No one likes paying commissions and fees. Even when a commission makes sense, it triggers our sense of loss aversion. The money we lose on the commission outweighs the money we gain from the transaction — the money we value so much that we willingly pay a commission.

It is understandable, then, that you might seek ways to sell your house without a real estate agent. If you can cut out the agent, you cut down on commissions and fees. That means more money in your pocket, right?

In some cases that is absolutely true. In an extreme sellers’ market you can sometimes find qualified buyers and negotiate your own deal. You might even get more than your asking price, depending on the specific market. The check you deposit will be quite fat indeed.

So why doesn’t everyone do it like this?

If it were easy, everyone would do it. You can probably figure, then, that it’s not very easy. Real estate agents earn good money for a reason. They have professional expertise that can make the sales process easier. In some cases they can even make it more profitable, despite the commission.

It all depends on your personal circumstances.

If you’d like to cut out the middleman and avoid paying a commission, you do have options.

How to sell a house without a real estate agent

If you want to sell a house without an agent, you have essentially two options. You can play the part of agent yourself, or you can sell to an investor.

At this point homeowners will probably be more curious about playing the agent themselves. After all, the entire idea is to make more money by eliminating a commission. In that case why sell to an investor?

Here are the basic steps in the for sale by owner (FSBO) process.

1. Get the house in saleable condition

Selling your house without a real estate agent isn’t as simple as sticking a for sale sign in your front lawn. Again, if it were, more people would do it. You have to get the house in condition to sell. That means:

• Making repairs, both necessary and cosmetic
• Investing in good (and consistent) landscaping
• Painting the walls a neutral color
• Staging the inside

A real estate agent is very good at coordinating these activities. You can certainly do it on your own, though, if you have enough knowledge and the time to learn.

2. Attract qualified buyers

Of all the things a real estate agent does, this might be the most important. You can’t sell your house if no one comes to see it. If your advertising consists of a sign in your front lawn and nothing else, you’re not going to attract many, if any, potential buyers.

Even if you do, will they be qualified? That is, can they even afford the house? Can they secure financing? Are they actually looking to buy a house, or are they just playing pretend? You’d be amazed at how many people look at houses because they’re bored. (Ever seen Breaking Bad?)

You need not only an advertising strategy — one that goes beyond the sign in your front yard — but a way to qualify the people who come see your house. An open house might work once, but it can’t be your entire strategy. You won’t sell unless you can find many people who are interested, ready, and able to buy.

3. Negotiate with winning bidder

Just because someone submits an attractive bid does not mean that you’ll sell your house to them. There is a whole long process that occurs between the time when you accept the bid and when you close. Few parts of it are pretty.

While you might agree on a price (but then again, you won’t always), there are other considerations. Buyers often ask for contingencies, conditions that are necessary for the sale to go through. Sometimes they need the sale contingent upon selling their own house. That’s not a good spot for a seller. But, if you haven’t attracted many interested buyers, you might be stuck with one who offers less than ideal contingencies.

Not to be a broken record, but real estate agents are experienced in negotiating contracts. Are you? If you’re not, are you prepared? Or did you just read a few articles on the internet?

There are other steps to be sure, but these form the basic outline of home sales. If you’re not prepared to handle all of them with 100% focus and attention, how can you be prepared for all of the details I left out of the process?

Selling to a cash investor

When you sell your house to an investment group such as Houton House Buyers, or even a single investor, you avoid using a real estate agent. So that is your second way of avoiding paying commissions. Depending on your house, it might be the right call.

I’ll level with you: if you live in an expensive neighborhood and your house doesn’t require thousands in repairs, you might be off selling on the real estate market. Hiring an agent helps ensure you get top dollar for your home, which, in this situation, will still be a huge sum even after commissions.

Let’s say you’re not in that situation. You live a simple life in a simple home. But now it’s time to upgrade. Part of your simple lifestyle is maximizing dollars, so you want to avoid hiring a real estate agent. Here’s the equation for how much money you’ll gain when you sell:

Sale price – remainder on mortgage – repair costs – cosmetic costs – advertising costs – other fees = money in your bank account

When you sell to an investor, the equation is much simpler:

Sale price – remainder on mortgage = money in your bank account

Again, we’ll stay on the level. The sale price will certainly be higher in the first equation. You’ve taken the time and effort to repair the house and get it in maximum saleable condition. But are you concerned with the sale price, which sits on the left of the equal sign? Or are you interested in the number to the right of the equal sign?

It’s the only number that matters.

What’s better, the effort is simple. You just look for a local real estate investment group or individual. You’ll have to do some homework — like any industry, there are bad apples among us — but once you feel comfortable you can just call us up and we’ll come to your house and deliver a no-obligation quote. (If you don’t get a free quote or there is any other obligation involved, chances are you’re dealing with one of those bad apples.)

It sure beats the alternative, right?