How to Sell Your House Without a Realtor
If you’re researching how to sell your house without a realtor, you should first know that you are completely within your right to do so. There are no rules or laws that state a homeowner has to sell their home through the use of a real estate agent, or broker.
In fact, in 2019 around 11% of homeowners decided to sell their property outside of the multiple listing service (MLS), and specifically listed it for sale by owner (FSBO).
But can selling your property in a less traditional way work for you and your specific situation? Learn your options, what steps to take, and how to sell your house without a realtor, below.
Table of Contents
Want to skip ahead to the basic nuts-and-bolts? Here’s a Table of Contents to peruse the specific sections you want to focus on, or find easier to reference later:
- Why Do You Want to Sell Your House Without a Realtor?
- How Much Does it Cost to Sell With An Agent?
- Selling the FSBO Way the Right Way
- What Are My Other Options?
- Selling to a Real Estate Investor
Why do you want to sell your house without a realtor?
In 2006, author Steven D. Levitt explored the “secret” side of the economic world. When he explored real estate, he found that hiring a real estate agent to sell a home didn’t always result in a higher price.
A study by The National Bureau of Economic Research found that FSBO and non-FSBO homes in similar neighborhoods in Wisconsin found no difference in prices between homes listed by realtors and those that were not.
There are multiple reasons you may be researching how to sell your house without a realtor. Possibly, you’ve already gone through the process of selling a home with an agent before and think you have a pretty good grasp of what it takes. Maybe you think you can get the job done faster and more efficiently if you’re running the show.
Most commonly though, you may be looking to sell your house without a realtor because you want to avoid paying an agent that real estate commission at closing.
How Much Does it Cost to Sell A Home With an Agent?
Real estate agents earn a commission of around 3% to 6% from the sale of your property. So, selling your home without a real estate agent can potentially save you thousands to tens of thousands of dollars.
But there are other hard costs that end up coming into play anyway when it’s time to sell your house without a realtor– most of them being unavoidable.
The cost of repairs, renovations, and upgrades can become a major drain on your bank account. However, there are also expenses to consider budgeting for, such as closing costs, prorated and other taxes, fees, and possibly still a real estate agent commission, but on the buyer’s side.
Selling the FSBO Way The Right Way
The three most common methods of selling your home include listing it with an agent, selling it to a real estate investor, and selling it yourself. This is called FSBO (pronounced fizz-bo), or “For Sale By Owner.”
There are a lot of details that will need to be covered If you’re looking into how to sell your house without a realtor. Especially in order to avoid needlessly wasting tons of your time and your money.
It isn’t as simple as just listing your property on the market. The learning curve can be pretty darn steep. Here’s a checklist on how to sell your house without a realtor the correct way if you choose to go the FSBO route.
Step 1: Preparing to Sell
Selling your home on your own may seem like a DIY project you’re ready, willing, and able to tackle. The harsh reality is that this process is widely considered the longest and the most difficult method.
Right from the get-go, homeowners most commonly make the mistake of jumping right into trying to list their home too soon. They don’t realize until it’s too late that they should have taken the time and money to properly prepare their home to catch prospective buyers’ eyes and avoid costly legal and financial delays.
Upgrades and Renovations
The large majority of traditional homebuyers are looking for their move-in-ready dream home. Conversely, a large majority of homes for sale are far from being considered “dream-home” worthy.
Most experts agree that kitchens and bathrooms alone can sell houses. Updating and renovating the most important rooms to a buyer could be the key to a higher asking price and a faster close.
Will a Renovation Be Worth it?
Before you tackle a renovation, you should carefully consider the ROI. A kitchen upgrade costs an estimated $35,000 and recovers about 57% of the cost, according to NAR’s Remodeling Impact Report.
That being said, 23% of those Realtors surveyed said that a recent remodel was what helped them close a sale.
Remodeling.net has an extremely helpful tool to loosely base your renovation ROI decisions on. They’ve created a yearly Cost vs. Value report that compares average costs for 22 common remodeling projects with the value those projects retain at resale in 136 U.S. markets.
