When it comes time for selling your house, there are a few options for you to pursue. And really what it all boils down to is do you want to sell the house yourself, or have someone do it for you?
Your personal time is (hopefully) very important to you. If you have a job outside of the real estate profession, you, in all likelihood, know very littleabout the dealings of an actual house sale. Therefore, your time is better spent doing what you do on a day-to-day basis to derive your income.
And time itself – more specifically your personal time – becomes that much more important for you. Probably the last thing you want to do, is sell your house yourself.
If you are like me though, you ‘ll opt for someone else (realtor), or obtaining (at the very least) expert advice from someone who’s been there before to help sell the property for you.
I know in my own case, I would rather be doing what I do best, and that is remodeling – not selling. When you sell something yourself, you have to do things like schedule appointments in advance and hope the prospective homeowner will show up, just to name one, that can be by itself, very stressful.
Since my time is better spent at the actual remodeling aspect of flipping, I simply don’t have – nor want – to put the necessary work into what is required to sell the house.
Of course I’m motivated to have the property sold, but just not by me. It can be stressful for someone (such as myself) who is not used to selling houses. My job is to fix up the fixer-upper. I’ll let the realtor handle the sale because that is his/her job, one that I presumably would think they would enjoy, or they wouldn’t be doing it.
Having a real estate agent list your house on the MLS (multiple listing service) for your area, will generate leads for other interested parties to come view your property. It can be a very good thing in selling your house because your agent will bring qualified buyers to your house either by appointment, or through an ‘open house’, usually on Saturdays and Sundays, a time when many people like to go house hunting. This in turn could get your house sold pretty fast, assuming your house is in good shape, and completely ready to sell.
The down side to all of this real estate talk, is that they (agents) usually charge a 6% commission to do the selling. That will certainly be a bite out of your bottom line. Some flippers overlook this type of ‘cost’ when calculating their overall flipping expenditures to helpmake their numbers seem more palatable.
It’s certainly a trade-off. In my case it’s time/desire versus the overall expense of the commission.
Selling Your House Yourself
If you do in fact decide to go the FSBO (For Sale By Owner) route, understand that you will, in effect, be the defacto ‘agent’. Some of the more notable issues you’ll be responsible for include:
You will have to set the appointments and be available most any time of the day (and weekends), and into the evening hours. Not only being available to meet with people at any given time, but also to meet and talk with lowball buyers (investors) who figure that, as a FSBO, you’ll be more inclined to sell your house much cheaper than if there was an agent to deal with. You will conduct the walkthroughs and open house viewings, and answer all inquiries and questions.
- Legal Ramifications
Since you are selling your house, it is incumbent upon you to educate yourself about all the necessary paperwork and legal document, appraisals, inspections, etc. to have to have filled out, filed, and completed by the time you have the house on the market. Other items such as attorneys performing title searches, escrow companies, and selection of home and pest inspectors will also figure into play.
Unless you have lots of money sitting around waiting for you to spend, the whole notion behind your intent to flip in the first place is to make money. So the idea of having financing options will make sense because then you can open your sales range up considerably. This is where having a real estate agent does have it’s advantages, as they deal with lenders on a regular basis, and have the knowledge to lead a prospective home owner in the right direction.
Understand that the house may take awhile to sell. Even if you spend some money on advertising and marketing (classifieds/MLS), it won’t necessarily guarantee your house will sell right away. That usually happens in a hot market.
If you’ve got the time and enthusiasm for selling your house flip by yourself, then by all means, do the sale yourself and keep the commission that otherwise would go to the agents.
By utilizing the services of a professional real estate agent, however, you can get all of your concerns met,and in a timely manner. The commission paid out by you can be quite high in some cases, especially if the selling price is high, but for what you get versus the hassle and expense of selling your house yourself, I think it’s worth it.
There are some things you can do, too to lessen the impact a commission could to your bottom line. Decide to partner (as I have done) with a reputable realtor with an agreement to include his/her commission as part of the compensation for the flip itself. In my case, I make money in the renovation aspect, he makes some on the commission, and we then split remaining proceeds after paying all expenses.
… Secrets from an ‘Insider’
You might want to give a book by Pete Iannelli called How To Sell Your Home In 21 Days or Less – With or Without a Realtor“ to see if his information can help you in any way …