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Residential Real Estate Sellers

For Sale By Owner: Is it worth it?

By October 13, 2022July 6th, 2023No Comments

How do I know if selling my own property is right for me?

We’ve all heard the story where someone decides to sell their house by owner, sticks a sign in their yard or puts a post on Facebook and they magically find a buyer and sell their house in a few weeks and move into their dream home.

Wait … you haven’t heard that story?

You probably haven’t heard that story because it doesn’t happen very often. For most residential sellers (in McHenry or Lake County, Illinois) it takes a whole team to get them from the idea of selling to holding a check at the closing table.

Most sellers use a Realtor, home staging company, moving company, real estate attorney and a few other contractors to go from wanting to sell their home to holding a check at the closing table. 

It is definitely true that selling your home by owner can save you money. The important thing to figure out is what you are missing out on by doing it yourself — and how much money and time you are actually saving.

From experienced McHenry real estate attorney Adam Diamond of Diamond Real Estate, here are some things to keep in mind when making your decision.

Selling your own house can be...complicated

In some ways, this analysis is like buying a new house. When you first start looking at models with the builder you see all the amazing amenities of your dream home and have stars in your eyes.

Then, once you get the final price and fall out of your chair from sticker shock. After getting up off the floor, you decide that you can live without some things and can make some updates yourself later.

If you are a professional flooring contractor, putting in your own wood floors will probably be an easy way to save some money on the new house. On the other hand, if you’ve never installed a wood floor in your life, it’s going to take you a lot of time to figure out how to install the floor and you may not end up doing it correctly.

In the meantime, your house will look like a construction zone as you figure it out on your own. At the end of the day, installing your own floor may end up being even more expensive than just having the builder do it.

You could also save money on the new house by doing all of the plumbing and electrical work yourself. But if you are not familiar with all of the local building codes and requirements, you may spend a lot of time installing and reinstalling the electrical and plumbing systems to get them to pass the inspections.

Even if you get everything to pass the inspections on the first try, are you sure that everything is safe and correctly installed?

I think you get the point. Be careful when you decide to do it yourself and understand the tradeoff you are making by not just letting a professional do it right the first time.

I have a friend who is a surgeon and they once told me that they could teach almost anyone to physically do a lot of the procedures in a few months. All the years of medical training and apprenticeships are to be ready for all of the potential problems that can come up while you are doing the procedure.

It’s the same thing with selling your house by yourself. You can fumble your way through it if everything goes right, but you will want some good backup or coaching if things don’t go quite as planned. 

With all that in mind, I have found with most residential real estate deals, if you have a collaborative environment where everyone is working together almost any major obstacle can be overcome.

Unfortunately, sometimes the stress of the process or circumstances beyond your control do not allow you the luxury of calm collaboration and compromise.

For example, when a moving truck with all of your worldly possessions is sitting in the title company parking lot with the air conditioning running full blast to keep your kids and pets cool, you may not be open to postponing the closing another day because of a hiccup with your lender’s loan package.

What does “For Sale By Owner” mean exactly?

When people say that they are going to sell their house “by owner,” they usually don’t mean that they will do everything themselves.

They usually don’t intend to:

  • find a buyer,
  • draft the contract,
  • negotiate with the buyer’s Realtor about the basic contract,
  • negotiate with the buyer’s attorney about inspection and contract modifications,
  • review the title,
  • shop for title insurance,
  • prepare the deed and closing documents,
  • coordinate with the Buyer’s realtor, lender, inspectors, and title company,
  • draft the closing statement,
  • order and coordinate all the payoffs and waivers, and
  • schedule the closing.

Most people simply mean that they don’t want to sell with a Realtor and don’t want to pay a real estate commission.

Selling without a Realtor

So, the first step of this analysis is to figure out what a Realtor actually does and if it’s worth doing it yourself. If you have never sold a house before and you don’t work in the real estate industry, you will need to figure out if it is like putting in the wood floors yourself or trying to build the house by yourself.

When you hire a Realtor, you are usually hiring a marketing expert to help you market and sell your property. The services of each Realtor (or real estate broker) may vary and are almost always spelled out in a listing agreement. A listing agreement is usually a contract between a home seller and a Realtor for the Realtor to help the seller with the sale of their home..

Most realtors provide a wide range of services that can include:

  • Helping you figure out a selling price (sometimes called a listing price) based on:
    • Comparable sales in your area;
    • Comparable listings in your area (your competition);
    • Experience in working with other Sellers and knowing what staging, upgrades or repairs will get you top dollar or maximize your return on your investment; and
    • Other insights based on their knowledge about the real estate community and the local area.
  • Develop a marketing strategy (digital and physical) often including:
    • Staging (both virtual and physical)
    • Pictures (usually with a professional photographer)
    • Home improvements that will maximize your return on investment or help your home pass inspections and avoid problems;
    • Describe your property in a way that will attract the buyers you want to find to pass on your family legacy
    • Generating interest online through social media exposure
    • Hosting open houses to attract Buyers

Needless to say, if you are not confident in determining the price yourself and finding the best buyer, hiring a Realtor is probably worth the money. 