Remodeling and Renovation Permits
Before you move forward with your decision to create an open floor plan where there isn’t one, a total kitchen remodel, or knock out that view-blocking pillar, it’s critical that you consult the experts first.
There are very few remodeling jobs that can be done without obtaining a permit first. Smaller cosmetic projects like repainting, changing out the flooring, and minor electrical repairs or light fixtures likely won’t need a permit. However, it’s almost guaranteed that you’ll need one if you want to knock out a wall, add a fence, or a larger window to your home.
Most of the time, homeowners try to skirt the permit process because of how long it can take and in order to avoid the cost. If the city is running behind and becomes backlogged by several weeks, all your work must come to a halt while you wait.
However, if you don’t take the time and pay the money for permits, you’re potentially setting yourself up for failure. The city can penalize you for un-permitted work and even require you to tear it out. Homeowner’s insurance can decide not to cover you.
Permit issues are flagged during the Home Inspection process. And, especially if not done up to code, non-permitted work can cause and allow a buyer to legally back out of a contract.
Make Minor Repairs
Be sure to make any and all minor repairs necessary– including leaky faucets, loose door handles, windows that stick, fallen closet doors, or light switches that don’t work. Take a critical eye to every aspect of your home that could potentially lend the upper hand of bargaining power to the buyer.
Declutter and Downsize
One of the first steps to staging your home, is getting rid of any and all clutter. Organize storage areas, and make sure everything from bathrooms and kitchens to the kids’ rooms and living area is sparkling clean. Little changes can make a big difference. Take bulky and unnecessary items to a storage unit if possible.
Hire Professional Painters and Cleaners
A professional deep clean will help spruce up the place, both inside and out. Don’t overlook any nook or cranny– especially the hot-spot places like door knobs and light switch plates.
Steam clean the grout on tile floors and professionally shampoo all carpets. Spending a little money on a pressure wash of your home’s exterior will sometimes forego the need for an exterior paint job.
Touch-up or repaint any rooms in the home that are looking tired. In HomeLight’s 2016 Top Agent Insights Survey, all of the top agents they spoke to agree: put a fresh coat of paint on those walls before showings start.
The 100+ agents surveyed also weighed in on their color recommendations for this as for what sells, with 78% saying beige is their top choice, followed by white (around 30%) and to a lesser extent, gray (15%).
Ramp Up the Curb Appeal
Most buyers will find properties they are interested online and then do a “drive-by” to check out the neighborhood, area, and see what the house looks like from the street. Here’s a very basic checklist to make sure your curb-appeal is as appealing as it can be.
- Trim trees and bushes- especially if branches are nearing the house
- Invest in a few flats of seasonal flowers for a pop of color
- Paint the front door
- Make sure the doorbell works properly
- Keep the entry way and walkways swept
- Wash the windows inside and out
- Weed flower beds and keep lawn mowed
- Put away your hoses, trashcans, and recycling
- Clean gutters
- Replace old address numbers with modern exterior ones.
- Make sure your entrance is clear of any shoes, keys, mail, etc.
An important step some FSBO sellers skip is scheduling a home inspection of their own beforehand. It’s not required, but it’s helpful to know if there are any issues to be aware of that could be costly, potentially lower your asking price, or could even cause a sale to fall through.
If issues are discovered during your inspection, you can fix them ahead of listing the house, or incorporate the cost of fixing them into your home’s pricing.
Disclosing Your Home’s Conditions
You’ll also need to brush-up on the disclosure requirements for the state you’re selling in. With a FSBO sale, you’ll need to conduct careful research on what sellers legally must tell buyers about their homes, including things like structural problems, past flooding issues, and even the use of lead paint if it’s an older house.
If these “surprises” come up when the buyer conducts their home inspection, they could back out or their lender could decide not to finance the purchase.
How to Correctly Price Your Home
A key factor to be able to sell your house without a realtor in a reasonable amount of time is getting the pricing right. This really isn’t nearly as easy to do as you might think.
