comes to selling a home. Some homeowners do FSBO just fine, others find the expertise and network of a real estate professional invaluable. And for those in unique situations, or who need to sell quickly, getting an offer from one of the best cash home buyers in Wisconsin is the best solution. 

If you’re in the Milwaukee area and selling a home, you should consider all your options. Whether you sell privately, work with an agent, or consider a cash offer, the key is to make an informed decision that fits your situation.

Finally, if you’re dealing with taxes when selling a house in Milwaukee or looking for the best cash home buyers in Wisconsin, it’s always a good idea to talk to local experts who know the Milwaukee real estate market. They can give you advice to help you make the best decision for you.

Selling a home is a big deal. Whether you go the FSBO route or other options, the goal is to get a sale that works for you. With some planning, research, and maybe some advice you can handle the process yourself.