Imagine being able to sell your home without having to worry about marketing, waiting, or paying expensive commissions or fees. You might not even need to pay closing costs either. These are the advantages of selling your home to a real estate investor. A title company will still be involved to handle the paperwork and make sure the closing happens smoothly. If there are repairs needed, the investor won’t expect you to pay for them. Everything on the property is sold as-is. The investor covers virtually all these extra costs. You don’t pay for anything.
The biggest disadvantage is that you’re selling your home at below market value. In other words, you’re giving a discount to the real estate investor so that they’ll purchase your home quickly. In some situations, you could just wait a few extra months using a real estate agent and receive the full market value of your home. It depends on the condition of your home and your current situation.
The reason to work with a real estate investor is if you must sell your home quickly. If you cannot afford to wait for months to sell your home, then a real estate investor is the best option. Otherwise, if you’re not in a crunch you could potentially make more money by choosing one of the other options and waiting a longer time. Just remember to consider the ongoing expenses of keeping the property as you wait for the right buyer to come along.
Real estate agents have access to a lot of exclusive marketing tools, especially the MLS. This can help you reach a wide variety of buyers whom you couldn’t reach on your own. Plus, agents can handle buyer questions, negotiations, house showings, and preparation of the closing documents.
The commission fee of the agent is expensive. Even though they are marketing your property listing, it is fairly standard marketing. Your listing could spend up to 12 months on the market before a sale takes place. Meanwhile, you’ll still be responsible for the upkeep and other bills related to the property until it sells.
Agents also try to target “retail buyers.” These types of buyers are searching for a new home to live in. The problem with retail buyers is they often want several showings before making up their mind. And even if they decide to purchase the house, their financing may not always get approved. As a result, all the time spent negotiating and dealing with that buyer was for nothing.
Lastly, retail buyers usually want the seller to cover a significant portion of the closing costs. Then you’ll need to worry about both the agents’ commission fees and probably half of the closing costs.
If you are not in a hurry to sell your home and you’d rather wait up to 12 months to get a market value price for it, then using a real estate agent may be the best option for you. The agent fees won’t be as noticeable if you have a higher sales price.
You’ll save a lot of money selling your own property because you don’t have agent fees to worry about. You also have total control over the marketing and negotiations.
You’ll need to spend more time selling your home. If you’re inexperienced at the whole process, then you’ll need to educate yourself on how to prepare paperwork, create effective ads, determining the value of your home, and so on. This whole process could become overwhelming for you to handle by yourself unless you know what you’re doing. At least an agent can take all this stress off your shoulders for you.
FSBO listings are better for homeowners who are not in a hurry to sell their home and don’t wish to pay expensive agent fees. This is for the homeowner who has the time and doesn’t mind showing their home several times a week/day. They also should be comfortable with marketing and negotiating when trying to sell FSBO.