Why Selling Your Home Yourself Could Be More Appealing Than You Think

Mary Anne Bryan is on the verge of putting her 3-bedroom brick Colonial in Chicago’s Beverly neighborhood on the market, a house where she raised her daughter while working as a real estate agent for ten years. Bryan has noticed some significant shifts in an industry she always believed was ripe for innovation, particularly due to legal disputes surrounding the commissions of buyer’s agents.

Bryan plans to manage part of the selling process herself, potentially saving a substantial sum by not paying the typical 2.5% commission to a listing agent. However, she faces several uncertainties.

The biggest question for her is how to verify whether potential buyers are truly ready to make an offer. And if a buyer comes through a real estate agent, what commission expectations might that agent have?

“How can you tell if unrepresented buyers are pre-approved?” she asks. “What’s the procedure, and how do you ensure it’s done fairly? Despite my experience, I worry about possibly making a mistake.”

Is the FSBO Market on the Rise?

In 2023, a Missouri jury found that the National Association of Realtors and several major real estate brokerages had colluded to keep commissions excessively high. Following this verdict, new regulations were implemented in August that altered how commissions are structured and disclosed.

While much of the focus in the media and industry has been on how these changes affect buyers, sellers are entering a radically different environment as well. Coupled with Americans growing more accustomed to online transactions for large purchases, and the knowledge that sellers currently have the advantage in one of the tightest real estate markets ever, the appeal of For Sale By Owner (FSBO) is stronger than ever.

“The FSBO landscape has shifted dramatically since the removal of the compensation offer requirement from the MLS (Multiple Listing Service),” notes Victor Lund, managing partner at WAV Group, a real estate consultancy. “It’s game on.”

The compensation offer requirement that changed in August refers to the commission paid to the buyer’s real estate agent, traditionally covered by the seller. Plaintiffs in the 2023 lawsuits argued that it was illogical for one party in a transaction to pay for the representation of the other side.

This old system sometimes meant that a buyer’s agent could earn more than the seller’s agent, as sellers looking to cut costs might reduce their agent’s commission. Conversely, buyers seldom questioned the financial arrangements. Moreover, if a seller offered a buyer’s agent less than the typical local commission, many buyers’ agents would direct their clients away from those listings.

With the new rules removing the compensation offer for the buyer’s broker from listings, industry experts anticipated complexities in buying processes. However, as evidenced by Bryan’s concerns, sellers are facing just as many uncertainties.

What’s the Best Way to Sell Your Home?

Ena Koellish views the evolving market as an opportunity.

Two years ago, alongside her husband, Koellish founded The K Group Real Estate in Radcliff, Kentucky. Motivated by a chance to educate consumers about one of the most significant transactions of their lives, Koellish was startled by the unethical practices she discovered in the industry.

“The amount of unethical behavior in this industry really shocked me,” she states. While not all agents engage in such behavior, she points out that traditional real estate practices are opaque and confusing for many consumers.

Now, Koellish produces online videos to demystify the selling process for prospective sellers. She believes homeowners should be able to purchase a comprehensive package of services typically offered by a listing agent, or choose individual services from an “a la carte menu” for a fee if they handle some selling tasks themselves.

A Real Estate “Coach” Over an Agent?

Several agents have long offered limited services for a modest fee, observes Lund, and for experienced homeowners or those familiar with the process, using such services might be appropriate.

However, he warns that going it alone can be risky. “If you’ve ever sold something as simple as an item on Facebook, you know it can be challenging and frustrating. And that’s just for a couch,” he explains. “Real estate agents provide a valuable service.”

For most sellers, the “background stuff” like knowing where to list a home, might be straightforward for professionals but daunting or even unmanageable for novices. Most sellers, he argues, need at least a “coach.”

Industry veterans like Brad Rice, who has founded several mortgage and real estate firms, are exploring similar opportunities on a larger scale. Rice recently launched Homepie, an online platform designed to connect buyers and sellers and facilitate transactions on both ends. Currently available in California and Florida, Homepie has plans to expand further.

Mary Anne Bryan remains concerned that many people might attempt FSBO without fully understanding what it entails.

“Most people only sell a home a few times in their lives,” she notes. “I believe realtors play a crucial role and deserve fair compensation.”

Yet, she acknowledges that the system could be more efficient. “Perhaps adopting a la carte services is the way forward,” she suggests.