For Sale by Owner in Texas, Part 1: What You Should Know Before You List

For most people, their home is the biggest investment they’ll ever make. Some sellers choose to sell on their own, without the help of a listing agent. It can be done, and some people do it successfully. Others miscalculate, leave money on the table, or run into problems they didn’t see coming.

Selling a home is a lot more than putting a sign in the yard and posting an ad. It’s a string of jobs that run from the first phone call to the day you hand over the keys, and each one has a few places where things can go sideways.

If you’re thinking about it, here’s an honest look at what the whole process involves, and where to turn for help and resources along the way.

The paperwork comes first

The contracts most agents use come from the Texas REALTORS® association, and those are for members only. The Texas Real Estate Commission (TREC) publishes its own standard contracts and addenda, free to anyone at trec.texas.gov. You’ll need the right contract for your situation, plus whichever addenda apply. Common ones include:

• The Third Party Financing Addendum, when the buyer is getting a mortgage
• The Addendum Concerning Right to Terminate Due to Lender’s Appraisal, which can let the buyer back out if the appraisal comes in low
• The addendum for a property with a mandatory HOA
• The notice for a property in a public improvement district or special assessment district
• The lead-based paint addendum, for homes built before 1978
• The addendum for the sale of other property by the buyer
• A back-up contract addendum
• A seller’s or buyer’s temporary residential lease
• The non-realty items addendum
• A mineral reservation addendum
• A seller financing addendum

This isn’t a complete list, and your sale may call for others. Not every one of these applies to every sale, but you need to know which ones apply to yours. Always download a fresh copy; TREC updates its forms, and an old saved version can cause problems.

Texas law also requires most sellers to give the buyer a written Seller’s Disclosure Notice. TREC has a free version. Answer from what you actually know, and if you’re not sure, say so. Selling “as is” means you won’t make repairs. It doesn’t let you leave a known problem off the form. Most disputes after closing start with something the seller knew and didn’t mention.

Pricing is harder than it looks

Here’s something many Texas sellers don’t realize: Texas doesn’t require sale prices to be made public. That’s why online estimates for the same house can be tens of thousands of dollars apart. They’re working from incomplete information, and buyers will pull them up anyway.

• Don’t rely on the appraisal district. Its square footage and room counts are often wrong, because homes aren’t measured by a professional appraiser at the time of the tax assessment. Its value is set for tax purposes and may not reflect current market value, so don’t use it to price your home.
• Be careful with asking prices. What other sellers are asking isn’t the market. Closed sales are, and those are hard to find without access to the MLS.
• Consider a pre-listing appraisal. As a former appraiser, I can tell you a licensed appraiser’s report gives you a defensible starting point. You can verify any Texas appraiser’s license on the Texas Appraiser Licensing and Certification Board website.

The first few weeks are when a new listing gets the most attention. A price that’s off from the start can cost you that window, and it’s hard to get back. You’ll also need to watch the activity closely and know when the market is telling you to adjust.

Getting the house ready

Before anyone sees it, the house needs to be at its best. That usually means finishing small repairs, deep cleaning, clearing out clutter and personal items, and improving the curb appeal. Some sellers bring in a stager, or at least rearrange furniture so each room shows how it can be used. Decide early which repairs you plan to make before putting the house on the market.

Marketing is a whole process

Marketing isn’t one task. It’s several, and they all have to work together.

• Photos and video. Buyers decide online whether a house is worth seeing. Professional photos, video, drone shots, and a floor plan make a real difference, and phone pictures usually fall short.
• The description. Your description is often the first thing a buyer reads after the photos, and it shapes whether they want to see the house in person. It should help them picture living there, not just repeat the room count they can already see in the listing details. It also needs to be accurate. Overstating features, square footage, or condition can come back to haunt you once a buyer’s inspector and appraiser get involved.
• Fair housing in your ad. Owners selling their own homes are exempt from parts of the federal Fair Housing Act, but the rules on advertising still apply to you. Your ad can’t state or suggest a preference for, or against, buyers based on race, color, religion, sex, disability, familial status, or national origin. Phrases like “perfect for a young couple,” “great for families,” or “walking distance to the church” can cross that line, even if you don’t intend them that way. Describe the house and its features, never the kind of person you think should live there.
• Getting it seen. Most buyers and their agents search the MLS and the big home search sites that pull from it. Owners can’t post to the MLS themselves, so you’ll need to figure out how to get in front of those buyers.
• Signs, open houses, and social media. Each one takes planning, time on your weekends, and a way to keep track of who saw what.

