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Three Options For Selling Your Northern KY House PART 3
Quickly, in review, Option 1 (the most popular way to sell a home today) is working with a real estate agent.Option2, of course, is the d"do it yourself" or For Sale By Owner strategy.
Our THIRD Option, follows...
3) Selling Your House To A Real Estate Investor
A third option for selling your house is to work with a local real estate investor who buys houses. In virtually every city throughout the northern Kentucky and Greater Cincinnati areas there are independent real estate investors who buys houses and either fix them up and sell them, hold onto them as a rental property, or sell them to other real estate investors who will hold them as rental properties. Every area has reputable investors who you can contact to work with.
The general process of selling a house on your own is...
1. You connect with the investor and submit your information about your house and situation to them
2. The investor will evaluate the house, come up with a value for it, determine if any repairs are needed, find out what your goals are, and, make an offer that fits their buying criteria and helps you reach your goals
3. You look at the offer and decide if it works for you
4. If it's a fit, closing happens at a title company who prepares the documents, the investor buys with all cash so it's a quick close and you get your cash quickly
5. The house sale is complete
This process can take from 7 to 30 days (many times investors can close within 7 days if you need to). It is the option that many sellers go with when they need to sell their house fast with little hassle.
Cost: The cost to sell your house to a real estate investor is very low. There are no commissions or fees and often times the investor will actually pay 100% of the closing costs as well. This immediately eliminates thousands in costs that you would have to pay when working with an agent or selling the FSBO route.
The main cost when working with a real estate investor is the fact that an investor can't pay full retail value for a house. They usually look to buy houses at discounts that allow for them, of course, to earn a small profit on the deal - just like any other business turns a profit. But, for many people, selling at a lower price makes sense in return for the elimination of commissions and the much faster timeline to sell your house.
What many people don't take into consideration are the "carrying" costs when selling a house with an agent or the FSBO route. Carrying costs are all of the costs associated with owning and maintaining the house. The mortgage payments, taxes, insurance, utilities, HOA fees, etc. These can really add up. If your mortgage payments (including taxes and insurance) is $1,500, and you work with an agent and it takes them 8 months to sell the house at full market value, that means during the 8 months you paid $12,000 in payments on that house (which we all know most of your payment is interest going straight to the bank). Plus, you'll be paying the the commissions, etc. So, in the end, you could net in your pocket less if it takes a long time to sell your house with an agent for full retail value versus selling very quickly to an investor as a discount today.
A similar situation we're all familiar with is trading in your car to the dealership when you buy a new one. Most people trade in their car to the dealership to eliminate hassle and headache. We all know the dealership is paying a discounted rate and will turn around and sell your car for a markup and make a profit. But because of the convenience and speed, it makes sense for you to sell it for less money in return for not having to worry about taking it home, spending money on marketing it, and trying to sell it yourself
Timeline: The timeline to sell you house when working with a real estate investor can be very quick. Since investors buy with all cash (they don't use conventional banks which take more time) they can close very quickly. Many times you can have an offer on your house in less than 48 hours AND can close in less than 7 days from the time you accept it (sometimes it may take a week or two).
Pros: It's less headache. You can have your house sold this time next week if you wanted to; No fees, no commissions; many times an investor will pay all closingcosts as well, and the closing happens at a title company just like with an agent - making sure that's it's done correctly. In addition, most investors will buy your house "as is" and won't require you to repair anything, clean anything up, or even remove everything from the house. They'll pay for those costs themselves after the sale is closed.
Cons: Just like with anything, there are drawbacks. The main drawback may be that you are selling at a discount in return for the speed and convenience that a real estate investor is able to offer. If you're able to work with an agent and the agent is able to sell your house for full market value within 3 months (and you can wait 3 months) you may be ahead going that route. BUT, if it takes longer for the agent to sell it, the "carrying costs" we mentioned earlier start to eat away at any gains you may have working with an agent.
Who Selling To A Real Estate Investor Is For
This strategy is mainly for people who are willing to sacrifice a bit on sales price in exchange for a fast, convenient sale with no hassles. If you need to sell quickly (days or weeks rather than months), investors can close quickly. If you don't want to hassle with repairs or cleaning up the house, investors will take care of that for you. Investors are able to get a house at a fair price that leaves them room for a profit and you are able to get out from under the house and the payment and can move on more quickly.
|CONTINUE TO THE FINAL SECTION - CONCLUSION|
Terry is the Principal Broker at Regional Realty. He is a motivated Realtor specializing with investors and new home buyers located in the following areas; Alexandria, Ft. Thomas, Ft. Mitchell, Indepe....