3 Options for Selling your House
You need to sell your house fast but aren’t sure what the best option is for you and your current situation. This article will explain the 3 primary ways to sell your property and what each means to you.
Option #1: Selling with a Real Estate Agent
Agents are great if you have plenty of time to sell and your house is in excellent condition.
There are thousands of agents in the Bay Area, so the first challenge will be to pick one that has successfully closed some deals and is experienced. Your Agent will likely walk through your property and give you advice on what should be fixed, cleaned up or removed.
Then you’ll sign a 6-12 month listing contract and they’ll put it on the MLS (Multi Listing Service). Most agents will charge 6% or more depending on the situation for there services. They will handle all the calls, lots of paperwork, qualify the potential buyers, and present you with the offers.
Once your property hits the MLS the fun begins! You’ll have 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.
When a buyer is found, which takes 3 months on average, 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. After these inspections are complete most buyers will give you a list of items that they expect you to fix, or they may ask for a large price reduction. If you don't agree the buyer can walk away and you're back to square one.
After you get past the inspection period, the buyer’s lender will order an appraisal to ensure that the value of the property is acceptable to the lender. The appraisal process, which used to be fairly routine, is now causing many lenders to retract their offer to fund the mortgage. Appraisers are more cautious with their valuations considering the current market, this change in sentiment does not help you sell your house fast.
Once you get past all of these steps you can finally close on the sale, traditionally the buyer and seller split closing fees, which can cost you roughly 2-4% of the sales price, and are taken out of your proceeds.
Agents are great if you have plenty of time, your house is in excellent condition and you don’t mind people coming to your house continuously. They will work to get you the highest gross price for your house (before commissions, repairs, closing costs, time on market) however after all of the additional costs you will incur going this route may not provide you with the most money in your pocket.
Option #2: For Sale by Owner (FSBO)
Selling your home "by Owner" is very similar to Option #1; the 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 and are comfortable with handling the sales process. It may take longer to find a buyer as you won’t have thousands of agents seeing and potentially showing your house to buyers. Things can get frustrating as you are responsible for the whole transaction and most likely don’t have prior experience selling a house. FSBO's work fairly well for sellers that have the time and patience to do the work needed.
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. Someone that is willing to work with you and go the extra mile to get your house sold fast and with no stress on your part. Real estate investors handle all of the paper work; the only thing you need to do is show up on the day of closing and collect your check.
Most investors buy houses in ‘As Is’ condition, meaning you will not need to do any repairs prior to moving, you can even leave unwanted items in the house and they will remove. Investors also focus on closing fast, unlike the options listed above; an investor can close the sale in as little as one week, allowing you to move on with your life.
Another advantage to working with an investor is that they generally make all cash offers; this eliminates the possibility of an appraisal causing the loan to fall through. When an investor makes you an offer you can be confident that the money is there to close the deal.
Working with an investor also means there are no Agent commissions to pay, and in most cases they will cover all closing costs.
Choosing this option to sell your house works well for people who need to sell fast or anyone who simply doesn’t want to deal with the hassle of the selling process. Investors focus on structuring deals that work for all parties involved.
So what option is best for you?
Now that you have a little more knowledge on the 3 options for selling your house you can make an informed decision on which one to pursue given your current situation. Please don’t hesitate to give us a call or fill out the form to the right if you are interested in a free, no obligation, consultation on selling your house.