If you’re thinking of selling your home, you may be wondering how much real estate fees will affect your bottom line and how you can maximize your profits with a discount broker. Can you actually sell your home for free?
To help you understand what circumstances enable sellers to eliminate or minimize real estate fees, we spoke with Trevor Heuser, a top-performing HomeLight Elite agent in Austin, Texas. Let’s get started.
Can I sell my house to a cash buyer for free?
In cities with hot housing markets and real estate inventory shortages, homeowners are receiving unsolicited offers to buy their homes from investors, wholesalers, and house flippers who purchase homes at a discount and sell them for a profit to another buyer.
These are cash buyers who typically won’t request an appraisal, inspection, or repairs and may offer to purchase the home at no cost to the homeowner.
“What attracts people to them is they reach out with offers and start a conversation. But you don’t know what you don’t know. At the end of the day, you’re giving your home away for a discounted price and letting them have the equity that you’ve built up year after year,” says Heuser.
You might even have received offers from buyers or buyer’s agents, who may be interested in a cash purchase or a traditional home sale that includes a buyer’s commission, closing costs, and lender requirements.
If you’re considering an unsolicited offer, be aware that:
- A cash offer may or may not include fees. Some cash buyers offer to buy homes at no cost to you. Some charge closing costs, a minimum fee, or a percentage of the sale price. Others include hidden fees.
- You will likely be selling your home at a discount. If you want top dollar for your home, an unsolicited cash offer probably isn’t your best choice.
- A wholesaler may sell the purchase agreement to another buyer before your transaction closes.
- A wholesaler may pull the transaction if their buyer backs out.
- Legal requirements vary from state to state for wholesale property sales.
Before you accept an unsolicited cash offer:
- Request information about the company’s cost structure with examples of similar sales that show the net proceeds to the seller.
- Get a property valuation from a licensed appraiser ($300-$450) or use HomeLight’s free Home Value Estimator to understand how much your property might be worth before you agree to this kind of transaction.
- Shop around and request other offers to be sure you get the best offer (see our section about online, instant offers below).
- Hire a real estate attorney ($150-$350 per hour) to review your purchase agreement and documentation and make sure everything is above board.
- Read the fine print before you sign a purchase agreement to understand what contingencies allow the buyer to back out of the deal.
- Beware of scams. Some unsolicited offers come from scammers who will purchase your home for an extremely low price, or attempt a wire fraud scheme.
If you’re planning on moving forward with a cash offer, we recommend thoroughly vetting the house-buying company. Then, shop around and request more than one offer. Also, request information about the company’s cost structures with examples of similar sales that show the net proceeds to the seller.
Let’s face it, selling your home is not fun. It’s not fun to prep it – it costs money. It’s not fun to have showings. Not everyone’s meant for that situation. Everyone’s convenience has a cost. The question is: what is that number for you?
If not for free, are there ways to sell my home for less?
While there may not be a way to sell your house for free, there are a number of options you can consider to reduce your selling costs. We’ll list some of these below.
As you consider each option, it’s also important to weigh lower selling costs with a possible lower selling price, and the potential for less overall proceeds. We’ll show you what you might expect so you can compare the possible outcomes.
Sell your home FSBO
A for-sale-by-owner (FSBO) sale is a hands-on approach that may eliminate some fees. This may be a good option for you if you are a dedicated go-getter who is interested in being more involved in your home sale.
There are several services available that enable FSBO sellers to list and market their homes. Some are completely free, and others are provided for a small fee. These include:
Free FSBO tools and services:
Discount FSBO sites:
- Listing Spark
- List With Freedom
Keep in mind that there are costs involved in a FSBO sale, including:
While a FSBO sale may help reduce the costs involved in your home sale, it’s not hassle-free. You’ll be responsible for making and maintaining your listing and marketing your property, showing your home, and negotiating with your buyer.
