There are essentially three ways to go when selling a property, and each option has it’s own pros and cons.
Realtor: By far the most common method of selling a property, using the experience of a seasoned listing agent is the default method. The biggest drawback is exorbitant commissions, but it’s not the only downside. Having a low barrier to entry, more agents than not don’t have enough experience, some are pushy, and much like attorneys many are downright lousy communicators. Also, with so much data now available online, what used to make real estate agents as the gate keepers to listings, the information is now readily available. Moreover, in this market (as of today’s date), finding good buyers is an afterthought. Still, there are definitely good reasons for bringing on an agent. Knowing where to price a property is very important. List too low, and you risk accepting too low a price, which could cost you thousands even tens of thousands. List too high, and it could sit, and if it sits too long buyers can get the impression something is wrong with the property. Also, having liability insurance Realtors usually have and knowing all of the required state disclosures can help you avoid a major liability.
FSBO: Pronounced “Fis-bow”, or, “For Sale By Owner” most obvious advantage is no commissions! Also, for the control freaks out there, you maintain full control of the transaction including who and when gets to see the property, you are negotiating directly instead of relying on someone else. However, the money you save on commissions you could very easily give back by accepting a low offer because when you go with an agent, it’s listed on the MLS (the database with all agent listings) and therefore you have many more eyeballs that see your listing. The more eyeballs, the more potential buyers, and the more potential buyers, the greater the likelihood of a higher price or even better a bidding war! Also, your liability goes up substantially. If the buyer is the litigious type and thinks they got a lemon, and you didn’t get the state required disclosures just right you better be ready to take out your checkbook.
Investor Buyer: Selling directly to a professional buyer is quickly becoming more mainstream than it used to be. iBuyers like Zillow, OpenDoor are further commoditizing real estate. The biggest advantage is fairly obvious- usually all cash with no contingencies. Prefessional buyers will buy the property “as-is, where-is” and that means you are DONE. Aside from filling out some paperwork, you don’t have to worry about any repairs, cleanup, weeds, mold, old furniture or junk. When selling either with an agent or FSBO there is almost always going to be an inspection period and an appraisal. This also means you can count on closing to take about 40-60 days assuming the buyer doesn’t cancel, and that happens about 1 out of 3 or 4 times here in Coachella Valley. The downside is that you usually aren’t going to net as much. Even though there are no commissions, an all-cash, fast closing usually means the offer will be some % under market. Make sure the buyer is reputable and watch out for “wholesalers”. A wholesaler will put your property under contract at a certain price and then shop it around to investors. Some will overpromise then midway through the transaction ask for a lower price. It’s important to understand the contract if you sell to an investor and know what contingencies or “weasel clauses” they have, if any.
The bottom line is that the right option on which method to use to sell your house depends on your personal situation. If your property shows great and you are in no rush to close, a traditional agent will typically yield you the highest return. There’s nothing wrong with selling a little under market if there is an opporunity to buy your dream house but you need the funds or you’ll miss out. Or, if you have a financial hardship and need the money sooner than later and you don’t have time for tire kickers and flaky buyers. Of the three options, the bottom man on the totem pole is selling FSBO. There is more risk involved, and there’s a good chance the money you save on commissions will be canceled out by the lack of potential buyers being exposed to your property.
At Coachella Valley HomeBuyers, we will handle it all! If you face expensive repairs, now is the perfect time for selling your house directly to Coachella Valley HomeBuyers. When you work with Coachella Valley HomeBuyers, there are no commissions or hidden fees that will be coming off of your cash payment at closing. Talk to the professional buyers at Coachella Valley HomeBuyers about all of the ways that selling your house directly to Coachella Valley HomeBuyers will save you money. Get a free, no-obligation offer from Coachella Valley HomeBuyers and see how easy we make the process! Send us a message or call Coachella Valley HomeBuyers at (760) 849-8115.