How to Sell a House By Owner in Texas (2021 Update)

Selling a house For Sale by Owner (FSBO) in Texas can save you 2.6% to 6.0% in realtor commissions. But prepare for a lot of work, including filing the required paperwork and learning about your local market to make the most from your sale.

In Texas, the average commission rate is 5.2% to 6.0%. If you sell a house worth $224,000 — the median home value in Texas — that’s up to $13,400, which is a huge chunk of your potential profits.

Selling without a real estate agent, known as listing For Sale By Owner (FSBO), is a viable option for experienced home sellers who are willing to put in the time and effort.

However, selling FSBO has risks. Research shows that FSBO homes typically sell for about 6% less than those listed with agents. In addition, FSBO homes often take longer to sell, and are more likely to fall out of contract after accepting an offer — unless the homeowner is experienced and knowledgeable about the process.

In this article, we’ll explain everything you need to know to successfully sell your house without a realtor: the ins and outs of Texas realtor fees, paperwork, and tips to walk away with more from your sale.

What FSBO Sellers in Texas Need to Know

Real estate laws, processes, and trends vary greatly across the country. Understanding the details of your market and getting accurate information can make a FSBO sale complicated.

We'll go into more details about what you need to do in Texas, but here's an overview of the state's laws and regulations.

Texas FSBO Overview

How to List Your Texas Home for Sale by Owner

Once you've decided on a price, it's time to write a listing description that speaks to local buyers. Understanding their priorities will help you identify what features of your property to highlight in your listing and attract more interest.

Top Buyer Priorities in Texas

When it comes to advertising and posting your listing, you have several options as a FSBO seller. Each choice has its own pros and cons as well as costs:

• For Sale By Owner yard sign: You can buy a sign from most hardware stores or online for $20-$50. Be sure to choose one that allows you to add your phone numbers so interested buyers can contact you for property information and showings.
• Craigslist: Posting your home on Craigslist is free and simple. Just go to the Texas page, find your city, and create a "real estate — by owner" listing.
• FSBO websites: There are multiple FSBO listing websites that allow you to post your home for free or a few hundred dollars. But each differs in how many photos you can include, how long the listing is live, and the changes you can make — do your research before choosing a for sale by owner site.
• Flat-Fee MLS companies: Flat-fee MLS services will list your house on your local Multiple Listing Service (MLS) for significantly less than a realtor. However, they provide few additional services unless you opt for their most expensive packages, which often cost more than using a discount brokerage.

If you choose to use a flat-fee MLS company, you'll have to offer a buyer's agent commission. The MLS is how real estate agents find homes for their clients, and typically a buyer's agent commission is included to incentivize these realtors to show the house to their clients.

How Realtor Commissions Work In Texas

Traditionally, both the buyer's agent and the listing agent are paid a commission by the homeowner. When sellers work with a realtor, they negotiate a commission as part of the listing agreement.

Based on the average commission rates in Texas, this typically ranges from 2.6% to 3.0% of the sale price.

In a typical sale, the seller also agrees to a commission rate for the realtor who brings the buyer to the table, which runs between 2.6% to 3.0%.

As a FSBO seller, you automatically avoid paying a listing commission. However, there is a solid argument for offering a buyer's agent commission.

A buyer’s agent's commission is an incentive for realtors to show your house to their clients. If you don't offer a commission that is competitive compared to similar homes in your area, then your home could be shown less. Agents may prioritize taking buyers to homes with a commission.

The best way to avoid paying any commission fees is to sell to an unrepresented buyer. However, know that nearly 87% of buyers work with a realtor. If you decide not to offer a buyer's agent commission, you may severely restrict your pool of buyers.

>> LEARN how real estate commissions work

How Commission Costs Break Down in Texas

Paperwork to Sell a House by Owner In Texas

Once you find a buyer for your house, it's time to start the closing process. In a typical real estate transaction, your agent will make sure you fill out all the necessary documents and forms. As a FSBO seller, you'll have to navigate the paperwork by yourself.

This process varies by state — here’s a quick breakdown of Texas’s requirements.

Required for All Texas Real Estate Sales

Possible Additional Documents

Texas Disclosure Forms

Many closing documents are legally binding agreements. Any errors can derail your sale and cost you thousands in fees or in costs to re-list your house.

