What’s the best way to sell my House? Should I Hire a ...

Selling Your House? The Three Best Options

What's the best way to sell my House? Should I Hire a Realtor; or Sell to an Investor or Sell it Myself?

So, you need to sell your house in a market like today's... It can be frustrating.

With so many other houses on the market, Buyers have more choices and often Sellers have to wait 3 to 6 months to sell their house for a price that they feel is fair. And many times, that's less than they originally thought they could get.

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 the real estate agent? Or sell it yourself For Sale By Owner, Or do you work with a real estate investment company?

Each of these options has its pros and cons, and each could be your best choice, depending on your situation and goals.

You really need to think through what you need to accomplish by selling your house and then choose the one that best helps you to get there.

I'll explain the drawbacks and advantages of each of these options and propose a good way to consider which one might be your best choice.

1) Hire a Real Estate Agent

The most popular and best known option for selling a house today is to hire a real estate agent.

The general process of working with an agent is...

a. Contact an agent and they will visit and give you an opinion about what it might sell for. They also will usually suggest the repairs or improvements they think will help make the house easier to sell.

b. Then they will ask you to sign a Listing Agreement that will typically last six months. During that time they will have the right to exclusively represent you and sell your property.

c. The Agent will list your property on the MLS (Multiple Listing Service) online marketplace.

d. Either they or a Real Estate Agent who represents a prospective Buyer will show the Buyer through your house. Note that the house should be clean, neat and presentable in order to sell. Usually agents prefer you to be out of the house when they come through and show it to potential Buyers.

e. The Buyer will make an offer and one of its conditions may require you to make certain repairs or improvements. If you opt not to do those repairs, they may simply want a

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Selling Your House? The Three Best Options

discount on the price. Your agent will represent you in negotiating these contingencies and the price with the Buyer's agent. f. Once a Buyer signs the purchase contract, they give the Real Estate Company a deposit that goes into escrow and will apply to the sale. Your agent will then get all the signed contract paperwork to a Title Company or attorney, and they will set a closing date. g. Assuming the contract contingencies are satisfied, and the Buyer gets approved for a satisfactory mortgage, The closing will take place on the scheduled date. Usually there is a "walk through" by the Buyer before closing to make sure all the agreed-on repairs or renovations have been completed.

Cost:

Selling Agent fees are usually about 3% of the total purchase price. Also, the Buyer's Agent collects 3%, so a total of 6% of the total price will be deducted from the sale proceeds as Real Estate Agent fees. For example, if your house sells for $250,000 you can expect to pay $15,000 in fees to the real estate agents at closing.

Timeline:

From 3 to 12 months, with an average of six months depending on where the property is and the current local market at the time of closing.

Pros:

Agents know the market well and have access to the MLS to list your house and expose it to a broad range of retail Buyers. They take care of the marketing and they or the Buyer's agent shows the property to Buyers and puts together the contract documents.

Cons:

It can be expensive. The commissions are paid out of the proceeds of the sale.

Most agents tend to do traditional marketing and a sale may take 3 to 12 months in most markets. Of course, you're responsible for the cost of the house while you're trying to sell and for paying for any repairs or improvements out-of-your-pocket.

Also, the primary way agents get Buyers is via the MLS service and by focusing on Buyers looking to live in the house. This requires keeping the house ready for numerous showings of the house often on short notice. There's also always the chance that the Buyer, who's offer you accept has their financing fall through.

It's also true that many times the Buyer will offer a discounted price based on renovations or repairs that they think are needed, and also just because they want to offer less and

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Selling Your House? The Three Best Options

compromise on a discounted price. These can easily reduce the proceeds by another 7% (2% for the closing cost contribution and 5% for the discounted offer). One thing usually not considered is the cost of holding the property during the time it takes to complete a sale. If you need to hold it six months, you still need to pay for maintenance and for the mortgage until the property sells. Who benefits from working with a real estate agent the most? People who aren't in a time crunch and can wait 6 to 12 months to sell. They also have room in the transaction to pay the agent's fees and are looking for full market value and are willing to wait until a Buyer comes along who will pay the full market value.

