Selling a house can be one of the most stressful and nerve-wracking experiences, especially when you’re trying to sell your house fast. There are already so many steps that come with a market sale before you even include some kind of deadline due to a lifestyle change, new job, or financial issues.
If you’re trying to sell your house fast, you also need to make sure you’re being smart about your decisions. It’s easy to let a deadline get in the way of common sense, but that’s when you get yourself into trouble. All of a sudden, you’re losing ground and money all in the name of closing the sale quickly. Not to mention that if you’re going to list your house on the market, there are so many third parties and legal loopholes to jump through that the lag between the time you list and time you close is liable to drive you crazy.
It’s important to review all your options when selling a house fast. You want to be ready for all the potential pitfalls and problems ahead of you. You also want to understand the pros and cons that come with each choice you make. You can avoid all the hassle and time by just sell your house as-is to an investor, or one of the other options.
Your options to sell your house include:
- Listing your house with a real estate agent or Realtor in your area.
- Selling the house yourself (For Sale By Owner).
- Seeing if you can qualify for a short sale.
- Sell your house at auction to the highest bidder.
- Sell your house as-is for cash to an investor or cash buyer.
Let’s take a closer look at each option to see which one is right for you.
Option 1: Listing Your House With a Real Estate Agent
Often, when homeowners consider selling their house, they look to hire a real estate agent who will then list your house on the open market. Once that happens and the house is prepared and marketed, buyers start lining up to make offers. Eventually, you and a buyer negotiate a final sale price and then close following a process that usually takes at least two or three months.
The benefit of working with a real estate agent is that they will handle many of the responsibilities that come with a market sale. In theory, that person will understand the fundamentals of the local real estate market and have expertise in marketing, negotiations, and legal requirements.
Conversely, when you’re selling your house with a real estate agent, you are often at the mercy of the open market and buyers. There’s only so much an agent can control. There are so many different factors at play when you list your house on the open market and it’s going to take months for an agent to sell your house, assuming everything goes great. Remember that even if a market buyer agrees to buy your house today, you still have to wait weeks and months for lender approvals, inspections, title searches, and more. Your real estate agent can guide you but they can only speed up the process so much.
Also, your real estate agent is going to take a commission off the final sale price for selling your house. You should expect to pay five or six percent of the sale price to the agent, which is a pretty big chunk of change regardless of how much you sell the house for
Option 2: For Sale By Owner
A “ For Sale By Owner (FSBO)” sale is exactly what it sounds like. It’s when a homeowner decides to list their property by themselves without working with a real estate agent. There is an obvious reason to go this route, which is to avoid paying real estate agent fees. In theory, it means you’re going to keep the thousands of dollars your agent would get from the final sale price.
The flip side is that, because you didn’t hire a real estate agent, it now falls to you to handle every aspect of the home sale. Do you know how to price your house properly for listings? Do you know the right way to market your house? Are you comfortable hosting multiple open houses and walk-throughs? What about negotiations, do you feel comfortable sitting at the table and fighting for the price you want?
A real estate agent earns their commission by handling all of these things as well as guiding you with their knowledge about the housing market. And while you might theoretically save some money by not hiring them, statistics say that FSBO sales generate lower sale prices in general, so you might end up losing out on that money anyway. Plus, the buyer’s agent still gets their cut of the fee, which comes out of the sale price.
Option 3: Short Sales
If the reason you’re selling your house fast is that you’re behind on mortgage payments and it doesn’t look like you’ll be able to make good on then, a short sale might be an option for you. A short sale means that the proceeds of the sale will ultimately fall short of the total debt owed, but the lender has approved the sale in order to begin recouping costs and avoiding foreclosure. As you might imagine, a lender needs to approve a short sale before it happens. Surprisingly, they are often for a short sale because getting something now is better than getting nothing and then spending money on the foreclosure and recovery process.
Before you can list your house in a short sale, you have to agree on a sale price with your lender. That price will be the appraised value of the house or less than it. The big thing is that you don’t get to set the terms of the deal even if you have larger debt amounts. The value of the home will dictate the sale price. So what that means is that even if you sell the house in a short sale, that may not cover what you owe and your lender might still want to see you pay the remainder. A short sale is a helpful tool when you’re in a bad financial spot but it’s not the cure-all some might think it is.