To avoid an expensive mistake, consider hiring a real estate attorney. While this can cost $500-$5,000, an experienced lawyer can answer any questions you have along the way.

FSBO Pros and Cons

Before deciding to sell your home by owner, weigh all the pros and cons to make the right choice for your situation.

Pros

• More control: As a FSBO seller, you can decide the price, listing timeframe, showing schedule, marketing strategy, negotiation tactics, and more.
• No competition with other clients: Some agents take on more clients than they can handle, which could mean not getting the attention you need to meet your home-selling goals.
• Lower commission: As a FSBO seller, you could sell your home without paying any commissions. Based on Texas's average commission rates, that could leave 2.6% to 6.0% of your sale price in your pocket. Even if your buyer has an agent, you'll still avoid paying 2.6% to 3.0% in listing commissions.

Cons

• No MLS access: Unless you pay for a flat-fee MLS service, your home won't be on the local MLS. Most agents use MLSes (not Zillow and Trulia) to find properties for their clients and most buyers work with a realtor. So if you're not on the MLS, fewer buyers will see your listing.
• Risks of inaccurate pricing: Many FSBO sellers find it difficult to be objective when pricing their house and list for too much. If you make this mistake, you won't attract buyers and the listing will become stale. Eventually, you could be forced to accept a low offer or take your home off the market and relist with an agent.
• Safety issues: As a FSBO seller, it will be your responsibility to show your home to prospective buyers. Not everyone is comfortable being alone with strangers in their homes since incidents such as theft or harassment can occur. Make sure to gauge your own comfort levels before deciding to sell FSBO.
• More work and stress: Selling a home is a full-time job. Trying to cram all the steps and responsibilities into your schedule is a hassle many FSBO sellers aren't prepared for.

FSBO Alternatives to Consider

If saving money is your main reason for selling your home by owner, there are alternatives. Consider the following lower-cost options (listed from least expensive to most):

Flat-Fee MLS Services in Texas

As mentioned before, a flat-fee MLS service will post your listing on the local MLS, usually for a low, upfront fee. In Texas, this will typically cost you a couple hundred dollars.

Here are some Texas flat-fee MLS companies to compare:

>> LEARN about flat-fee MLS services in Texas

Clever Real Estate

Clever is a nationwide real estate service that connects sellers with top, local agents. You pay Clever nothing and only pay your full-service agent $3,000 (or 1% on homes over $350,000) if and when your home sells.

>> LEARN more about Clever Real Estate

Discount Real Estate Services in Texas

While pricing and services vary, discount real estate companies will help you sell your house for less than a traditional realtor. In most cases, you'll still need to offer a competitive buyer's agent commission, but you'll save on listing fees.

>> LEARN about discount real estate services

iBuyers

iBuyers will buy qualifying homes for cash, meaning you avoid realtor fees — and the stress of listing on the open market entirely. While these companies make fair-market offers, they will deduct any required repairs after an on-site visit. They also charge a service fee typically ranging between 6-14%.

>> LEARN about iBuyers

5 Tips for Selling Your Home Without a Realtor in Texas

Pulling off a FSBO sale successfully is a difficult feat to accomplish. Here are some helpful tips from Clever CEO and real estate investor Ben Mizes, who has experience listing homes without an agent.

1. Make Minor Repairs

Small upgrades and repairs can do a lot to sway potential buyers. The key is knowing how and where to spend your money to get higher offers. Simple DIY projects like a fresh coat of paint or new cabinet pulls have a high return on investment, whereas pricier improvements like adding a new bedroom may not.

Overall, the most important factor is knowing where the line is between necessary and over-the-top. You want your house to meet buyers' expectations.

"If your kitchen is a disaster, spending more money on a remodel to get it in solid condition will pay off in the end," said Mizes. "But spending money on high-end features to take it from good to extravagant will be a waste."

Also consider how valuable specific repairs are to buyers in your area. Focus on upgrades that have a higher cost recuperation in your region.

Home Repairs with Highest Resale Value in Texas

2. Price Your Texas Home Competitively

All across Texas, the housing market has been slowing down, which isn't the best news for sellers. It leaves little room for error when pricing your house.