Some owners pay a limited-service brokerage a flat fee to put their home in the MLS. If you go that route, know that you’re no longer selling entirely on your own. You’ve technically hired a broker, even if that broker does little more than enter the listing.

Read the agreement closely, both for what the broker will and won’t do and for what it requires of you. It’s a listing agreement, with its own fees, term, and cancellation terms. Your home’s listing will be expected to follow MLS rules, and you’ll need to keep the information accurate and report changes like a contract or a price reduction on time.

Being in the MLS also means cooperating with other brokerages. Agents will call to schedule showings, send offers, and negotiate on their buyers’ behalf, and with a limited-service broker, you’re usually the one handling those calls yourself.

Also know that local MLS rules require every agent who shows your home to have a written agreement with their buyer. That agreement typically spells out the level of service the buyer has signed up for and how much their agent will be paid, which is one more reason to decide early what you’re willing to contribute.

Calls and showings

Once your home is on the market, your phone becomes part of the job. You’ll field calls and messages, many of them from investors, curious neighbors, and people selling services. You’ll schedule showings around your own life and keep the house ready on short notice.

Safety deserves real thought, because you’ll be letting strangers into your home.

• Know who’s coming. Get a full name, phone number, and email address, since most contract negotiations end up happening by email. Ask for a loan preapproval letter or proof of funds before you schedule a showing.
• If you show it yourself, don’t do it alone. When a buyer’s agent is showing your home, you typically won’t be there. But if a buyer without an agent wants to see it, have someone else with you, and let a friend know when the showing is happening.
• Put things away. Lock up medications, jewelry, mail, spare keys, and anything with personal information on it.
• Skip the traditional combination lockbox on a house you’re living in. It’s generally not advisable, since anyone with the code can get in at any time, and codes can get passed around.

After each showing, follow up and ask what the buyer thought. If you keep hearing the same thing, it’s telling you something about the price or the condition.

Buyers’ agents

Many buyers work with an agent, and that agent represents the buyer, not you. Recent litigation and changes in industry practices mean most buyers now sign a written buyer representation agreement before they start looking at homes. That agreement creates a formal relationship with their agent and spells out what the buyer has agreed to pay that agent.

Here’s how that affects you as a seller:

• Expect a compensation agreement. Before an agent shows your home, they’ll usually ask you to sign a compensation agreement. It’s a standard form that confirms they represent the buyer only, and it states what, if anything, you’ve agreed to pay toward their fee if their buyer purchases your home. Signing it doesn’t mean the agent works for you. An agent showing your home represents the buyer, not you. As with any document, read it before you sign.
• Decide ahead of time what you’ll pay. Buyer’s agent fees are negotiable. They aren’t set by law, and offers of compensation can no longer be posted in the MLS. You can be willing to pay some, all, or none of it, but think it through before the calls start, not while an agent is waiting at your door. Whatever you discuss up front, the binding agreement on what you’ll pay comes through as one of the terms of the contract when an offer is presented.
• Understand the trade-off. If you won’t contribute, the buyer may owe their agent out of pocket. That makes your home less attractive than homes where the seller is willing to help, and some buyers will pass on it altogether. Depending on your home’s price point, some buyers may not be able to qualify for the purchase if they also have to cover their agent’s fee.

Some sellers expect a buyer’s agent who shows their home to promote it or talk up its value to the buyer. That isn’t the agent’s job. A buyer’s agent represents the buyer and looks out for the buyer’s interests. What a seller agrees to pay a buyer’s agent has nothing to do with representing the seller’s home. It compensates that agent for the time and work they put into the deal on behalf of their buyer.

Getting your home priced, prepared, and in front of buyers is a big job, and how well it’s done shapes everything that follows.

If you decide you’d rather not take it on yourself, I’d be happy to help.