Will selling my own home save me money?

If you’re thinking about selling your home without a real estate agent, consider the costs. (iStock)

With low-interest rates, there are plenty of buyers hoping to purchase a new home in the current real estate market. If you're looking to lower your expenses, you may consider skipping real estate agents and selling your house on your own to take advantage of the high demand. However, it's important to remember that selling your home isn't free.

When you're working with an agent, sellers can expect to lose approximately 5% of the sales price to agent fees. If you sell your home for $400,000, the agent fees could be $20,000. That cuts into whatever profit you may have from the equity in your home.

Some sellers choose to sell their home without an agent's help to save money. With the market value high and commission fees burdensome, this may seem the cheapest way to go, but opting to sell on your own comes with its own costs.

As you're considering whether selling your home without an agent is the right choice for you, visit Credible to get in touch with experienced loan officers and have your mortgage questions answered.

Duties and costs associated with selling your home without an agent

If you're considering selling your house yourself, there are several responsibilities you'll need to take on. These are things a realtor would otherwise handle:

1. Determining the property value and listing price of your home

One of the most important parts of selling your home is finding the right listing price. You don't want to list your property too low, or you could miss out on money, but if you list it too high, your home won't attract buyers. You may have to pay an appraiser to give you an estimate.

2. Preparing the home for listing

Whether you use an agent or not, you'll need to do some prep work before putting your home on the market. Marketing your home properly can help you get closer to your selling price. Prep work includes cleaning the house, tidying the yard, and making necessary home repairs. You won't have an agent to help you identify problem areas, though. You may also want to hire a home inspector before listing your home to ensure there aren't any significant problems. Remember: curb appeal is important and home sale prices are affected by it. If you want your home to sell, you have to prepare it.

3. Listing the property

There are multiple ways to sell your home. When you decide to sell, it doesn't merely mean putting a "For Sale" sign in your yard. While you will get some attention, it may not be enough. You'll want to consider posting your home on multiple websites and get your sale listed on the local MLS. Listing on the MLS costs a few hundred dollars, depending on your state. However, this gives your property maximum exposure. You may also want to hire a professional photographer for your listing.

Have questions about selling your home and your mortgage? Head to Credible now to get in touch with experienced loan officers and get your mortgage questions answered.

4. Staging fees

Some agents provide staging services (when a home is empty, they put furniture and décor in to make it look appealing). Paying a stager could cost several thousand dollars, or you could do it yourself.

5. Contracts

If you're selling your home on your own, you'll want to hire a lawyer to help with paperwork. It would be best if you had someone to prepare the purchase agreement and deed. Not all states require that you work with a lawyer, but some do. And unless you're incredibly comfortable with legal documents, they can make this part of selling your home much more manageable. While you may manage to sell your house without listing agents, a real estate attorney is crucial to have. Real estate contracts, property tax, and home inspections are tricky and a lawyer can help you navigate.

6. Other expenses

You may need to pay any remaining balance on your mortgage (if your home doesn't pay off the entire balance of your loan, you're still responsible for whatever is left). If you do make money on the sale of your home, you'll likely need to pay capital gains tax.

Selling your own home may save you some money, but you'll need to be available to answer phone calls on nights and weekends and be available for showings. These are the hidden costs of selling your home yourself that you should be prepared to deal with.

Refinancing your home may be a better option

If you're selling your home to free up extra cash, refinancing your property may be a better option. By refinancing, you'll forgo the costs of selling, home inspections, real estate contracts, and more – and you'll potentially save money, too. If you take advantage of the lower mortgage rates, you could save hundreds of dollars per month on your payment.

At publication, the average 30-year-fixed rate mortgage was 3.05%, a significant drop from early 2020. The average 15-year mortgage rate was 2.38%, also a significant drop from the year prior.

While rates did increase, they are still near historic lows, and homeowners with higher interest rates could benefit from a home refinance.

If you think a refinance may be an excellent alternative to selling your home, you can explore your mortgage refinance options by visiting Credible to compare rates and lenders in as little as three minutes.

The seller's market could benefit many homeowners. Your home value may have increased recently, making the costs to sell negligible. However, if you want to stay in your current property and save money, refinancing could have similar financial benefits without the cost of moving. To understand just how much you could save on monthly mortgage payments by refinancing now, crunch the numbers and compare rates using Credible's free online tool.

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