A major struggle most FSBO seller’s suffer from is knowing how to price their home correctly, and competitively. Sure, you can go online and see what nearby homes have sold for, but are you really comparing apples to apples?
The Federal Housing Finance Agency has a useful tool that draws from home sale data pulled from federally insured loan programs. With the FHFA’s House Price Calculator, you can plug in the price you paid when you purchased your home and it will come up with the likely market value of that house today.
Scout Out the “Competition”
Go to open houses in your neighborhood, and see how your home measures up in comparison. You can also check out online listing resources to get an estimation based on comparable homes in your area and possibly in your own neighborhood.
Hire an Appraiser
Getting an official estimate by a licensed appraiser who knows your neighborhood is the best way to get an unbiased price analysis. You’ll have to pay for it, usually around $200-$400, but its crucial information to have for pricing as well as when you’re showing your house.
The buyer’s lender will ask for an appraisal before you sell anyway. If you use an appraisal to price your house realistically from the start, your asking price will be in line with their lender’s estimate. This will prevent last-minute re-negotiations or an offer that falls through all together.
Use Your Research and Findings to Calculate Your Price
Using your analysis, decide how much your house is worth to you. Then consider listing it on the upper end of the scale to get the highest price, in the middle to be realistic, or lower in to attract attention and sell faster.
Your price should reflect the current market and timing. If the real estate market is booming and timing is right, you can ask more for your home.
When is the Best Time to Sell My Home?
In 2018, the typical U.S. home spent between 65 and 93 days on the market, from listing to closing. The amount of time a home will spend on the market can vary greatly. This can be influenced by local market conditions, location demand, and the season.
According to a recent study by ATTOM Data Solutions, most people wait until the summer to sell, with June, July and August accounting for the most activity in home sales.
However, getting out in front of the summer rush tends to yield the best results. The most profitable month was shown to be listing in May, with most homes selling at around 6% above estimated market value.
Consult with an Accountant
A small step that some FSBO newbies don’t think of is consulting with a professional accountant beforehand. According to the government, the sale of a home is a taxable event.
An accountant can help prepare you on what to expect so you’re not hit with any large surprises and what it will mean for your tax outcome.
There are tons of write-offs available to you that a tax professional can make sure you’re taking advantage of when tax time comes around. For example, you can deduct any costs you racked up selling your home. These can include legal fees, escrow fees, home inspection fees, title insurance, and commissions.
You additionally can deduct any renovations you make in order to complete a sale as long as they were made within 90 days of the closing date.
Step 2: Marketing Your House
Now that your home is prepped and you’re physically and mentally prepared to move forward, it’s time to start marketing your home.
According to a 2018 NAR Profile of Home Buyers and Sellers report, the top places where buyers found the home they purchased were:
- Internet: 50%
- Real estate agent: 28%
- Yard sign/open house sign: 7%
- Friend, relative or neighbor: 7%
- Home builder or their agent: 5%
- Directly from sellers/Knew the sellers: 2%
- Print advertisement: 1%
Where Can I List My Home?
As you can see, the number one place where buyers had found their purchased home was on the internet.
As you’re aware, the internet is an infinitely expanding arena and can be a confusing place if you’re only starting to research how to sell your house without a realtor. Here are a few of the most popular options for FSBO sellers.
Popular Listing Services
Several websites like Zillow, Facebook Marketplace, Trulia, or Redfin can let you list and market your property, at a base level, for free. You’ll also be able to self-list at FSBO.com and ForSaleByOwner.com for a small fee.
Be prepared to be bombarded with a ton of paid up-sells on almost every listing service. Look at the options carefully to see if paying to be a featured property, for example, is actually worth the price.
There’s nothing wrong with listing on more than one service, or as many as you can. Just be sure that you keep track of where you list and update all as changes happen.
Can I List My House on the MLS?
Real estate professionals use the MLS to see each other’s listed properties and connect for their client. They pay to post and list those properties as well. Contrary to popular belief, there isn’t just one big central MLS.
Actually, regional real estate areas each have their own separate MLS. There are currently over 800 in the US and counting.
