Option #1: Selling with a Realtor
Realtors are great if you have plenty of time to sell, and your house is in excellent condition. There are thousands of Realtors that have closed some deals and that are experienced. The realtors will likely walk through your property and give you advice on what should be fixed, cleaned up or removed.
Then you’ll sign a 6 month – 1 year listing contract and they’ll put it on the MLS (Multiple Listing Service). Most listing agents will charge 6% or more depending on the situation for this service. They will handle all the calls, lots of paperwork, qualify the potential buyers, and present you offers. Typically 3% goes to the agent that finds the buyer, and 3% goes to the agent that listed the property.
Once the property hits the MLS the fun begins! You’ll have lots of people coming into your home, looking around and checking every nook and cranny, 7 days a week, and quite possibly at all different times of the day, as everyone has different work schedules and time commitments. This means your house has to be spotless ALL the time. This can be very intrusive for most people.
Once a buyer is found, which takes on average 3-6 months, your agent will open escrow and the buyer’s “inspection period” will begin. During this period, several inspectors will come to your house and check EVERYTHING! This typically includes a home inspector, pool inspector, termite inspector, etc… After all of these inspections are completed, most buyers will give you a list (and we’ve seen some really long lists!) of items that they expect you to fix, or instead they may ask for a large price reduction. If you don’t agree to do it (or negotiate something they will accept), the buyer can walk away and you’re back to square one.
Once you get past the inspection period, the buyer’s lender will order an appraisal to ensure that the value and condition of the property is acceptable to the lender. This appraisal process, which used to be fairly routine, is now blowing up many traditional real estate deals. For example, we had a friend’s family member selling their house for $120,000, who had several buyers wanting it at $120,000. You would think that $120,000 would be a fair market price right? Wrong! Even though they had multiple offers at $120,000 which indicated that the buyers and their realtors thought it was worth that price, the appraisal came in at on $104,000. The appraiser decided to use bank-owned and distressed sales as comparables when calculating his value, rather than comparing it to other non-distressed remodeled properties nearby. This low ball appraisal will be attached to the property for several months. This left the family member unable to sell unless they dropped the price significantly.
Now, if the appraisal comes in fine, then you can go to closing. Usually the buyer and seller split closing costs, which can cost your roughly 2-4% of the sales price, and are taken out of your proceeds at the closing. Success… Sold!
Again, Realtors can be great if you have plenty of time, your house is in excellent condition, and you don’t mind people coming to your house continuously. The MLS will likely allow you to get the highest gross price for you house (before commissions, repairs, closing costs, time on market), and you will probably be represented professionally, as most realtors are pretty good at what they do.
Option #2: For sale by Owner (FSBO)
Selling your home “By Owner” is very similar to Option #1; the only difference is YOU have to do all the work. Market the property, find the buyer, show the house, negotiate the sale, write the contract and disclosures, and so on. Most buyers will need to get financing so there will be a risk of appraisal. There will still be closing costs and fees that need to be paid. This is a great solution again if you have time, your house is in great condition, and you are comfortable in handling the sales process.
The process will take longer as you won’t have 2000+ realtors seeing and potentially showing your house to buyers. Most FSBO sell at a lower asking price because of this. The process can be frustrating as you are responsible for the whole transaction.
Option #3: Selling to a Real Estate Investor
The key to selling to a real estate investor is to find someone you like and trust. There are so many ‘newbie’ investors that just finished a weekend seminar and are out to “get a deal” and prove that they are the next Donald Trump. This is NOT the type of person you want to “try” to purchase your home. Most are broke and have never purchased an investment home in their lives. You want an investor that is not only confident, but also experienced and capable of buying your house.
With experienced investors the process is going to be quick and easy. You’re not going to get the highest price possible with an investor, because they are running a business and have to make a reasonable profit to stay in business, but generally they are able to work with your situation a lot more because they don’t have to have appraisals, showings, have other buyers to deal with, etc… With the right investor they will make this process for you pain free and almost effortless.
In the end you have to look at your whole situation, and determine what’s best for you. If you find the right investor they are going to ask questions, try to understand your situation, and try to explain all of your options to help you make the best decision (and even tell you if they aren’t it).
What to do next?
Give us a call at 210-816-1426. We can set up an appointment for one of us to come see your property, do a free evaluation, and give you a no obligation cash offer. If we agree on a price and terms, we will open escrow and begin the title process.
Remember, we buy all properties “As-Is” and pay all closing costs and fees. The transaction will not cost you one dime out of pocket, and our team will make it seamless as possible.