Option 4: Sell Your House at Auction
You might assume that selling your house at auction is just for when the bank owns it but anyone can sell their house this way. If you’re trying to sell fast it is certainly one way to do that. Auction homes usually take around 45 to 60 days from the listing to sale closure, so if you consider two months a “fast” sale then it can work for you.
Of course, the risk of selling at auction is that you have no control over the sale price. You can set a minimum bid that you’ll accept but once the auction begins you have to accept whatever the final bid is, assuming it meets the minimum. It’s very possible the final price won’t be what you want it to be. There’s also the possibility the auction winner will back out of the sale afterward, even at legal risk to themselves. So there are a lot of potential risks involved with an auction sale.
Option 5: Sell Your House As-Is to an Investor
Your best option when looking to sell your house fast is to sell your house to a home-buying investor. When you sell your house as-is to a home investor like Nexus Homebuyers, you’re removing so many of the problems and issues that bubble up in all the other options. And if your goal really is to sell your house fast, there is no faster way than to get a cash offer from an investor. They’ll make you an offer as fast as 24 hours after contacting them and they can close the sale in a matter of days, depending on how fast you want to move.
A real estate agent is going to take a commission fee for their services and time. That commission usually ends up being around five or six percent of the final sale price, depending on many factors, including who you work with.
Let’s say you sell your house for $300,000. Your agent will take roughly $15,000 to $18,000, and then split that number with the buyer’s agent. That’s a huge amount of money to hand over, even if your sale price is less than that. When you sell your house to a cash buyer, you will avoid these kinds of commission fees because there is no real estate agent involved in the process. You keep everything you are paid for your house.
Even if you’ve taken very good care of your house, selling it on the market means you’ll have to make some repairs in order to appeal to a wide range of buyers. It might have been okay for you to deal with the issues while you live there, but market buyers don’t want to settle for your house in disrepair when there are nicer houses available down the street. This means you have to pay a couple of hundred bucks for a pre-inspection report that will help you identify issues worth fixing. You’re likely to find some repairs that are simple, and you can handle, while you’ll also find some repairs that require major work, such as mold damage or flooding. That’s when you bring in an expert and that’s going to cost you a lot of money.
Selling To An Investor Is Easy – As Is Means No Repairs
When you sell to an investor, you’re selling the house as-is. That means they buy the house from you in its current condition. No need for repairs or fixing anything. No need to even clean up after yourself. They will buy the house in its current condition for cash and not require anything else from you.
When you sell a house on the open market, you have to appeal to the widest set of potential buyers, many of whom have a different style to you. That’s where a home staging company comes in. A stager makes your house look as appealing as possible for the widest audience. That means everything from rearranging furniture to bringing in new furniture to altering your home decor. Costs involved often range between $2,000 to $3,500. People pay it because a large number of people in real estate say it makes a difference and helps a house sell faster on the open market.
But when you sell directly to an investor, you don’t need to stage your house. They will buy it as-is, no need to change anything.
The same goes for hiring a professional photographer. Selling your house on the open market means you need an attractive listing to stand out from the crowd, which means you need professional photos that really pop.
Selling To An Investor Allows You To Skip Hefty Expenses
When you sell your house fast to an investor, you don’t have to worry about home staging or photography. An investor doesn’t need to be wowed by great photos. They’re not even interested in what the house looks like right now. They’re interested in the potential of the property. So it doesn’t matter.
When you enter into negotiations with a potential market buyer there needs to be a sense of back and forth between you. That means that the price you’ve listed probably isn’t going to be the price they’re interested in paying. While seller concessions aren’t a “cost”, they are something that cuts into the money you walk away from the sale with. That could include you dropping the price, covering some or all of the closing costs, waiving fees, or something else altogether. It’s hard to know what kind of concessions you’ll need to make but if it’s a buyer’s market you’re likely going to need to sweeten the deal to close, and that means less money for you.
There are no concessions when you sell your house to a home investor because there are no negotiations. They make you an offer and if you accept they pay you in cash. That’s it.
Closing costs vary but almost always include insurance fees, appraisal fees, survey fees, credit report fees, transfer taxes, and title fees. Then there are issues such as loan payoffs, prepayment penalties on previous mortgages, and HOA dues, amongst others.
You don’t have to worry about many of those costs when you sell your house to an investor. In fact, they’ll often pay for the closing costs themselves so you don’t have to worry about them. You don’t have to worry about title fees or transfer taxes as they’ll get sorted out as part of the transaction.