Without a broker or real estate license, you’ll be unable to access or list your home on your region’s MLS. However, if you’re looking to sell your house without a realtor, there are flat fee MLS services available that can help you with this.
A Flat Fee MLS Listing Service is a state licensed real estate broker that provides you with a listing on the MLS instead of their full real estate services.
They place your listing on the MLS, can schedule your open houses, and can even make changes to your listing as you move through the sale process. Fees range anywhere from $200 to $1000 depending on the level of service.
Never Skimp on Real Estate Photography
Once you decide where you want to list your home, a critical next step is making sure it looks and sounds as irresistible as possible. Hire a professional real estate photographer to capture your home in its best light.
ForSaleByOwner.com says that
“92 percent of buyers use the Internet in their home search and 50 percent use a mobile website or app. With the Internet and mobile apps being so driven by images, it’s never been more important to have high quality, attention-grabbing photos in your listing.”
The experts at ListingDoor also go on to say that:
“Properly lit, high-resolution photos are the only type of images that should be used in an FSBO home marketing campaign. Like any other sales effort, visual cues are half the battle. Photos taken with a smartphone often turn off potential buyers, and simply can’t measure up to the quality of pictures a professional real estate photographer can deliver.“
Also, if it’s in your budget, consider hiring a drone photographer to capture a bird’s-eye view of the property to get angles not possible with traditional cameras. Drones can also get good close-ups that accent special features in hard to access areas.
Resist the urge to list your home until you have those professional photos. With so much competition from other sellers and professional agents online, you only have a few seconds to catch potential buyers’ attention.
If buyers conduct a search and your home is listed without pictures at all or with terrible ones, they will most likely skip ahead to listings with photos or better photos, and won’t come back to yours.
Composing Your Home’s Description
When writing, you want to make sure your images and listing description are working together to attract the right kind of buyers. Craft a catchy headline and expand on it in your opening statement.
Then, highlight the most important facts about your home:
- Number of bedrooms/bathrooms
- Square footage of the home
- Size of the property (lot size or acres)
- Location/neighborhood schools, town center, nearby shopping
- Garage (if any)
- Extras such as pool, patio, yard, deck, fireplace, etc…
- Any recent updates or renovations, such as windows, updated kitchen, new appliances – be sure to name the brands
- Any unique characteristics such as loft, waterfront views, breakfast nook, wrap-around porch, etc…
Overall, the most important thing to consider when writing your home’s description for listings is the language you’re using. Don’t use phrases like “motivated seller” or “need to sell fast” unless you’re looking to receive a lot of low-balled offers.
You’ll also want to avoid using any discriminatory language that could discourage any groups of people from looking at your home.
Step 3: Scheduling Showings and Accepting Offers
A Buyer’s Agent May Not Show Them FSBO Properties
There’s an important factor to consider when trying to sell your house without a realtor that could hinder your reach to potential buyers.
Even though you may be operating without the aid of a real estate agent, that doesn’t mean the large majority of potential buyers aren’t as well.
Experienced real estate brokers have generally been burned by an FSBO transaction in which the seller did not pay the full agreed commission—or any commission at all—to the agent who brought the buyer.
“There are only two reasons why I show an FSBO: There is no other inventory available or the price is ridiculously low,” says Bruce Ailion, a realtor with RE/MAX Greater Atlanta.
However, there are some buyers’ agents who will show your property– under the right conditions. This usually entails that you sign an agreement that a certain percentage will be paid as commission to the agent.
As the expert in your own home, you’ll be able to really highlight the finer points of living in your house. You’ll also be able to personally speak about your neighborhood and what it’s like to live in the community to potential buyers during showings.
When you’re running the show, you get to decide when you want to show your home. And, you won’t have to wait for your agent’s windows of availability.
However, you’ll still find last-minute showing requests will pop up unexpectedly. This can be a real burden on you not matter if you’re currently living in the home, you have temporary renters, or it’s vacant. The more open your schedule is when trying to sell your house without a realtor, the higher chance you can lock in an offer.
