Many investors and some home owners with a do-it-yourself bent believe they can save a couple thousand dollars by selling their house or condo themselves. Some are quite happy with the outcome and others eventually turn to an agent to sell their property. So what does each choice re quire and yield?
For Sale By Owner
Now that you have your sign and hopefully will start getting calls. Many of these calls are from neophyte realtors looking for listings as they begin their careers. In looking to save realtor commission, you can price the house to benefit from the saving or you can price it a little lower to make the sale easier. Then you can show the place and point the reasons it would be a wise purchase.
Of course, you will get the usual range of looky-loos and investors looking for bargains. If your negotiating technique is primarily lowering your price to accommodate objections, perhaps this is not a good choice for you. You can get some help in this area by getting a book like Never Split the Difference by former FBI hostage negotiator, Chris Voss.
When you find a buyer you can download the legal forms or get them at most office supply stores. Be sure you fill them out properly or they could be worth less than the paper they are printed on. Then take them to an attorney or title company to set up the closing. If you get a deposit (and you should) it is not yours yet. The people doing the closing are usually escrow agents that can hold it until the sale is completed.
I find it unusual to make this recommendation, but if this is your first effort at selling a piece of real estate, I would recommend a good real estate attorney. They will keep you from a multitude of costly missteps along the way That is a real estate attorney, not one who dabbles in real estate while spending most of their time handling wills and divorces.
What Can An Agent Do For You?
In many ways it depends on the agent. As with any profession, there are good ones, there are learners, and there are shysters. If you go this route, don't just pick an name from an advertisement, ask around and talk to the people who have worked with them.
The good ones will know the market and be able to set the price to be competitive so it attracts buyers. They will tell you how to arrange you house to be attractive to buyers. They will list it on the MLS and promote it to other agents. They will handle the paperwork in a legal and professional manner, and follow through with arranging inspections and all the other details that provide for a smooth closing.
For that, you pay them multiple thousands of dollars... and they will probably pay for themselves by getting you more for your property than you would get yourself. But, can you get it cheaper with a discount agent? Remember what I said about good and not-so-good agents. Like most things in life, you get what you pay for.
A good real estate agent can make a lot of money, but don't think they are making it just on you. There are a lot of expenses in doing a good job for their client including a share that goes to the brokerage that provides facilities and services to the agent. There are memberships in national, state and local realtors organizations. They pay for those beautiful signs, the digital lock boxes, advertising, driving people around showing houses. You may only see the buyer they bring you at closing, but you may not know about the one or two dozen prospects they brought through along the way.
Most are hard working people, concentrating on selling your property – they don't get paid unless you do.
How About Investors?
If you've been around a while, you know the paperwork. You know, or should know, the title companies and attorneys, depending on your area, that can do a clean closing and take care of your interests. The question becomes, is handling the sale the best use of your time? Would you be better off looking at and preparing other properties? Only you can answer that question.
If you are looking to sell the place with owner financing, you are working with an entirely different economic reality. Realtors tend to stay away from these things, partly because of comfort level, and partly because there may not be enough there to pay their commission – in which case you have no initial income for your trouble.
These are deals that are generally best handled yourself as they tend to be easy sales since there are many people unable to qualify for a mortgage. Just make sure you do a thorough background check. On these deals, a good title company is worth it's weight in gold. Along with this you would need a cooperative residential mortgage loan originator (RMLO) to put together the paperwork to be sure you don't give someone a free house – it's worth the money. Even though they are gone from congress, Messrs Dodd and Frank are still looking over your shoulder “protecting” the consumer. Mortgage brokers can point you in the right direction if you don't know of any.
There is a lot of money involved in either choice, so you may want to give it a lot of thought.