Once you find a Buyer, many Realtors will help you navigate the process from negotiating the contract through closing and provide you with additional resources. This process also can include:

  • Screening and negotiating offers (potential buyers) and helping you to know a good offer when you see it;
  • Helping you put together a rough net sheet so you know about how much you will be walking away with if you accept an offer;
  • Helping you put together the contract once you have an offer you would like to accept;
  • Helping you maintain your privacy and security with your property by monitoring access to property for showings, appraisals and inspections and making sure to communicate any specific requirements to everyone accessing the property;
  • Helping you find inspectors and contractors if any inspection issues come up;
  • Helping you assemble your team by helping you find a home stager, real estate lawyer, title company (etc.)

What if I don’t need all of those Realtor services?

If you only need some of the services provided by a Realtor, there are alternative options to hiring a full service Realtor or real estate broker.

Some of these alternatives include:

1. Flat fee listing services (sometimes called minimum service real estate brokers)

Basically, you are paying a flat fee or a lower commission for very specific services, which may include:

  • Listing a property on the Multiple Listing Service (MLS) to market your property to Realtors representing Buyers;
  • Publishing your Listing online to the major real estate marketing sites like Zillow, Redfin or; and
  • Hiring a professional photographer to take pictures of your home for the digital listing.

If you know exactly what services you want or need, these types of services can be helpful. 

With these types of services, you generally get what you pay for. This means that if you are paying a low flat fee, read the fine print carefully to figure out exactly what is included or not included with the service. 

Some examples of services that may not be included are:

  • handing showings;
  • monitoring access to the property;
  • negotiations with Buyers (and their Realtors or attorneys);
  • preparing net sheets; and
  • having a local network of attorneys, title companies and contractors.

It is also very important to know how long you are committing to the service or how you can cancel. You should also watch out for additional or hidden fees.

2. For Sale By Owner Sites

Another option is to use a non-Realtor marketing service or platform. These are commonly referred to as “for sale by owner websites or services.” 

Just like flat fee listing services, you need to be very careful to understand exactly what services are being provided and if there are any additional fees. Always read the fine print and be weary of deals that sound too good to be true!

3. DIY or Advertise Yourself

If you know what price you want and you are comfortable negotiating and putting together the deal yourself, you may consider just advertising on your own.  For many people, this involves putting a sign in the yard, posting on social media (Facebook, Instagram, etc.) and/or advertising in the local newspaper to get the word out that you are selling. 

The biggest concern with this approach is being careful while dealing with the general public. If you are showing the house, it is always a good idea to not do it alone and have some basic security protocols in place in case the potential buyer turns out to have an ulterior motive.

Putting together the contract

Once you have a buyer, you will need to put together a written contract. 

In most residential transactions, the buyer presents the seller with a written offer. This offer is usually a standard residential contract that spells out all the details of the deal. The seller then reviews the offer and accepts it, rejects it, or makes a counteroffer by changing some of the terms and sending it back to the buyer.

If you are working with a Realtor, they usually can help you understand the basic details of the offer and compare it with other offers. Most offers usually include things like the:

  • Purchase Price
  • Earnest Money
  • Closing Credits
  • Closing Date
  • “As is” or home inspection
  • Disclosures
  • The Buyer’s proof of funds or a pre-approval letter

If you have any legal questions about the offer, it is usually a good time to start working with a local real estate attorney.  

If you are fine with the basic terms of the offer, many of the standard local real estate contracts in Northeastern Illinois (the Chicago Metro Area) have an additional protection for both buyers and sellers called an attorney review provision. This provision usually allows an attorney for either the Buyer or the Seller to review the contract after it is signed and request changes, reject it or accept it. 

If there are not any Realtors involved and your Buyer does not know how to prepare an offer, they can also hire a local real estate attorney to put together an offer.  

We’ve prepared a helpful guide of the information your real estate attorney will frequently need when preparing a real estate contract. Download it here. 

There are a lot of details to fill in on the standard real estate contract. The good news is that thinking through all of these details will avoid a lot of common problems.

For example, one of the most common misunderstandings between Sellers and Buyers that results in closing table screaming matches is personal property. Some Sellers think that the pool table in the basement or the hot tub on the back porch are wonderful gifts to leave for Buyers. Unfortunately, some Buyers see these things differently. They sometimes see these things as junk that they have to pay someone to remove.

