Being a homeowner, you’re faced with many duties concerning your property, which, at times, can be challenging to maintain. The obligations of owning a house usually vary from home maintenance to paying your mortgage/insurance payments. You will be forced to sell your home if you fall behind on your mortgage payments or property tax. When selling your house, there are multiple home-selling options; these two ways to sell a house are useful but entirely different. The two prevalent home-selling methods are listing the home on the real estate market with a licensed real estate agent or selling the house directly to a property investor, most of the time also known as a cash home buyer. It’s vital to understand what both home-selling options have to offer.
Some Reasons Homeowners Are Forced to Sell
Homeowners must sell their property for many reasons, including falling behind on a mortgage, being unable to complete essential maintenance tasks, or even relocating to a new area or home. Each house seller has different needs, which influences the time they need to sell their home; some people desire a fast sale, typically within a week or two, while other homeowners have the ability to wait months to complete the property sale. Also, some homeowners have the money and ability to complete renovations to receive the largest profit on the sale, while others need to sell their property in its current condition. Below are some standard causes why a homeowner needs to sell:
- Home repairs can be very expensive, some homeowners do not have the money or resources to complete repairs or updates.
- We live life on life’s terms – things happen in life and can lead to homeowners falling behind on their mortgage payments or property taxes, which leads to foreclosure.
- Relocating to a new area for employment opportunities, being closer to loved ones, or any other personal reason.
- As we age, moving around our homes can become complicated, especially when the property has steps. Most homeowners eventually need to downsize or move into a larger home due to aging or growing the size of their families.
- Over time neighborhoods tend to change, at times for the worse. Property owners end up with a desire to move to a better neighborhood.
Compare: Sell a House With Agent Vs Home Investor
Selling a house with a licensed realtor and selling to a cash buyer or home investor are two completely different approaches, each method with advantages and disadvantages. Here’s a comparison of using these two routes:
Selling Your House With A Realtor
The process of using an agent to sell a house can be complicated since there are many steps to take to finalize the property sale.
– The first step is to list your house on the market with a real estate agent. The property will be placed on different platforms that only agents can access, such as Bright MLS.
– Next, it’ll be important that the realtor use appropriate marketing methods: The agent will market your property through open houses, social media, online listings, and placing signs/flyers around the neighborhood.
– After showing the property to potential buyers, the agent will negotiate with buyer agents on your behalf. The negotiating process can be extensive and, at times, lead to the seller accepting below their asking price.
Time it Takes to Sell a House on the Market
The time frame of selling your home on the market can vary, ranging from a few weeks to several months. Using an agent comes with commissions and other real estate fees. Real estate agents’ commissions are usually a percentage of the sale price (around 5-6% on average). A benefit of using an agent is that, most likely, the home will sell near its market value, compared to selling at a lower value with a cash buyer.
Selling your house with a realtor usually requires house repairs or other home preparation. You may need to invest time and money in preparing the property for sale and taking care of the home repairs/renovations. Selling the traditional route also demands home inspections and other walkthroughs, while selling to a home investor requires no repairs or inspections.
It’s essential to weigh these negative aspects of using an agent compared to the benefits. Consider your precise needs/desires, the timeline you need to sell, and your financial goals to decide whether listing your house with an agent suits you. Additionally, doing research and choosing a reputable realtor can eliminate some of the drawbacks.
Selling to a Home Investor
The process of selling property to a home investor is very simple and straightforward.
- Selling your property directly to an investor without listing it on the open market, waiting for a qualified buyer to come along, and then going through the extensive process of selling the traditional route.
- The process of selling to an investor usually moves along so quickly compared to selling through a real estate agent. Most investors can close fast and often look for a quick closing, sometimes within a week but usually within two weeks.
- There are no commissions, closing costs, or other real estate fees. Saving the seller at least six to ten percent of the sales value. –
- As-Is Sale: Investors often purchase property in as-is condition, saving from costly and annoying repairs.
Things to consider:
- It’s important to determine your selling goals and timeline. If you need to sell fast, a home investor might be a better option considering their transaction is complete within a week or two. If time is not a constraint and you want to receive the most money, a real estate agent might be the more suitable method.
- Consider the overall cost for each route. Compare the costs associated with each option, including commissions, repairs, and other expenses.
- The current real estate market conditions can influence the success of each approach. In a seller’s market, you have more negotiating power with a realtor, while in a buyer’s market, a quick property sale to an investor is more desirable.
FSBO (For Sale By Owner)
Many homeowners may consider selling their property for sale by the owner; this method is appealing because it eliminates agent commissions, closing costs, and other fees. Most of the time, for purchase by the owner, doesn’t require the homeowner to make any repairs, but that aspect depends on the property buyer. A significant issue with selling your property “FSBO” is knowing your property’s value and ways to market the home to qualified buyers. Using the FSBO route may be challenging because it involves negotiating the sales price and completing all required documents. For sale by the owner, real estate provides the seller complete control of the real estate transaction, but having that control may not always be a good thing if the homeowner isn’t aware of what the house is worth and how to correctly complete the sale.
Selling a House is a Significant Decision
Selling your house is a huge decision; reviewing your options is vital to determining the best route to take. All options have ups and downs; one way involves a lot of time, money, and resources. Discuss your options with family members and friends, and get their feedback before deciding your selling method. Ultimately, choosing between a real estate agent or to a home investor depends on your situation and preferences. Contact a qualified buyer to explore your options if you are facing pre-foreclosure or your home requires costly repairs. Professional buyers and realtors are here to help homeowners through troubling times.