The prospect of selling your home and moving to a bigger property situated in the heart of the city can be enticing. But home selling can be tiring at the same time since it takes more than sticking a “for sale” sign in your front yard.
Apart from the various legal processes that you have to hurdle, selling your property requires patience, a willingness to learn, and knowing where to look for buyers, as well as flexing your negotiation skills. Besides the lengthy process, selling a house on your own can save you thousands of cash.
Current industry practice dictates a seller to pay a total of 6% commission of the property sale value to your agent and your buyer’s broker. If you’re cash-strapped, you may want to skip this and keep the fees to yourself or fund planned improvements in your future home.
Finding the best deal for your home may be challenging, but it’s not impossible. If you want to avoid paying thousands of commission fees to a professional real estate agent, consider the following options:
1. For Sale by Owner (FSBO)
Selling a house by yourself is not an easy task, to say the least. At the minimum, you have to do these steps:
· Determine the fair market value of our home: You can either use online real estate valuation sites, hire a licensed appraiser or get a competitive market analysis from a real estate agent.
· Get your home show-ready: Cleaning all the nooks and crannies, repainting, decluttering, and landscaping can help buyers like your home better. Depending on your property’s current condition, you may need to make minor repairs or negotiate the repairs after a home inspection and upgrades.
· Invest in advertising: Putting up the “for sale” sign, creating flyers or printed ads, putting your home up for sale online, and hosting an open house, can help increase awareness of your property on sale.
If you’re confident that your house is a hot commodity, and you’ve got enough time to screen potential buyers and show them your home, as well as prepare the necessary contracts and other legal documents, go for it.
In between accepting calls from interested parties, you also need to declutter, clean, and restore the house to its pristine condition to entice buyers. To increase the chances of selling your property, take photos and draft an attractive selling description before publishing your listing online.
With this commission-saving option, you’ll still to hire professional services, such as a home appraiser or home inspector and a real estate attorney.
The former can provide you with an estimate of your property value considering factors such as your property’s situation, location, and the prices of houses similar to your property in relation to the current market situation. The appraiser can also give you some insights into the housing market in 2021, which can be useful if you’re still looking to buy a new house. Additionally, you can check online listings of the homes near you to study whether you need to adjust your price.
Meanwhile, hiring a real estate lawyer to represent your interests ensures that you won’t be trapped in a one-sided deal. An attorney can likewise guide you in keeping the transaction legal under the state and federal real estate laws.
2. Home-buying Companies
In a hurry to sell but don’t have the cash for repairs? Companies that buy houses can save you from all the hassles of listing, screening, showing, and negotiating. Unlike traditional home selling transactions brokered by real estate agents, home-buying companies are willing to pay cash for your house on an as-is basis.
The whole process takes only a few days on average, and involves you, the seller, to provide information about your home through photos, videos, and other documents. The company sends you an offer, and if you accept their offer, the transaction is finalized.
Overall, home-buying companies can provide property sellers with a smooth transaction. For one, there is no need to wait for the bank appraisal and approval before financing the buyer’s mortgage. As property buying companies will pay for your home no matter in which condition it’s in, you don’t need to spend time cleaning your entire house or fixing the leaking toilet. The company will make these home improvements before selling or renting them out to interested parties.
In some cases, the seller can negotiate for more flexible move-out dates, so you don’t have to rush or be pressured into looking for a place right away, only to commit these common mistakes when buying a house.
Perhaps the only downside is dealing with home-buying companies is that the offer price may be on the lower side.
3. Fee-Only or MLS Agents
You can also collaborate with a real estate agent on a fee-only basis. This means you can choose which services you need help with. Otherwise known as discount agents or MLS (multiple listing services) agents, these professionals will not seek a 6% commission upon closing, but charge only a minimal amount for a specifically agreed service(s), typically your property’s exposure to the MLS.
To the uninitiated, MLS is a comprehensive database of listed properties that real estate brokers have access to in a specific area. This complete listing allows brokers to acquire a list of updated properties being sold, even those that are not published online.
MLS agents work differently. Some charge flat rates to specific services while others charge more flexible services and therefore more assistance options, especially to first-time sellers.
Some fee-only real estate agents may offer one or many of the following services:
· Listing your property in the MLS
· Assistance in setting a price for your property as home appraisers do
· Providing you with suggestions on how to increase your property value
· Facilitating photo shoots and helping you come up with an attractive description to help with your listing
· Screening calls from potential buyers
· Setting appointments for showing your home
· Drafting purchase agreement
· Negotiating with buyers for the sale price
If you’ve decided you need help with any or just a few of these services, consider asking the fee-only agent for help with a home appraiser or inspector and real estate attorney, as you may be able to save costs.
Another route to take is by working with your buyer’s agent. Try negotiating for a lower rate but be ready for the agent to reject your offer. Otherwise, request your buyer to add the agent’s fee or commission to the total sale price so you won’t have to pay for it.
Closing the Sale
Completing the transaction is predominantly a legal process, and your closing agent will likely be in charge of it.
In most instances, the buyer’s mortgage can delay the sale, as most lenders need to set a few conditions in between the time that the loan was approved and the home sale closing period. Failure to meet these requirements may result in the buyer’s loan approval being withdrawn. So, make sure to get a copy of the documents so you can work with the buyer to ensure the deal with finality.
The Takeaway
Selling a property is not easy, and depending on your situation, you may have to take the short or long route. Doing it on your own is complex as compared to hiring a real estate agent, but if you’re successful in closing the sale, the thousands that you save on commission fees may be well worth it.
On the other hand, if you’re in a rush to sell your home and don’t want to go through all the hassle of looking for buyers, approaching home-buying companies is the way to go.
