3 Ways to Sell Your Home
If you are ready to sell your home, need to sell your house soon or are thinking about selling in the near future, you have some planning to do. One of the most important decisions to make is how you intend to sell the property. Some homeowners think there is only one way, but you might have more options than you realize. Below are the three most common methods for selling real estate. Which is right for you will depend on different factors. Under each home selling method, we will outline some of the pros and cons to help you make the best decision.
1. Hire a Real Estate Agent
This is the most common way to sell a house and it would be considered the most “traditional” home selling method in today’s real estate market. Take the time and talk with multiple real estate agents to find someone who you trust. This is generally the best option to sell if you have the time and are willing to invest some money in order to make more money during the final sale. It may be worthwhile to make necessary repairs, clean up the property and invest in strategic upgrades that can boost the value of your property.
Your real estate agent will help you with staging and marketing the home. The goal is to present the property in its best light and generate as much exposure as possible. Then, interested buyers will come and tour the house to see how they like it in person. Ultimately, you will get an offer (ideally multiple offers) and you negotiate with the buyer and the real estate agents to finalize the terms of the contract. The property goes into the closing/escrow process while the buyer’s funding is approved (assuming a mortgage loan is being used for the purchase).
Naturally, this process can take awhile to get through each stage and you may find yourself spending money upfront to get the property ready for the market. Then, of course, you are paying for the real estate agents’ commissions (including the buyer’s agent) and other fees/closing costs associated with the transaction. The average traditional home sale will take 3-6 months to complete. However, if you have the time and money, it will likely net you the biggest return on your investment.
2. For Sale By Owner
The next option is to sell the house yourself without hiring a Realtor®. How much time or money you want to put into preparing and marketing the property is up to you, though it is recommended to make some effort in order to attract more buyers and maximize the value of the house. You can find places to list the property online, in classified ads or just put a sign up in your yard and hope it draws attention.
The main benefit of going for sale by owner (aka “FSBO”) is to avoid having to pay the real estate agent’s commission. You will still be responsible for certain closing costs and fees (possibly including the buyer’s agent’s commission—read the offer/contract carefully). Selling your house on your own is only recommended if you have experience and confidence that you are making the right decision. Many homeowners try to go FSBO and end up wasting a lot of time and money when they don’t get the offers they were expecting. Then, they often break down and hire a real estate agent anyway. Unless you really know what you are doing and/or are okay with the process possibly taking longer, you may want to think twice about selling the property without a Realtor®.
3. Sell to a Real Estate Investor
Lastly, this the the home selling solution that is most overlooked by home sellers. The assumption is that is only meant to be a “last resort” option for homeowners who are desperate to sell because of financial distress. They are trying to avoid foreclosures or tax defaults, or they need to sell quickly for some other reason (divorce, job relocation, unwanted inheritance, unwanted investment property, etc.). This is often true, but these are not the only scenarios where selling to a real estate investor is beneficial.
The main drawback of a cash sale to an investor is that you won’t be offered as much money for your house as you would likely get on the open market during a traditional sale. The buyer is paying for a simpler and faster transaction, free of the complications that are generally associated with a mortgage-based purchase. A real estate investor will have cash in hand or a solid source of funding, so you aren’t waiting on a mortgage loan to be approved by the lender. This shortens and simplifies the closing process significantly. What might normally take months can be completed in weeks. It’s a trade-off you are making as a home seller. You might be willing to accept a lower price in order to sell sooner and/or avoid a complex closing period.
It’s true that this is typically the best home selling solution for someone who is in financial distress and doesn’t have the time or money to go through the standard selling process. Some homeowners may opt for this simply to avoid working with a Realtor® and dealing with a bunch of tire-kicking buyers walking through their home. Though you are selling for less, you also have to keep in mind the money you will be saving. You won’t be paying upfront for repairs (most cash investors buy homes in as-is condition). You won’t be paying real estate agent commissions and a number of other standard closing costs. You will also be saving on other homeownership expenses. If it takes 3-6 months to sell your house the normal way, that’s 3-6 more months of mortgage, insurance, property tax and utility payments. Some cash sellers may even end up better off with a fast cash sale. Run the numbers for yourself after you get a cash offer from an investor. It may be a better deal than you realize.
In addition, some real estate investors and investment firms like PropertyLark may be willing to work with you on other selling or creative seller financing solutions such as subject-to financing. A cash deal isn’t always the best option for both sides.
If you want to explore all your home selling options, contact PropertyLark today. We can make you a fast and fair cash offer for your house, or we can guide you through a more traditional process. Our team will help you make the best decision and find the ideal solution for you and your family.