When it comes to personal property issues my motto is “when in doubt, spell it out.” What I mean by that is to always be clear and put in writing exactly what stays and what goes. This will avoid the most common closing table problem and unanticipated Seller expense.

Attorney Review and Home Inspection Issues

Once you have a signed contract, the next step is usually negotiation of attorney review and inspection issues.

At this point, if you are planning on using the services of a real estate attorney, if they are not involved already, it is a great time to hire them.

Most real estate attorneys will review the contract with you, let you know what your responsibilities are and will have a few contract modifications or clarifications that they want to make. Most real estate attorneys will guide you through the paperwork (both digital and physical) part of the process all the way through closing.

If you are not using a Realtor, it is very important to have a clear understanding with your attorney as to who is responsible for what part of the process. Most attorneys handle all the paperwork part of the transaction but do not usually get involved with things like coordinating access to the property for inspections, appraisals and other reasons the Buyer will need to access the property.

If the Buyer makes any repair requests, your attorney can tell you if the request complies with the terms of the contract but will usually ask you to get your own estimates and find your own contractors to make the requested repairs.

On the other hand, a full-service Realtor can usually give you a lot of practical guidance on inspection issues and usually has a good network of contractors to help you get estimates and figure out the costs of different repairs.

Many times, the Buyer’s attorney also requests modifications or clarifications to the contract. Your attorney will help you understand these requests and figure out how you want to respond.

Once all of the attorney review and inspection items are agreed upon between you and the Buyer, the next step is to get ready for closing.

Getting Ready for the Closing

If your Buyer is getting a mortgage to purchase the property, the most important thing for them is to get their financing ready to go. Most residential real estate contracts have a mortgage commitment or mortgage contingency provision that basically allows the Buyer to cancel the whole contract if they are not approved for their loan.

Unfortunately, most mortgages are not fully approved (sometimes referred to as a mortgage commitment or a “clear to close”) until days or sometimes even hours before the closing. For Sellers, this usually means you need to have everything ready to go and hope for the best.

In terms of everything you can prepare ahead of time, “ready to go” for the closing usually involves:

  • Performing a title search to make sure you can provide the Buyer with clear title (and title insurance);
  • Having a recent plat of survey;
  • Completing all inspections required by the contract (examples include, well, septic and pest inspections);
  • Completing all inspections required by the local city, County or homeowner’s association;
  • Ordering all required homeowner’s association conveyance documents and having them for the closing;
  • Making sure to have payoffs for all mortgages, liens or other obligations you need to pay to clear title to the property;
  • Preparing your deed, bill of sale and any other closing documents that are not provided by the title company;
  • Moving out of the house so the Buyer can complete a final walk through prior to closing;
  • Making sure that all agreed upon repairs are completed prior to closing and paid receipts are provided to the Buyers at closing; and
  • Making sure the Buyer, or their Realtor, has the keys or access to the keys at the closing table once the title company verifies that the closing is completed.

If you are using a real estate attorney, aside from helping you move out of the house, they will help you coordinate and prepare the majority of these things.

The Closing

Most residential real estate closings in northeastern Illinois take place at a title company. The Buyers usually attend in person and sign all of their loan documents. Most of the time, Sellers are not required to attend in person if they pre-sign any documents that need original signatures like a deed or affidavit of title.

If the Seller is using a real estate attorney or wants someone else to physically attend the closing for them they can also sign a power of attorney to authorize their attorney or another person to sign the final closing documents.

If you are moving out of state and you are not using a Realtor, you may have to work out some additional logistics before you leave the property. You will need to figure out how to allow the Buyer access for a final walk through before the closing. If any issues arise from the walk through, you will need to have someone in the area that can help coordinate with contractors to get any last minute or emergency estimates or repairs. 

You will also need to coordinate getting the keys and garage door remotes to the closing table or to the Buyer’s Realtor so they are available when the closing is completed at the title company.

If you’re ready to sell your property in McHenry or Lake County, Illinois, Diamond Real Estate Law is here to help

Overall, selling your home by owner can be a great way to save money. The most important thing to understand is the tradeoffs you are making in terms of time, money and aggravation by doing things yourself.

If you are just trying to save money on the real estate commission by not hiring a Realtor, make sure you understand exactly what things you will need to be doing yourself. 

Once you understand the trade-offs you are making by doing things yourself, you can figure out what team members you need to get you from contract to closing (or a check in your hands) as fast as possible with minimal aggravation and headaches.

Selling your home can be a great way of creating or expanding your family legacy and moving into your dream home. If you are interested in working with the team and Diamond Real Estate Law, we are ready to help. Contact us today to set up your first consultation.


DISCLAIMER: Any information contained herein is solely for informational purposes. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, I always urge you to contact a local attorney for advice pertaining to your specific legal needs.

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