The main terms of a contract that are typically in need of agreement are:
- Mortgage terms
- Inspection terms
- Closing date
You should have your ideal terms identified beforehand as well as decide how much you’ll be willing to bend. Additionally, clearly define where your deal-breaker points are.
If you’re trying to learn how to sell your house without a realtor, you’re going to need to learn how to be a shrewd negotiator.
Here’s an extremely basic overview on how the process goes:
- An interested buyer will submit a contract to the seller with their initial offer.
- You as the seller can choose to accept the offer, or revise the contract with your preferred terms.
- Your counter-offer is resubmitted to the buyer.
This process continues ad nauseam until you either both agree… or one of you backs out.
Once you’re both in agreement, you’ll enter into a formal contract with your buyer. The buyer’s deposit money is placed in escrow with the title company of your choosing.
Step 4: Closing on the Sale
FSBO and Escrow
Escrow is the time between the acceptance of an offer and the close of the sale. However, just because a sale is in escrow doesn’t mean that it’s a done deal.
Communicate with your title company frequently. This will help ensure the necessary items like a property inspection, appraisal, and title insurance are happening in a timely manner.
The two most common contingencies that can cause a sale to fall through during escrow are inspection and mortgage contingencies.
The most common inspections that a buyer will conduct are:
- a general home inspection
- well and water inspection
- septic inspection
- radon testing
- swimming pool inspection
- pest and termite inspection
- lead testing
The most important part here is to keep track of timelines so you don’t miss disclosures or inspection periods. You absolutely need to make the property be available for these inspections.
The buyer is going to be responsible for most inspection costs during this time. But you’ll typically have to pay for some things that will need to be prepared before inspection.
Any undisclosed issues with the home could cause your contract to need to be renegotiated or be fixed before closing. It may cause it to fall through all together.
A traditional buyer typically needs to wait for financing approval. This delay can slow down closing, and you may have to wait longer to finish the deal. The most common times a bank would deny financing is if the appraisal comes back at lower than the purchase price or if the buyer doesn’t meet the full underwriting criteria.
You have three options with a low appraisal: cancel the contract and put the home back on the market, re-negotiate with the buyer, or dispute the appraisal and try to get it adjusted.
Contingencies in contracts have deadlines and that timer starts as soon as the contract is signed. All contingencies are usually written pretty loosely. Typically, if a buyer wants to back out of your agreement during contingency timelines, they have full right to do so. Plus, they get their full deposit back.
Clear to Close
During escrow, the buyers will be waiting for their mortgage commitment letter. This is basically a letter from their lender that states that underwriters have approved them for a mortgage.
This also means that the Mortgage Contingency from above has been satisfied. However, the mortgage commitment may come with commitment conditions for both parties involved. Common conditions are verification of funds, verification of title, verification of homeowner’s insurance policy, etc…
If all conditions are met by both you and your buyer, then they’re given the clear to close!
Hire a Real Estate Attorney
A handful of states, like New York and Georgia, have laws requiring all sales be overseen by a real estate attorney. This even applies when one or both parties have agents.
Even if your state doesn’t require it, a real estate attorney can be a trusted guide. They may be able to provide referrals for escrow agents and title companies. They can also answer any questions about the selling process you may have.
And trust us – you will have questions.
Especially when it comes to paperwork and documents. Some states have standard real estate contracts that are almost 20 pages long. Having an attorney on your side to help navigate can save you time, money, and a lot of headaches.
Documents and the Closing Process
Now that you’re moving closer to closing, you’ll have to gather a few very important documents beforehand. These include:
- Title and Deed: These prove that you own the home and are legally allowed to transfer ownership.
- Property taxes: Have your most recent tax statement ready. This will give the buyer an idea of what they’ll need to pay after purchasing your home.
- Loan documents: Gather paperwork on your first mortgage – and second mortgage or home equity lines of credit if applicable.
- Property survey: This is usually ordered by the buyer. It shows the boundaries of your property and where fences, driveways and other structures are located. You probably received this when you bought your home. You might need to contact a local engineering firm to produce a new one.
