When I shopped for my first home some years ago, it shocked me by how much of my money went towards commission. I grew up to real estate chatter at the dinner table. It seemed sacrilegious to lose that much with every transaction. This is the 21st century!

So, I borrowed a book titled “How to Buy a House” from the library.

I later got licensed, started my own brokerage, and learned the transaction process by representing relatives & friends. I was moonlighting towards my real ambition, a platform for regular people to sell homes for a nominal fee.

My platform never took off. Residential agents charge 5 to 6% of the sale price in the US, which sums up to over $80 billion in commissions. As prices rise faster than incomes, growing fees exacerbate housing unaffordability.

In the San Francisco metro, commission on a home now exceeds six months of gross income.

Many consumers don’t even realize it’s legal not to hire an agent. If they don’t have a referral, most click on agent ads placed next to listings on Zillow and go with the first agent who responds. 28% of sellers do try to negotiate fees with their listing agent, but discounts are rarely given. Since fees are customarily split 50/50 with the buyer agent, neither the seller nor their listing agent want to risk getting the cold shoulder from the buy side.

Still, 11% of sellers complete their sales without a traditional listing agent. I surveyed, interviewed, or interacted day-to-day with hundreds of these “DIY sellers.” The top challenges they report are, in descending order:

Fending off listing agents — Every DIY seller gets approached by agents first claiming to have an interested buyer, then asking to be hired instead. In fact, most get more agent pitches than real buyer inquiries. Each time, the agent hacks away at the seller’s confidence, e.g. by saying some aspect of their sale is being mishandled. I spent a lot of time placating nervous sellers and fielding requests for trivial listing edits. Accessing the “right” paperwork — If you’ve ever bought or sold real estate, you might remember the tall pile of “disclosures” your agent had you sign. The law usually requires a few pages of disclosure forms. The pile comprises mostly of disclaimers and advisories protecting brokers and agents. Realtor associations, which are trade groups, restrict the use of those forms to members only. Not even real estate lawyers have access. Getting buyer agents interested — Many DIY sellers start by talking only to buyers without agents, hoping to avoid a 2.5–3% buy side commission. But half eventually sell to a buyer with an agent. Most brokerages won’t let their buyer agents do a deal without “full disclosures.” So, the buyer agent has to do extra work, providing those forms and getting the seller to fill them out. Also, the seller often needs a listing in the local MLS to reach buyer agents in the first place. This involves paying a “flat-fee broker” to manually create a listing and make any edits. Life getting in the way — Despite the economic recovery, it takes months to sell a home in most markets. Some sellers overestimate their stamina to answer calls, texts, voicemails, and receive visitors week after week. One of my sellers got pregnant, and could no longer walk down her driveway to put up her open house sign!

(NOTE: If you’re actually in the market and I haven’t scared you away from selling your property the DIY way, I go into more detail here.)

One of my sellers does Tough Mudder races in his free time.

My platform attracted lots of house flippers, investors, and other repeat sellers who knew the process well. But, I also kept bumping into veterans, utility line workers, and even Uber drivers amongst successful sellers. Most knew little about real estate before their sale. But their resourcefulness proved more valuable than business experience. In fact, one of my unsuccessful sellers was a Fortune 500 exec with a top-ranked MBA & PhD!