Free Guide to Understanding Your Home Selling Options

Understanding Your Home Selling Options

Selling a home is one of the largest financial decisions most people make in their lifetime. The real estate market offers several different paths to sell your property, and each option comes with its own advantages, disadvantages, and financial implications. Understanding these options helps you make an informed decision based on your specific situation, timeline, and financial goals.

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According to the National Association of Realtors, approximately 5.8 million existing homes were sold in 2022 across the United States. However, the methods used to sell those homes varied significantly. Some sellers worked with real estate agents, others sold directly to investors, and some used newer online platforms. Your choice of selling method can impact how much you receive, how quickly your home sells, and what costs you'll pay along the way.

This guide provides information about the main home selling options available to you. By reading through each section, you'll learn how different selling methods work, what to expect financially, and what questions to ask when exploring each path. The goal is to give you enough knowledge to have productive conversations with real estate professionals and make a decision that aligns with your needs.

Practical Takeaway: Before exploring specific selling options, write down your priorities. Are you focused on selling quickly, maximizing profit, minimizing stress, or something else? Your priorities will help you evaluate which selling method makes the most sense for your situation.

Selling Through a Traditional Real Estate Agent

The most common way to sell a home in the United States is through a real estate agent. According to the National Association of Realtors, about 88% of home sellers used a real estate agent in recent years. In this model, you hire an agent who lists your property in the Multiple Listing Service (MLS), markets it to other agents and buyers, and handles negotiations and paperwork.

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When you work with a traditional agent, the typical commission structure involves paying a percentage of the sale price—usually between 5% and 6% of the final sale price. This commission is typically split between your agent (the listing agent) and the buyer's agent. So if your home sells for $300,000 with a 6% commission, you'd pay $18,000 total, with $9,000 going to your agent and $9,000 to the buyer's agent. This commission comes out of your proceeds, reducing the amount of money you receive.

The primary advantage of using an agent is access to the MLS, which is a database that real estate professionals use to show properties to potential buyers. Homes listed on the MLS receive much broader exposure than homes sold through other methods. Agents also handle marketing, scheduling showings, negotiating offers, and managing the complex paperwork involved in a sale. Most agents have experience handling transactions and can guide you through the process.

However, the commission cost is significant. That 5-6% represents money that doesn't go into your pocket. Additionally, with a traditional agent, you typically have less control over the timeline. The agent will price the home based on current market conditions, and the sale will proceed at the market's pace. In slow markets, this could take several months. Some sellers also find the experience stressful because their home is constantly being shown to strangers and may receive critical feedback.

When choosing a real estate agent, interview multiple candidates. Look for agents with experience selling homes similar to yours in your area. Ask about their marketing strategy, how they price homes, their average days-on-market, and their sales record. A good agent should be able to provide references from recent sellers.

Practical Takeaway: If you choose a traditional agent, clarify the commission percentage upfront and confirm whether it's negotiable. Also ask what specific marketing activities they'll conduct on your behalf, such as professional photography, virtual tours, or print advertising. Different agents offer different services, and this can impact your home's visibility.

Selling Directly to Home Buying Companies

In recent years, companies that buy homes directly from sellers have become increasingly visible. These companies—sometimes called iBuyers or "we buy homes" companies—purchase properties directly, meaning you avoid the traditional listing process and agent commissions entirely. Companies like Opendoor, Zillow Offers, and local home buying investors operate in this space. These companies typically purchase homes in any condition, including those needing significant repairs.

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The process is straightforward: you contact the company, they evaluate your property (often using online tools and occasionally with a physical inspection), they make you an offer, and if you accept, they handle closing costs and arrange the transaction. The entire process can happen in a matter of weeks, sometimes even faster. There are no agent commissions and no extensive marketing period.

However, there are important financial trade-offs. Because these companies assume the risk of reselling the property, they typically offer less than market value. The discount typically ranges from 5% to 20% below what you might get from a traditional sale, depending on your local market and your home's condition. For example, if your home is worth $300,000 in the traditional market, a home buying company might offer $255,000 to $285,000. Additionally, many of these companies charge administrative or transaction fees, which are taken from your proceeds.

These companies advertise speed and convenience—you avoid open houses, showing your home repeatedly, and the uncertainty of waiting for offers. This appeals to people in difficult situations: those facing foreclosure, going through divorce, relocating for employment, or dealing with an inherited property. The certainty of a quick sale can have value even if the sale price is lower.

Before accepting an offer from a home buying company, research the company's reputation through the Better Business Bureau and online reviews. Understand exactly what fees they're charging and in what form. Some charge what they call "service fees," others claim not to charge fees but offer lower purchase prices to account for their costs. Also have a real estate attorney review the contract before signing, as these agreements often contain terms that may favor the buying company.

Practical Takeaway: Use a home buying company's offer as a data point, not your only option. Get traditional market appraisals from agents or professional appraisers to understand what your home might sell for traditionally. Then compare: is the difference between the home buying company's offer and the traditional market value worth the speed and certainty you're gaining? The answer depends on your specific situation.

For-Sale-By-Owner (FSBO) Selling

For-Sale-By-Owner, commonly abbreviated as FSBO, means you sell your home without hiring a real estate agent. You handle all aspects of the sale yourself: marketing, showing the property, negotiating with buyers, and managing paperwork. According to the National Association of Realtors, approximately 7-8% of homes are sold FSBO, though this percentage has declined in recent years as the process has become more complex.

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The financial appeal is obvious: you eliminate the 5-6% agent commission. On a $300,000 home, that's $15,000-$18,000 that stays in your pocket. However, this financial benefit comes with significant responsibilities and challenges. You need to price your home appropriately, which typically requires understanding comparable sales in your area. You'll need to market the property yourself, which might involve creating online listings, arranging professional photography, hosting open houses, and advertising through various channels. You'll also need to handle all negotiations directly with buyers and their agents.

One practical challenge is that many buyers access homes through real estate agent websites and the MLS. Homes listed FSBO may only be visible on general websites like Zillow or Craigslist, or through your own marketing efforts. Some buyers specifically search the MLS, which means your FSBO listing might be invisible to them. Many real estate agents also discourage buyers from making offers on FSBO homes because they don't receive a buyer's agent commission.

The legal and financial paperwork involved in selling a home is substantial. You need to handle the purchase agreement, disclosure documents, title search, inspection negotiations, and closing arrangements. Many FSBO sellers hire real estate attorneys to help with these tasks, which typically costs $500-$2,000. Even with an attorney, you're managing the process yourself, which requires significant time and knowledge of real estate law in your state.

FSBO selling works best when you have real estate knowledge, your home is in good condition and priced appropriately, and you have time to dedicate to the process. It can be challenging in slow markets or if your home has significant issues that require negotiation with buyers.