- Plans and permits: These are required if you’ve done any work on your home like renovations or upgrades. You’ll need to produce the permits that prove everything was done up to code.
- Homeowner’s insurance: Make sure you have the documents that detail your current policy for the home. Be sure not to cancel your policy until after the closing date
Your buyer may or may not ask to see the property one more time before closing. The buyer themselves or their agent will typically conduct a final walk through the home. They want to ensure that nothing has changed since the last time and/or that all conditions have truly been met.
This walkthrough is usually conducted as close to the closing date as possible. Sometimes it can be just a few days or even hours beforehand.
What Happens at Closing when You Sell Your House Without a Realtor?
When escrow is involved, the final paperwork should be completed through the title company or escrow company. If escrow isn’t completing the final transfers, you’ll need to record a notarized grant deed with the county recorder’s office, paying the applicable fees.
When closing day arrives, you may not meet with all of the people involved with the process at the same time. The buyer and you, for example, may not even be in the room at the same time.
Some of these people might be associated with the title company. You also may deal with someone from the title company that specifically acts as a closing agent.
What You Need to Bring to Closing
- Photo id’s for any and all sellers listed on the home contract
- Any questions (if you have any) regarding your closing statement
- A pen. This may seem silly, but it’s always good to have one on hand just in case.
- The deed of your home if you own it outright
- All keys, fobs, and security codes for your home
- Documentation of repairs you’ve made per the home inspection
What Escrow and Closing Agent Bring
- Your mortgage and loan payoff information
- Escrow account information
- HUD 1 Settlement Agreement
- Inspection Agreements
- Termite inspections & property tax information
The professionals usually have their side of the closing handled,. Unfortunately, just like any group project, there is no harm in asking them beforehand if they are prepared and have everything they need. It’s better you ask beforehand to double check them, than get to the closing and regret it. If any single piece to this process is incomplete or missing, the closing will have to be rescheduled.
Getting Paid and What You Pay at Closing
If you are netting a profit after fees, expenses, and commissions are taken out of the sale, you’ll receive a check at closing for the remaining balance.
There’s a chance you may simply break even or possibly have to pay extra at closing. Make sure to check with your accountant or attorney for an exact total so you can bring a cashier’s check in that amount.
Typical Seller Expenses Paid at Closing:
- Remaining mortgage balance (if applicable)
- Buyer’s agent commissions (typically around 3-6%)
- Prorated property taxes
- Transfer tax
- Outstanding utility bills
- Applicable HOA dues
- Prorated mortgage insurance
- Any other bills related to your home
- Title Fees
- Escrow/Attorney Fees
These expenses listed are typical but not a hard list. Depending on the details of your home sale, you may have additional paperwork to sign or fees to pay.
Is FSBO Right for Me?
Ultimately, when you want to sell your house without a realtor, whether FSBO makes sense for you or not boils down to three things. First, how much time you have to spend on the effort a FSBO sale requires.
Second, how much upfront capital you can afford to market, repair, and beautify your property. And third, whether or not you can handle the sale as a legal business transaction.
How to Sell Your House Without a Realtor – Is There Another Option?
According to the latest data, the national average time a house sits on the market when selling a traditional way is anywhere from 65-93 days. The average time it will to sell your house will depend on your local real estate market and location. For example, rural homes tend to stay on the market for two months longer than urban or suburban homes.
The FSBO sale process could take a really, really long time to complete. And the time to sell can take even longer if there are missteps, inspection issues, repairs, and other critical delays.
There’s also a lot of hard work involved. Extra responsibilities and legal liabilities fall solely on your shoulders and you incur a lot of upfront home expenses, marketing costs, and legal fees.
According to that same NAR study mentioned before, the most difficult tasks for FSBO sellers were reported to be:
- Getting the right price: 17%
- Understanding and performing paperwork: 12%
- Selling within the planned length of time: 5%
- Preparing/fixing up home for sale: 8%
- Having enough time to devote to all aspects of the sale: 3%
There is another option when looking for how to sell your house without a realtor OR going the FSBO route.
