How Selling Your House To A Real Estate
Investor Stacks Up Against Your Other Choices.
See below for the Pros & Cons, costs and timeline of each option
So, you need to sell your house. Selling in today’s market can be frustrating and time consuming. With other houses on the market, it gives buyers out there more choices…and sometimes sellers can wait 6 months or more to sell their house, for a price they feel is fair.
This brief guide will walk you through the decision process to help you decide what’s best for you. Do you go the traditional route and work with a Real Estate Agent, sell it yourself, For Sale By Owner (FSBO) or sell it to a Real Estate Investor?
Each of these strategies have different pros and cons.
It’s your home…so you decide which option is best for you.
The 3 Options For Selling Your House
1.) Working With A Real Estate Agent
This is the most popular way to sell a house. The process of working with an agent is…
-
- You contact an agent and they visit with you at your house to determine what they feel it may sell for.
- You sign a listing agreement with the agent (normally 6 months) where they exclusively represent you and they try to sell your home.
- The agent lists property on the MLS, markets it and takes buyers through your house for showings.
- If a property sells…the agent takes care of the negotiations with the buyer and the all of the paperwork.
- Then the agent collects their fee, which is negotiable but usually 4% – 6% of the sale price of the house.
Agents know the market and have direct access to the MLS, which is the main way houses are listed when selling the traditional route.
Pros:
Agents know the market well, have access to the MLS to list your house to expose it to a broad range of retail buyers. They’ll take care of the marketing, showing the property, and putting together the documents.
Cons:
It can be expensive. An agent’s commission is paid out of the proceeds of the sale at closing. You, as the homeowner are responsible for the costs of the house while it’s on the market. If it takes 6 months to get to the closing table, that’s 6 more months of mortgage payments, 6 more months of real estate taxes, 6 more months of homeowners insurance and 6 more months of utilities & upkeep. The seller will also pay for their real estate attorney and New York State Transfer Tax.
There will be many buyers that want to look at your home, some qualified and some not qualified. Your agent will also want to schedule an open house. Your home must be kept clean and tidy for each showing and you should put away all of your valuables.
Most real estate transactions are subject to the buyer getting mortgage approval. This means that if the buyer is not approved…the seller must return the all of the deposit monies back to the buyer and start the process all over.
2.) Selling Your Home Yourself (FSBO)
The general process of selling a house on your own is…
- You determine the value of your home. Sometimes this can be tricky…so you can hire a professional appraiser or ask a local real estate agent who is willing to give you a value.
- Take pictures of the house and jot down all of the details of your home for marketing purposes (style of home, bedrooms, baths, square footage, features, property size, etc.)
- Then, you market it. Since marketing is your responsibility…you can do as much or as little as you want.
- Put up a For Sale sign in your front yard.
- You handle the showings, offers, qualifying the buyers and the paperwork that needs to be sent to both attorneys.
- Follow up with the buyers mortgage company until they get an approval.
- If all goes well…you get to the closing table and you save the commission.
This can be a very attractive way of selling your home if you’re familiar with the real estate sales process, are a good marketer and are able to stay on top of the deal.
Pros:
You can save a big chunk of money by not paying real estate commissions. You have control and full responsibility over the whole process.
Cons:
It’s a lot of work to sell your own house. If you’re not comfortable and experienced in the process of selling a house like handling the paperwork, valuing your house, negotiating, etc… you could end up in over your head and it could cost you more than working with an agent.
You are showing your home to strangers…and you don’t know if they’re qualified to purchase or if they are there to steal your valuables.
The biggest reason more deals fall through when selling on your own is qualifying the buyer. Most homeowners will take the deal where the buyer offers the most money for your home. This is not always the best deal. If you don’t get to the closing table…you have to start all over.
Usually it takes longer for a FSBO transaction to close is because there isn’t an agent involved. An agent knows how to get to the closing table a lot sooner.
3.) Selling Your House To A Real Estate Investor
A third option for selling your house is to work with a local real estate investor who buys houses. The Investor usually fixes them up and then sells them or holds onto them as a rental property. The general process of selling your house to a real estate investor is…
- You connect with the investor and submit your information about your house and situation to them.
- The Investor will evaluate the house and come up with a value for it. They will determine if any repairs are needed and make an offer that’s fair for them and fair for you.
- You look at the offer and decide if it works for you. If the numbers work, they will enter a contract immediately.
- Once the contracts are signed, a title report is ordered. If the title comes back clear, the investor can close immediately (usually 7-14 days…unless the seller wants to delay the closing)
This is the option that many sellers go with when they need to sell their house fast with little hassle.
Pros:
When you sell your home “All Cash” you don’t need to worry about your home not appraising; a buyer getting denied for a mortgage; or any town issues.
You are selling your home in “As-Is “condition which means you don’t need to repair anything or clean anything. You take what you want to take and leave the rest.
You don’t pay a commission so your closing costs are very low.
Cons:
You are selling your home for a discount to avoid the hassles of waiting for a ready, willing and able buyer to come along.
Thank you for taking your time and reading this guide. Let me introduce myself…my name is Evan Greene. I have over 25 years of real estate experience. I am a licensed Broker/Owner of a local Re/Max office in Suffolk County. I’ve been buying and flipping homes for about 3 years and have purchased over 120 homes on Long Island. Click HERE to see a list of these homes. I can offer my clients the best of both worlds…meaning I can help sell your home on MLS or I can buy it for cash. If I buy it for cash…there is no commission. Please fill out the QUESTIONNAIRE and I will call you at my earliest convenience or call me directly (631) 848-8000.