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We want to sell a home without an agent. What are the pitfalls?


Q. Mom, 97, moved in with me when COVID happened and we are about to sell her home. We wanted to sell it in “as in” condition, without a real estate agent. What pitfalls should we be aware of? And where should we put the money after the sale? I think that Most bank accounts are only insured for $150,000.
— Adult child

A. Selling a home is a big job.

For starters, you do not need a real estate agent to sell your home.

If you sell your home yourself, the process is known as “For Sale by Owner,” said Marnie Hards, a certified financial planner with Aznar Financial Advisors in Morris Plains.

If you do this, you should be prepared to devote a significant amount of time, energy and effort to the process, from marketing and staging the house, answering questions from potential buyers, and more, she said.

“You will also need to learn about the laws that govern real estate transfers to understand what kind of paperwork you will need to prepare and who needs to sign it,” she said. “In New Jersey, you will need to hire a real estate attorney to handle the paperwork. There may also be mandatory disclosure laws that would require you to disclose certain characteristics of the home.”

Selling a home without an agent could save you thousands of dollars given that you typically would pay a commission of 5% to 6% of the sales price of the home, she said.

“I understand the temptation to do it yourself in an effort to avoid what could be a fairly hefty fee, but there are some risks to doing it yourself,” Hards said.

First, an agent may discourage his or her buyers to work with you because it is typically more complicated and difficult to get a transaction done without a professional working on both sides of the deal, she said.

Depending on how long the home has been in your family, it may be an emotional process, Hards said. When you get a professional involved, he or she can stay detached and unemotional which typically leads to better outcomes, she said.

Also, real estate agents typically have a significantly larger network to spread the word about your home, she said.

“Realtors are typically skilled at asking the right questions to determine if the buyer is appropriate and qualified,” Hards said. “They should also be comfortable with and skilled in the negotiation process which can be difficult if you have not had to go through this process before.”

Also note that it can be uncomfortable for potential buyers to view a home when the owner is there, she said. Buyers tend to be more likely to spend more time viewing a home if they are working with an unrelated party such as a real estate agent.

And finally, the legal paperwork can be complicated, and a real estate agent should know much more about it than you do, she said.

“If you are not in a rush to sell the house, you could always try to sell it yourself first and if it becomes too much, you can hire a realtor,” she said. “Keep in mind that the average time it takes to sell a home across the country is between 55 and 70 days.”

Once you do sell the home, if you decide that you want to keep the proceeds in cash instead of investing it, you should consider a high yield savings account, Hards said.

“Unfortunately, interest rates on savings accounts are quite low, so it is worthwhile to look around to find a reasonable yield,” Hards said, noting that you can search online for the highest interest rates. “The amount of FDIC insurance depends on how the account is titled. If it is titled individually, you will have $250,000 of insurance coverage per bank.”

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This story was originally published on Sept. 30, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.