Selling to a Real Estate Investor
When you get ready to sell, signing a contract with an unqualified buyer can cost valuable time and money. Choosing a buyer who understands distressed/hard to move homes, what they’re worth, and how to speed up the process can make it easier and more profitable.
There are three commonalities between people who sell their home to an investor. They want to sell fast, they want to sell as-is, and they want to sell for cash. Here are a few specific reasons where you can see success when you want to sell your house without a realtor and to an investor instead.
Common Reasons People Sell to a Real Estate Investor
Extensive Repairs Needed
We covered how important renovations and upgrades are to the appeal of your home to buyers and selling your home quicker. However, when there are added on critical repairs needed, these can be just as, if not more, costly and extremely important.
Not everyone can afford to pay for this upfront or have the time to wait for these to be completed. Those with homes that are considered “ugly” or in dire need of repairs are choosing to sell with real estate investors because investors are known for buying “as-is.” This means no renovations, repairs, cleaning, landscaping, etc. is necessary for an investor to take your home off your hands.
When there are extensive repairs or renovations needed to get a home “market-ready,” an investor will make you an offer based on factoring in those expenses.
There’s a reason you hear real estate agents talk about “location, location, location.” Some traditional buyers will overlook a few flaws in a home if the location is just right for them. But what about homes that are struggling to be sold the traditional way in a less desirable area? Most cash buyers and investors have no qualms when it comes to buying houses in bad neighborhoods. As investors ourselves, we expect to put work into a home and the exterior in order to meet today’s buyer’s needs. Rather than having to invest the money into repairs yourself, you can have a fast, guaranteed sale with an investor.
You’re probably seeing see a few common threads with all the reasons people choose sell their home with an investor so far. A large benefit is especially noticeable when time is of the essence. When you have a job transfer, whether planned or sudden, you need to know that your current home can be sold as quickly and smoothly as possible.
When working with a realtor, your sale is held at the mercy of your agent’s schedule and availability. If you’re trying to sell your house without a realtor by FSBO, your personal time is held ransom. There are a lot of additional responsibilities that fall on your shoulders.
It may be expected or a complete surprise when a family member or acquaintance leaves a property to you in an estate. As you now know, it is very difficult to navigate the process of unloading a dwelling by yourself. From legal concerns to complicated tax laws, getting rid of a house that someone left you is not very simple.
People go the investor route when selling an inherited property because an investor will purchase an in-probate or out-of-probate residence quickly and as-is.
Divorce is a hard enough experience as it is, and involves a division of assets. Frequently, equity in a home is involved in those assets. A quick sale might be necessary to settle the divorce proceedings.
This happens usually when neither party wants to keep the home, for whatever reason. Or, if one who does want the house can’t afford to pay the other party their share of the equity.
Some people try to sell their home if they are having trouble paying their mortgage. Unfortunately, if they’re unable to do so in a timely manner, their lender may begin pre-foreclosure.
Foreclosures can terrorize your credit report for up to seven years and are virtually impossible to work off. Most people try their best to avoid the foreclosure process from being completed at all costs. They do this by finding an investor with cash who can work extremely fast to buy their home before their lender puts it up for auction.
You can’t profit off of the sale of your home facing foreclosure, unfortunately, as all money from the sale goes directly to the lender. In these situations, any offer that makes the lender happy and gets the seller out of jeopardy is a good offer.
How Does an Investor Home Sale Work?
You don’t have to worry about hiring contractors for a new paint job, sprucing up the curb appeal, or even trying to orchestrate a Pinterest-worthy kitchen remodel.
Even if your property needs quite a bit of TLC overall, an investor still wants to make you a cash offer! Let’s use our process as a prime example of how the process works:
Step 1: Make Contact and Fill out Our Form
Once you have chosen to sell your home without a realtor by going the investor route, making contact typically means filling out our quick and easy online form. This gives us some initial information, but also means that we are going to be reaching out near immediately.
Be prepared to answer a phone call from a number you don’t recognize. One of our experts is going to ask you a few more questions in order to get know you a little better, see if we’d be a good fit, and give you an initial estimated offer range.