2) Selling Your House Yourself FSBO (For Sale By Owner)

In the last 10 years, For Sale By Owner has become very popular. With sites like: , and others like it, listing your house online and even getting an FSBO sign to put in your yard are easy and you can take control of the sale process yourself. The general process of selling your house on your own is:

a. You determine the value of your home. Sometimes this can be tricky, but there are resources out there. Usually paying for an appraisal is the most accurate and the best way to find the true value of your home, or you can ask a real estate agent who's willing to give you an estimate of the value.

b. You'll need to take pictures of the house and gather all the details, like square footage etc., create a listing on an FSBO website, and put an FSBO sign in your yard.

c. You market it yourself. Since marketing is your responsibility you can do as much or as little as you want. Many people list it in the newspaper or online. There are even flat rate MLS services where you can get your house on the MLS for under $500 with no agent commissions.

d. You handle offers, showings and putting together the paperwork for the sale e. You and the Buyer show up at the closing table and complete the purchase.

This can be very attractive if you're familiar with the real estate sales processes and you're a good marketer.

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Selling Your House? The Three Best Options

Cost: The only real cost is whatever fees there are to list on an FSBO site (usually between $100 and $1000). If you choose to get it listed on the MLS a flat fee agent will do it for about $300-$500. You pay any costs to fix your house up so that it shows well, and you pay closing costs or share them with the Buyer. If you decide to pay a Buyer's agent fee to encourage real estate agents to bring a Buyer to you, it usually costs about 3%. On a $250,000 house 3% is $7,500. Your share of closing costs plus the discounts previously mentioned in the Working with a Real Estate Agent option may reduce proceeds by another 7% (17500 on a 250,000 house).

Timeline: this really depends on your ability to market the property. Usually FSBO houses stay on the market a longer time than they do with an agent, simply because agents sell homes every day and know all the tricks to sell. But you should budget 6 to 12 months to sell with this strategy in most markets. Pros: You can save a big chunk of money by not paying agent fees and you have control and full responsibility over the whole process Cons: It's a lot of work to sell your own house and if you're not comfortable and experienced in the process of selling a house - filling out the paperwork, valuing your house, etc. you could end up over your head and it may cost you more than it would to work with an agent. Many good agents are also experienced in dealing with the problem of Buyer Cold Feet and, in those cases can help keep the sale moving forward. But the biggest drawback with going the FSBO route is the amount of time it could take to sell.

Who the FSBO route is for:

This can be a great option for people who don't need to sell quickly and who have no need to get out of the house quickly. Also, it's a good option for a Seller who is comfortable and experienced in negotiating and working with a Buyer and in preparing and executing the contract documents. But if you need to sell your house quickly or don't want to hassle with everything that goes with listing, marketing and selling the house yourself, then this isn't the strategy for you.

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Selling Your House? The Three Best Options

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. In virtually every city there are independent Real Estate Investors who buy houses. They either fix them up and sell them, hold onto them as a rental property, or they may sell them to other outside Real Estate Investors who may hold them as a rental property. Every area has reputable Investors who you can connect and work with.

The general process of selling your house to a Real Estate Investor is:

a. You connect with an Investor who gathers information about your house. b. The Investor evaluates the house and comes up with a value for it. The price includes

any needed repairs and needed improvements to bring it to current code and market conditions. c. This process includes determining what your goals are so an offer can be made that also meets your objectives. If you need time to move, for instance, it can be worked into the contract, too. d. You decide if the offer works for you. Note there is no need for you to have to prepare by cleaning or doing any repairs or improvements. e. If it's a fit, he will give you a written offer right there and the closing will be scheduled at a Title Company. The Title Company will do the deed research and prepare the closing documents and give the Investor a Title Insurance Policy. f. Because the Investor pays all cash, the closing can happen as soon as the Title company prepares the documents and completes the research needed for Title Insurance. g. The closing happens on the scheduled date and you get your cash from the Title Company.

This whole process can take from 7 to 30 days. Many Sellers choose this option if they want to sell their house fast with very little hassle.

Cost: the cost to sell your house to a Real Estate Investor is very low. There are no commissions or fees and often the Investor will actually pay 100% of the closing costs as well. This immediately eliminates thousands and costs that you would have to pay when working with an agent or selling the FSBO route.

The main cost of working with a Real Estate Investor is the fact that he's an Investor can't pay full retail value for A house. They usually look to buy houses at discounts that allow them, of course turn a small profit on the deal just like any other business turns a profit. But many people selling at a lower price makes sense in return for the elimination of commissions and fees and for the much faster insurance timeline to sell your house.

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