Additionally, what you save in fees, you may lose in the selling price of your home. According to the National Association of Realtors, FSBO sales sell for 11% less than agent-assisted sales.
Use a discount-commission agent or service
If you’re not up to the work involved in a FSBO sale, a low-commission agent or discount brokerage might be what you’re looking for.
A low-commission agent or discount brokerage charges a lower commission rate (1.5 % to 2%) or a minimum fee for listing services. This fee reduces the amount you’ll pay to the seller’s agent – you’ll still be responsible for the fee paid to the buyer’s agent (typically 2.5% to 3%).
Examples of low-commission agent services or discount brokerages include:
- Redfin (1.5%)
- Clever (1% or $3,000 depending on selling price)
- 1 Percent Lists (1%)
- Prevu (up to 2%)
- SimpleShowing (1%)
- Houwzer ($5,000 flat fee)
The disadvantages of using a discount-commission agent or service include:
- The savings may be less than what you expect
- Your home may sell for less than it would with a top agent
- Limited in-person support
- Services may be limited
- You’ll have fewer agents to choose from
Use an online, instant offer homebuying service
If you’re interested in a fast, convenient home sale, an instant-buyer company might be what you’re looking for. Keep in mind that while the process is easier and faster than a traditional sale, an online instant offer may not net you the best profit on your home sale.
“Let’s face it, selling your home is not fun. It’s not fun to prep it – it costs money. It’s not fun to have showings. Not everyone’s meant for that situation. Everyone’s convenience has a cost. The question is: what is that number for you?” says Heuser.
Online instant offers are typically as-is, cash sales that may close in as little as 10 days. You can receive an instant offer from established house-buying companies like:
- Simple Sale (a HomeLight platform)
If this process appeals to you, HomeLight Simple Sale provides an offer with no charge and no obligation to you. There’s no upfront cost for repairs and we never charge a program fee or closing costs.
Sell to a family member or a friend
If you’ve already lined up a friend or family member to buy your home, you might be able to cut some costs involved in a traditional sale (mainly in staging, photography, listing, and marketing services). To avoid damaging your relationship, it’s recommended that each party hire an agent and/or real estate attorney to oversee the transaction and ensure it is fair and legal.
Working with a top agent might net you more money
If you’re considering selling your home online, for cash, or through FSBO or a discount brokerage in order to save money, you may actually be inadvertently hurting your bottom line.
Although you may pay between 5% to 6% in agent commissions, hiring a qualified real estate agent will typically net you the most profit in your home sale. In addition, our transaction data shows a top-performing real estate agent may sell your home for as much as 10% more than the average agent.
The benefits of working with an agent include:
- You’re more likely to get a higher sales price for your home on the open market.
- Your agent’s commissions are comparable to iBuyer service fees.
- You’ll receive personalized service from a professional who must represent your best interests.
- A local agent will provide the most accurate selling price based on their expert understanding of your market. An online or automated valuation process may miss these nuances.
- An agent can still get you a quick sale or even a cash offer, depending on the market.
A real estate agent may be willing to sit down with you and go through your options. Agents like Heuser actually incorporate instant offers as options in their listing presentations.
“I do what’s best for people, whether I receive a check or not. I explain their options. They can list on the market with me to get the most amount of money, or if timing or convenience is more important, they can sell to an iBuyer or use a trade-in service,” he explains.
Bottom Line: There is a cost to selling your home
At the end of the day, there is always a cost involved in the selling of your home, whether you are paying agent commissions and closing costs in a traditional sale, paying a discounted fee, or making a lower net profit with a cash buyer.
Whichever route you decide to take, make sure that you do your research. If you’re unaware of the market value of your home or the fees some services charge, you could end up leaving a lot of money on the table.
Unless you have substantial experience with these types of transactions, the best bet may be to start by talking to a professional – and there’s no fee to discuss your options with an agent. HomeLight’s free Agent Match can connect you with a top-performing agent in your area who can help advise you on the right course of action to help you net the most profit in your home sale.
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