So the day has come… It is time to sell your house. It could be a joyful occasion or a sad one. Either way, here is the complete guide to selling your house.
You have two options: Option #1 is selling your home on the market. This is one of the most common ways of selling your house. Option #2 is selling your home to an Investor…
So let’s begin with option#1, selling your house on the market (aka the MLS which will make it visible on many consumer sites such as Realtor.com, Zillow, Trulia, etc…).
First thing is first, there are a bunch of questions to ask:
- What is your reason for selling?
- How soon are you moving?
- Are you buying a new home?
- Is there a mortgage on the property?
- Is there a certain amount of money you hope to get from the sale?
- What kind of condition is the house in, etc…
The big question is always…What do you sell the house for? Pricing a home is not just “the next door neighbor sold their home for $XX dollars, so my home is worth the same”. There are a lot of factors to consider when pricing your house such as:
- The Total Livable Square Footage – You need to be able to compare the homes around you of the same size.
- Current Condition of the Home – This also has a lot to do with how fast or slow it will sell.
- The Neighborhood – Is the house in a desirable area or in a part of town that has been declining?
- What are the Comps? What Did Other Houses Sell For in the Neighborhood? – Pricing this just right requires experience from a solid broker or agent. They have access to current and previous sales prices and other data and can “run the comps” on your property.
These aren’t the only things that are considered when listing/selling a home, but they are the top four things to consider about the house itself.
Here is the process of selling your home on the market (in a nutshell):
- Schedule a walk-though of your property with an Agent. They will visit the property and observe the details and condition of the property. Discuss your expectations, desires, and plans for the sell of the home with the Agent. Also disclose any problems/issues you are aware of to the Agent. All of this information is important for the Agent to ascertain in order to serve you best and assist with pricing the property correctly, aligning everything with your timeline, marketing the property, and at last, selling the property.
- Walk through the house with your Agent and determine whether you should make any repairs, catch up on some deferred maintenance, sell “as-is” without repairs, complete any updates, or if the house is already in great,”move-in ready” condition.
- Sign a Listing Agreement. A Listing Agreement is a contract between the seller and a Broker authorizing the Broker to market and try to sell the property on behalf of the seller. The agreement outlines the rights and responsibilities of both parties. It is not uncommon to sign a listing agreement with your agent for a 6 month term as this allows them ample time to sell the property. Depending on the market, it could sell in 30 days or in 150 days, so be kind and give your agent time. They are there to help you get the best deal you can and accomplish the goal(s) you desire. Agents may have a good idea based on past experience, but no one will truly know until it hits the market how fast or how much it will sell for. Everything is an educated guess based on past and current data and experiences aka “Real Estate Wisdom”!
- Determine the sales price. Armed with a comp report (aka Competitive Market Analysis) you will sit down with your Agent and determine the sales price of your house. Your agent will give you advice and opinions on the best asking price and strategy, the final say on pricing is up to you. Some agents prefer one strategy over another while sometimes the strategy is chosen based on the property, the market, or other driving factors. Here are the most common strategies to pricing a property:
- Price the property low so you receive multiple offers driving the sell price up
- Price it a little over asking price to give room for negotiations
- Price it right on point with about what it should sell for, and stick firm to your asking price
- List your house on the MLS. This is where your biggest audience is for advertising your home. The MLS syndicates your listing to many other real estate websites such as Realtor.com, Zillow, Trulia, and much more. Only Brokers and Agents have the keys to the MLS kingdom, even Investors don’t have access to it unless they are Realtors also.
- Put the “For Sale” sign in the yard, share the listing to social media, announce any “Open House” opportunities, distribute flyers, etc.
- Your agent will begin receiving phone calls and/or emails after listing your house on the MLS. We have had times that we had multiple offers come in within the fist few hours of listing a home on the MLS. You need to keep your home clean and prepared for showings and unless specific instructions were put in place, you need to be flexible with leaving the property at a moments notice when others request to schedule a viewing of the property.
- Your agent is required to present you with all offers, good or bad. Your agent will give you their advice and opinions on the best offer, explain the differences between the offers, and give their recommendations. Just remember, at the end of the day, you make the call on which offer to accept or not accept.
The listing fee: Industry standard for the listing fee is 6% of the total sales price paid by the seller. For example, if you have a home that you sell for $200k listed on the market with a Realtor that charges you 6% of the $200k, that would be $12k in total commissions. The total commission is paid to the seller’s Broker and the buyer’s Broker based upon the commissions agreed upon in the MLS listing. They typically split it 50/50 so in this scenario, 3% of the commission goes to each party. The commission is a fee that is charged by the seller’s Broker and covers the commission for both the seller’s Broker and the buyer’s Broker. If the seller did not cover the commission for the buyer’s Broker, there would not be very many buyer Broker’s/Agent’s showing your property to prospective buyers and your property would be on the market for quite a while!