If that range sounds good to you, we’ll then schedule out someone to come do a quick walkthrough and take photos of the property. Sometimes this can happen that same day. We want o verify that there aren’t any glaring discrepancies in the initial information you provided.
Called Due-Diligence, this also includes us conducting a title search and ensuring that you’re legally allowed to be selling the property.
Step 2: Receive Your Offer and Make Your Decision
The next step is we send out an initial offer agreement that you can revue and sign online. When you receive your initial written cash offer, remind yourself you are sacrificing some equity in favor of a quick sale and zero out of pocket expenses. You also avoid the time and money needed to prepare your house for showings and traditional sale.
You’re also relieving yourself of most legal problems and responsibilities associated with your property. You don’t need to make countless phone calls or trips to the courthouse. An investor takes care of all the research, leg-work, and all of the documents.
So yes, the offer you get will certainly be below the current full market value of your property. However, reputable investors like us present you with a fair offer based off of what’s called the ARV (After Repair Value) of your property.
Our offered are based on:
- Comparable sales in your area
- The cost of covering all closing costs and fees
- Factoring in any liens or delinquent mortgage payments
- Covering any major necessary repairs and standard cosmetic upgrades to resell at market value.
The best way to determine if an offer from a real estate investor like us is one you can live with is to crunch the numbers. In one column, list what you are saving in terms of repairs, cosmetic upgrades, landscaping, professional cleaning, commissions, fees, and time.
In another column, list your potential financial losses if you accept the deal, such as getting less equity from a below-market offer. See how the pros and cons balance out, and then make your decision.
We refuse to close on any deals that don’t make sense for the both of us!
If an investor makes you feel pressured, insulted, rushed, or just all-around uncomfortable, that could be a red flag that they are less-than-honest in their practices.
Step 3: Sign, Close, and Get Cash in Hand
The closing process can be completed extremely fast because real estate investors (like Honey Home Buyers) already have a trusted title company and escrow agent they work with closely and frequently.
There’s no mortgage pre-approval or approval to worry about with an investor.
In most cases, you don’t even need to be present at closing– choosing to have a legal proxy attend on your behalf instead.
The documents you can expect at signing when you sell your house for cash are:
- Final Closing Instructions: This is a list of things the escrow company needs to do as well as a list of the amounts of money changing hands.
- Statement of Information: This is a document where that verifies that you are who you say you are.
- Mechanics Liens: This document says that you have no outstanding lens against your property.
- Mortgage Loan Payoff: This document states how much you owe on your mortgage, if anything at all. If you do owe, the escrow company handles the payment to your loan company.
- Certificate of Title: This document states that you have the legal right to sell the house.
- Title Deed: This document is used to transfer the ownership of the property from you to your buyer.
- HUD-1 Settlement Statement: This is a federally required document. It lists out the sales price, the tax, utility bills, and anything else agreed upon previously.
However, you should be aware of some situations that could slow the whole process down, like:
- Making sure you’re responsive on reviewing and signing required agreements and documents.
- Waiting on opposing lawyers involved because of a divorce can hinder selling quickly where assets need to be split.
- On the chance your property is in pre-foreclosure, you’ll need to take time to contact your lender. They need to know you plan to list for sale with the intention of paying off the mortgage and fees.
- During due diligence, sometimes it’s discovered you neglected to disclose important facts. These include any major repairs, damages, liens, or more that would affect the initial written offer. These most likely cause a need for the contract to be renegotiated or cancelled.
- Most agents have what is basically a “non-compete” agreement built into their contracts. These say that you would need to sell exclusively through them until a certain set time is up. This can cause a delay if you need to wait. However, you could be able to lock in an offer with an investor with that agent’s time-limit contingency.
Once all is signed-off on and closed, then you get paid in full. You can attend in person to the closing and you’ll receive a cashier’s check. If you can’t show up in person, we’ll wire you the money directly to the account of your choosing.
Looking for the best way to sell your house without a realtor? Want to sell faster with less stress and upfront costs than FSBO? Contact us today for a fair cash offer!