Do you wonder if you can get rid of your house without hiring a real estate agent? Perhaps your friend is having a hard time selling his or her house and needs some guidance. Maybe your marketing skills would be helpful in this case. Are these actions legal? We dive into the details below.
The cost of selling, helping, buying, or marketing a property without a license
The United States Government strictly prohibits the assistance, operating on behalf of, and transfer of property without a real estate license. Not only is selling property against the law, but marketing, buying, or helping another person with property changes is a crime as well. Breaking this law means a felony charge with steep consequences.
Any contract interaction usually means a broker or property license is necessary. Managing a property is another no-no without the right qualifications. For these reasons, states require a particular number of real estate education hours to qualify to take the state license exam. Managers, sellers, advertisers, marketers, and buyers must follow codes of ethics and other morally sound guidelines to operate in the property field. These rules are the same whether it is a one-time circumstance or a regular occurrence.
Selling personal property
There is one exception to the above law. Anyone who is the personal owner of a home, business, or tract of land may sell the property if it remains for individual use. Homeowners can market a home, stage it, and offer open houses just like an agent, but without the education and licensing requirements. Owners may also rent or lease the unit to tenants as long as the landlord abides by state health and building codes and landlord-tenant rules.
For sale by owner
FSBO is a term referring to people who opt to sell a home without using a broker or agent. A person will usually save the standard six percent commission by going this direction. For a $500,000 property, the savings is $30,000. This amount is no small chunk of money.
Advantages of selling without an agent
Control of marketing the home is a huge perk of selling solo, aside from the commission savings. Keeping the process simple minimizes communication errors. By selling as a private owner, the homeowner chooses whether to offer private showings, entertain short sales, or offer incentives like paying the closing costs.
Drawbacks of listing FSBO
Not having the in-depth market knowledge to analyze the current conditions and negotiate can make the selling process longer and more tedious. Knowing the right price to list the home is crucial to the buyer’s perceptions from the beginning. Plus, selling privately means all the work is on the seller.
People living in a hot market or an area with little inventory may find listing as an FSBO the best option. In stale markets, areas with little economic growth, and places where homes for sale are on every street, it may be wise to weigh the pros and cons of working with a broker or property agent. If leasing or renting is a more preferable option, then hiring a licensed manager may be the best choice.
While a person can sell his or her personal property without a license, it is not always the right idea. You could even become a realtor yourself.
The market conditions, time available, and understanding of property sales should factor into the decision to become an FSBO. There are benefits and disadvantages to this option, so a property owner or buyer needs to consider each avenue to see which will be the most lucrative and beneficial.