Behind the scenes, there is a lot of back and forth between the agents for the buyer and seller. A good listing agent will work to make sure that your house makes it to the closing table. We have spent many long days and nights going back and forth with buyer’s agents and our clients trying to structure the deal for them (aka negotiation). Then there is also making sure all the deadlines are met, keeping the timeline on track, creating and delivering necessary addendums, and making sure surveys, appraisals, home inspections, home warranties , etc. are all ordered and performed. Just because the contract is signed and executed, does not mean that the job is completed. Both the buyer and seller still have certain obligations to perform.
The Pro for selling on the market: Largest audience to market your home too. This means it could sell fast, I mean super fast. Full price offer or more on the first day listed on the market! This of course depends on the home and the current market amongst other factors. Sellers can receive the highest price for their house by listing on the market.
The Con: The longer the house sits on the market, the lower the price will become. It is important that you have a plan when it come to selling your house.
PRICING YOUR HOUSE RIGHT IS BOTH AN ART AND A SCIENCE.
Option #2 – Selling your House Directly to the The Story’s
You could go the route of selling your home directly to an Investor like Misty and I. Instead of listing your home on the market and letting everyone from Joe, Sally and Bob trample through your house for showings, you could sell it directly to an Investor. Depending on the Investor and the house, each situation is different. You could get a full price offer on your house or you could get a lower offer on the house. See there are 8 ways from Sunday to structure the purchase of a home. If is a straight cash offer (which is one of the many ways we can purchase houses) then it can be sold really fast. It all comes down to having that conversation to see if it is a viable option and which of the options is better for the seller… Sell it to an Investor or sell it on the market.
Selling it to an Investor versus on the market is good if it is one of the following situations:
- Divorce, a common reason to sell to an Investor. You want to separate from the house fast to break any ties to your ex-spouse and move on with your life.
- Deferred maintenance and repairs have gotten away from your over the years. If a house needs a lot of maintenance or repairs, it generally will sit longer on the market or not qualify for certain financing.
- You need to sell fast because taxes are due on the house and you do not have the funds to pay the upcoming taxes that are due.
- You are going into foreclosure. The right Investor can purchase your house quickly and stop the foreclosure process and save you from having a foreclosure show up on your credit and follow you for years to come.
- It is an inherited house that you don’t want to deal with. A family member passed away and left you a dumpy house that requires money to fix up and you don’t want to fix it up or be responsible for its taxes, insurance, and other holding costs.
- You owe too much on the house and it won’t cover the Realtor fees associated with selling it on the market.
- There are back property taxes owed on the house or other liens and you cannot get a clean title.
- It was a burn out and insurance didn’t pay as much as you needed. Some Investors specialize in buying and renovating burned down homes. (We don’t, sorry, but it is not our cup of tea).
- High interest loan that you want to get out of.
- Lost your job and can no longer make the payments and don’t want to go into foreclosure.
- A landlord who is tired of late rent payments or dealing with troubled tenants and maintenance.
For pretty much all of these scenarios, we can help clients by getting them out of a tough situation. We have to call in a few friends that like working with those types of situations. Outdated and so much more.
The only real down side to selling to an investors is that we have to have the room in the deal for the number to make sense so you may sell for less but not have to pay fees and sell it fast. It is a trade of one thing for the other. You will either pay a Realtor and have hold cost while the house sits on the market or you will close quick and be done with the house. Because though when dealing with investors. Many people out there say they buy homes and work to get in the business. Make sure of a few things when dealing with investors. Not every yellow “We BUY Houses” sign is an experienced person behind it. There are plenty of solid honest investors but like any business there are always those bad apples that mess it up for the rest of us. Many people choose to work with us as investors because as agents we must and are required to operate by a certain code of ethics. and that same code for us carries over to the investment side of our business.
- Always use a TREC 1-4 Contract. The Texas Real Estate Commission (aka TREC) has a pre populated form in which anyone can use to buy or sell a home. It is there to help protect the public. Dont just sign random contract they wrote up. Know what your signing.
- check out who is buying your house, do they have a good reputation? Misty and I are agents too which mean we stay within our guidelines to help protect clients and will only do a deal as an investor if it is a win-win situation. In fact we even turn investing deal away if it isn’t a good fit for us or the client.
In conclusion it is your the choice is yours, Really it just takes having that conversation to figure out the best solution.
If you’re ready to take action? Fill out our basic information form about your house to get started.
