How to Sell a Home By Yourself (Well, Almost)

A few weeks ago, my wife and I put our final signatures on a stack of papers which gave up our rights to the rental property we had for over nine years. It had been a difficult decision to come to this point – but the timing seemed right and were happy to see it go to the young couple who purchased it.

All in all, I was pleased with the return, and we had done it (nearly) all by ourselves.

How we went about selling our house

sell home by ownerI'm a bit of a contrarian. I seem to always feel myself challenging what is generally accepted practice. While I don't always live this out (I still work a 9-5, drive a vehicle to work and have a mortgage), there is something in me that doesn't like status quo.

This doesn't always serve me well. And I'll admit, there's probably some stubbornness and/or pride involved – but I feel like there have been some positives that have come out of this way-of-life, including a decision to “live like no one else” and starting up the process of getting myself out of debt some 14 years ago.

So when the opportunity came up to sell our rental home, I thought, “Can I do this myself?”

I'm not writing this to pat myself on the back – but to perhaps encourage you, too, that you can challenge what “what we've always done”, for a different way and perhaps save you time and money. I'm not a real estate professional, so am sharing this only as my experience and not as a guaranteed template for how to do things.

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the beauty of rental homes

When I first got into renting our our second home, I was a bit concerned about finding tenants for the property. This home wasn't exactly in the middle of a large metropolis – so having a steady stream of folks I could rent to was important. Also, would I be able to pay any carrying costs if it didn't rent out? – not to mention any repairs or other necessities that would come up.

So when I started getting people in the home and I learned (the hard way) about finding good renters, the process became easier.

This brings me to the beauty of having a rental home: renters often become homebuyers. So, I knew that if I ever got good renters, who loved the home and were in the market to buy – I may be able to sell to them.

The renters I had were great. The last ones lived in the home for almost 3 years and were always on-time with the rent and treated the home with respect. Not an easy task given they had younger children.

Every year when the lease was up, I would typically say something along the lines of, “if you are ever in the market to buy the home, let me know.” 

But, I really wasn't in a hurry to sell. The home was increasing in value as well as our equity. I also enjoyed the whole rental process and managing property.

Time to sell

After 8 years of ownership, our renters finally approached us with a desire to buy.

When they got pre-qualified to buy, we began talking about the purchase: when they were thinking of buying and also a price. The last bit was less challenging that I anticipated it could be and I'll give a lot of credit to the buyers on this. They accepted my initial asking window – and we soon came to a mutual agreement on price.

Given the fact there was a buyer and an accepted sale price in place, there seemed little need to get real estate professionals involved to facilitate the sale. And while I'm being a bit contrarian here, in a hot market like todays, I'm not sure I would recommend going it alone, because you could be leaving some money on the table.

That said, I did consult with a realtor we had used on our second home purchase who was more than gracious in offering his thoughts on the purchase agreement, the selling process and checking other documents that came my way.

arranging a purchase agreement

I initially thought I might use my realtor to draft up a purchase agreement on the property. But, when my buyers came to me and said their mortgage company had staff in-house that could draft up one, I felt like it was a great way to save even more money.

After their mortgage professional drafted a copy, I had my realtor check it over for any glaring omissions. And after everything checked out – we were on our way.

There was a few items we went back-and-forth on. I also needed to purchase and forward on a resale disclosure from our association (about $290) – and also forward on necessary HOA docs the buyers could review.

things i learned

Within a couple weeks, we were at the title company office signing our hearts out. I have to give a lot of credit again to the buyers as well as their mortgage and title company. Both were easy to work with and helped make the whole process go alot smoother than normal.

This was my first home sale and it was a good learning process. Throughout it all, I learned a few things:

  1. There are a lot of expenses / fees in the home purchase process. Closing fees seem outrageous and the whole process seems like it could use an Uber-type disruption.
  2. Gains tax can be very taxing. I was of the belief that I would be able to get away without having to pay a lot of gains taxes on the sale (or any) – but that proved to be false after learning that you need to have lived in the home 2 out of the past 5 years you held the property. There is another way to avoid this tax through something called a “1031 exchange” where you essentially use all the proceeds to buy a new REI property.
  3. While you could do a lot of this yourself – I probably wouldn't recommend going totally alone. There are a lot of ins and outs in the selling process in terms of documentation and minutiae that most of us regular folks don't have a clue about. It's best to at least consult with someone in the know to get their feedback on some of the details.
  4. If you don't have a buyer in place, this becomes more complex. Obviously having a buyer in place makes the whole difference here. So if you don't have one already in place, I might start by asking family and friends if they know anyone in the market. Then, I might move on to coworkers and then Craigslist OR making it available through Zillow's, “Make me move” option.
  5. It was easier than I thought it may be. Given that I had some good consultation, a good buyer and title company – everything went slicker than I imagined. This gave me confidence that I could do it again.
  6. You never know if you're at the peak of the market. Even if you have a realtor in place, you never know when you might be at the peak of a market. Right now, it's hot and homes are going for a good price. Comps play a large role in determining what you ought to sell at.

I'd be interested if you've ever sold a home yourself or with little help. How was the process for you and would you recommend it?

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  1. I’ve never sold a home before, but I might in the future (my old apartment back home is rented out). I’m actually afraid to sell it by myself, so I’m probably going to get help. My parents have sold a home in the past, but who knows how things have changed in the meantime, I wouldn’t be comfortable with such a big responsibility. I’m aware it’s not rocket science, but still, I’d rather get help :D

    • Yeah, it can be a little daunting. But, I think it’s a lot easier than anticipated.

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