Realtor Insider explores inside the mind of a Realtor to learn the hidden secrets of buying and selling real estate.
When it comes to selling your house in this market, there are really only three approaches to strategy: Easy, Traditional and something in between.
Now these strategy levels tie directly back to the ease of the seller in selling their house. You have easy ways to sell your house today. There is also a traditional way to sell your house today and a whole bunch of ways to do it that fall in between. The rewards for the seller (how much they make on the sale of their house) is in direct correlation to each level.
If you put a lot of effort in selling your house, you will most likely make a lot more money in the end than if you take the easy road.
This is a nice change of pace from the previous hundred years of real estate in this country. Before this modern age, if you wanted to sell your house, you really had very limited options. You could try to sell it yourself, or you could hire a Realtor to sell it for you. Either way, you found yourself doing a lot of work on your end to get the house ready to sell and all the extra chores you had to do during showings. It was not easy.
Today, things have definitely changed for sellers. It is still highly advisable for sellers to consult with a Realtor, or a few of them, to discuss options. A seller might be surprised by the many different strategies one can take to get a house sold today. It can be worth your time to listen to professionals who do this for a living.
With further ado then, let’s go over all the different strategies a seller can utilize when selling their homes today. Which strategy you employ depends heavily on your situation and your goals with selling your house. Each person will have a different reason for selling and want different financial rewards after selling it.
Sell to a Ibuyer company – Let’s start with the most easy way to sell your house in the history of real estate. You sell it to a Ibuyer company. What is an Ibuyer Company? These are corporations (aka OpenDoor, Offerpad, Perch, Knock, etc) who will buy your house after you fill out a form on the internet. They make a cash offer for the house, send out an inspector for a quick look and then purchase the house. Each Ibuyer company has different approaches to making the purchases. OpenDoor will just buy it outright. Knock will buy your house and let you live in it until you find another house to purchase, which they call a “trade-in” program.
Despite the means of doing it, for some sellers, the end result makes up a world of difference. They get their house sold quickly and without too much hassle.
What is the catch? You will most likely see a reduction of 15 to 18 percent off the market price of your house by doing it this way. There are no fool proof studies of this yet, but several Realtors have done quotes themselves to find out what the difference between what is offered by an Ibuyer company and the market rate of selling a property. Most have found this kind of reduction after all the inspections, fees and charges have been debited from the seller’s proceeds.
In other words, you take the easy road, you end up paying for it via less money. For some, this is fine.
Get your house in prime condition to sell via the MLS – One way to sell your house today is to go the traditional route. In this case, you meet with a Realtor who tells you what you need to do to get the house ready to sell, both on the inside and outside. You spend a couple of weeks doing it and then you put it on the market. In this way, the house presents itself nicely and we all know that presentation is key when you are attempting to sell something at top price.
While it is on the market, you have to keep the house looking as great as it did in the pictures. Showings will dominate your life while they are happening as buyers flock to see if the reality matches their expectations.
Once under contract, you wait for the buyer to inspect the property and come back to you with repairs. Once repairs are done, the buyer’s mortgage has to be approved. It can all be very stressful for even the most fun thrill seeker.
The end result, however, of all your work is that you make a lot more money when you close on your house. Buyers will pay top dollar for it because of the effort you have made into getting the house ready to be sold. In fact, you might even make more than you originally thought if you were lucky enough to have a multioffer situation where sometimes the prices can get high quickly.
In other words, you can laugh at the easy road all the way to the bank knowing that your investment into your house paid off in the long run.
Sell to an investor – Although real estate investors have been around for awhile, the many books and seminars making real estate seem easy and a way to get rich quickly are very widespread today. In fact, you most likely see a ton of signs on the road promising to buy your house with all cash and little hassle. The truth is that many of these investors are looking for specific properties that fit their criteria for making big bucks. If you are lucky, you might find one who is actually interested in purchasing your house, but this will be a much reduced price. It is not as easy as the Ibuyer companies because you will have to deal with a lot of back and forth negotiation. You then have to trust that the investor knows how to actually guide you in selling your home. Can you really make that leap of trust with a stranger?
Sell house as a fixer upper – You don’t have to do any work on getting your house ready to sell and instead sell it as a fixer upper. In this strategy, you still hire a Realtor and place it on the MLS, but you make a point of targeting buyers who want some sweat equity in their property and desire the ability to make a home their own. You could also try to sell it yourself this way, but without the marketing might of the MLS, this can be very difficult (see below for more information). You will not get as much money this way because you are selling it below market value due to the condition.
Sell house as is with no repairs – This strategy is closing aligned with the fixer upper one. The main difference is you target all buyers, whether they are investing or looking for a place to live. What does it mean “No repairs”. This means you as a seller will sell the property as is with no repairs being done on it. What the buyer sees is what the buyer gets when they purchase the home. As with the fixer upper, buyers won’t give you as much money for your home because they have to absorb all the repairs themselves.
Sell house on MLS with only one showing – If you want to create some buzz about your property, tell your listing agent you only want one showing for it. In this way, you do all the prep work on the property getting it ready to sell. You only have one or two showings over one weekend. In this way, you don’t have to deal with the constant agony of showings every day and keeping the house looking perfect for these showings. The risk in this strategy is that no one will come for the showings. You take home profit from this strategy should be similar to the traditional route if you agent does a good enough job creating the buzz. You can also auction off your house after one showing. There are auction houses that specialize in selling real estate. If all else, ask your listing agent about it.
For Sale By Owner – If you want to try to sell the property yourself, you can take this approach. Be forewarned, however, that there have been plenty of studies done on how FSBOs generally do not sell their homes doing it themselves. The houses tend to stay on the market longer and you will often make as much money doing this way as you would have if you gone the traditional route.
Rehab the home and pay for it when you close – The final way to approach the home selling process is to hire someone else to do all the prep work for you. You can hire a maid service to keep your house clean and in order. You can hire other professionals to help with lawn care and pest control. Finally, you can even hire a stager to help you present your house in the best light. There is even a company now that will do the rehab work for you and you won’t have to pay the company until you sell your house. Of course, the drawback to hiring everyone to do all the work for you is that it eats into your profit margins.