If you price too high in a buyer's market, your house won't garner any interest. With so few buyers, there's little chance you'll attract multiple offers even if you strategically price lower.

Pay close attention to comparable homes in your area and how they're performing on the market. Look at what they were listed for, how long they were on the market, and what they finally sold for. This will show you trends in what prices attract buyers quickly.

3. Stage and Market Your Home

Your listing is going to speak on behalf of you and your home before you get the chance to. The photos that you take will resonate more than any of the amenities that come with your house. The way you set it up, the photos you take, and how you list your home all impact the kind of attention you get.

You need to stage professional photos to add to your listing. However, those photos can't be staged unless you have a clean and furnished home for potential buyers to see. When you're in the process of moving or have already moved to a new home, you might have left your home empty before the sale.

Instead of leaving it empty, you could hire a company to set up and stage it. In Texas, homeowners are going to want to see lots of space and lots of light. By staging the home properly, you'll also give your buyers exactly what they were expecting when they come to view the home. Additionally, when the market is slow, a well-staged home can help you sell faster and for more money. However, this could cost you several hundred dollars a month per room to fill it with the right furnishings.

>> LEARN how much it costs to stage a home

4. Prepare for Showings

Organization is key when showing your home to potential buyers. You'll need a good system for scheduling showings and saving buyers' and agents’ contact information. You'll want to be flexible and try to show your house at buyers’ convenience.

Keep the home clean and decluttered at all times. The last thing you want is to scramble around with a vacuum after a buyer calls for a last-minute showing.

Also, focus on creating a homey atmosphere for buyers. You want to make a great first impression on as many buyers as possible, so add little touches that speak to most people.

"Bake cookies or light scented candles before a showing," advises Mizes. "Smell plays a huge part in how buyers will perceive and remember your house. Use comforting scents to your advantage so they feel at home the moment they walk through the door."

5. Negotiate for the Best Possible Price

Negotiations are about deciding more than the final sale price. You and the buyer (or their agent) will also have to agree upon contract contingencies, how closing costs are divided, the timeline, and more.

To gain the upper hand, get creative with the seller concessions you offer a buyer. While they might cost you a little more at closing, concessions sweeten the deal for buyers and could lead to a higher final sale price.

The most popular concessions vary from market to market. Knowing what works with buyers in your area will help you strengthen your offer.

For example, a 2020 Clever survey of over 500 real estate professionals found that in Texas, sellers often cover 1.2% to 1.8% of buyers' closing costs. On a home of median value, that equates to $2,688 to $4,032, but can help you close the deal sooner and for more money.

You should also consider offering these popular seller concessions:

Most Common Seller Concessions in Texas

Conclusion: Is FSBO Right for You?

FSBO isn't a perfect fit for everyone. But now that you know what awaits, if you're feeling confident about all the steps and possible challenges, you might be ready to sell without a realtor.

Remember, to succeed at selling a house by owner you'll need to:

• Make a plan: From getting photos of your property to lining up the correct paperwork, there’ll be a lot on your FSBO to-do list. Work out a schedule for when you need to accomplish everything so you can find a buyer and close in a timeframe that works for you.
• Get ready to hustle: Attracting qualified buyers is hard work. You'll need a great listing description and a killer marketing strategy to generate interest. Also, prepare to spend a considerable amount of your time fielding calls from prospective buyers, handling showings, hosting open houses, and more.
• Make smart investments: Even though your main goal as a FSBO seller is saving money, spending some money on small upgrades or repairs can lead to higher offers and a faster sale. Also, consider paying for a flat-fee MLS service to list your home on the local MLS to reach more buyers.
• Seek some professional advice: You don't have to sign a listing contract to talk to a realtor. Professional agents understand that smart sellers weigh their options; they'll be willing to meet for a free consultation. After seeing your home and looking at comps, they might notice issues or advantages you overlooked. Once you've heard their advice, if you still want to sell by owner, you can do so confidently because you thoroughly explored all your choices.

If you'd like some professional guidance with no strings attached, Clever can help. Fill out your basic info below to connect with a top, local realtor for a no-obligation consultation.

Additional Resources for Texas Home Sellers