Sell your house fast in four steps
If you’re sitting on a piece of property that you need to get rid of it can feel like the property is sitting on top of you. What do you do if you want to sell your home fast without being taken advantage of? Here’s the four step process to making sure you can sell your house quickly and mitigate as much risk and personal liability as possible:
Step #1: Mitigate Risk
If you are in a situation where you need to sell a house quickly chances are something has gone wrong. There’s a life circumstance (divorce, relocation, job loss, cash shortfall, inheritance, etc.) that has placed you in this position. You want to make sure that, regardless of what has already gone wrong, you don’t let the situation get any worse. The first question that you need to answer is: Does the property place me legally or financially at risk? Owning a piece of property is accompanied with certain responsibilities and liabilities that not everyone is aware of. For example:
Do you own a home with a pool?
- The risks: If you own a home with a pool and someone is injured or drowns in the pool you can be held personally liable; even if the injured party was there without permission.
- What to do: Check local laws and guidelines to determine what is required of you in order to be in compliance so you’re not liable if something happens.
Does the home have an HOA?
- The risks: If you own a home with an HOA and default on the payments the home owners association can do much more than place a lien against your property, they can actually garnish your wages. Many HOAs can also request additional funds for community improvement initiatives which you will be required to pay as part of the agreement you signed when you purchased the property.
- What to do: Check your HOA CC&Rs (codes, covenants and restrictions) in order to determine what liabilities you have in connection with the HOA and what steps your HOA may take in order to collect on any past due payments.
Is your home a health or safety risk?
- The risks: Hoarder homes are at a greater risk for house fires as are homes with unkempt yards. Houses with old or poorly managed electrical wiring are at a greater risk of electrical fires. A house with still water (like a flooded area or an un-serviced pool) can become breeding grounds for mosquitoes and cause health risks. All of these issues not only place the home inhabitants at risk but also put you at personal risk as you can be held liable for anything that happens as a result of these issues. If your property were to catch fire and spread to a neighbors home there is a historic legal precedent in many states for a lawsuit against you.
- What to do: Make sure your house does not pose a health or safety risk. If it does take any necessary measures within your power to correct those issues as soon as possible.
Step #2: Understand Your Situation
There are some home sale avenues that might not be available to you simply by virtue of your circumstances. For example:
Does your home have any liens or levies against it?
- The problem: In order to transfer clear title of a home from one person to another person all liens against a home must be paid off. What does this mean? Before you can sell your house you have to pay off any and all liens that are currently filed against your property. This puts many homeowners in a sticky Catch 22 because the only way they could afford to pay off the liens would be to sell the house.
- The solution: In circumstances like these it makes a lot of sense to avoid the retail market and go directly to property investors like Fair Property Buyers. We have a decade of experience dealing with situations like these and can help you navigate them without costing you a cent. We can negotiate with creditors, fight false judgements or liens and, in many cases, even pay the lien off for you to help ensure a smooth transaction.
Does the house require any repairs, updates or maintenance?
- The problem: This is where things can get really tricky. In order to sell a house on the retail market the house has to be “retail ready” which essentially means “like new condition”. You can always try to sell your house as-is but you’re going to have a very difficult time finding a professional Realtor to represent you and even then you’ll probably find that most of the offers you get are low ballers and “home flippers” looking for a deal. Not to mention the Realtors’ commissions and closing costs which can completely wipe out any profits you were expecting. In addition to all of that you’ll need to make sure that you disclose everything you know about the home in terms of damage and defects. If you try to hide known damages or defects to a home you can be sued by the purchasing party.
- The solution: Take an honest inventory of the repairs required on your home and try to get a sense as to what they will cost to take care of. If you’re in a position to make some cosmetic repairs to your home it is advisable to do so as it’ll go a long way in trying to secure a quality Realtor and sell your house. If you don’t have the capital available to make the necessary repairs to bring your house to “like new” condition you’re much better off reaching out to a real estate investor like Fair Property Buyers for a free and immediate cash offer. You won’t be required to make any repairs, we’ll buy the house as-is and you won’t pay any closing costs or Realtors’ commissions.
Are you in full ownership control over the property?
- The problem: property ownership laws vary by state so it’s important that you have a firm understanding of your ownership position with the property. In cases of divorce, inheritance, probate, liens, judgements, bankruptcy, litigation or ownership disputes the rules as to who owns a property and what avenues are available to the property owner can be convoluted at best.
- The solution: if you’ve decided not to work with a real estate investment professional your only other option may be hiring an attorney. While legal counsel can be expensive it is often your only recourse when attempting to establish, retain or act upon your ownership rights. If you decide to let Fair Property Buyers purchase your home we have in-house legal services available to us to help solve your problems at absolutely no cost to you.
Step #3: Understand Your Options When Selling A Home
There are generally three core avenues to selling a home:
- Sell your house through a Realtor which is what we call a “traditional sale”
- Sell your house yourself which is what we call a “for sale by owner” or FSBO
- Sell your house to us which is what we call a “wholesale transaction”
Let’s examine each of these options:
Traditional sale through a Realtor
The Pros: when you decide to sell your home through a Realtor you’re essentially hiring a sales representative (ie the Realtor) to work on your behalf. A lot of the leg work is done for you; taking pictures of the house, marketing the property, showing the home to potential buyers, negotiating the deal and managing certain aspects of the closing. Your home also experiences a higher level of retail visibility because a Realtor can put your home on the MLS which is a private network that only Realtors and Brokerages can use.
- Turnaround time: the average retail sale can take well over six months with some homes (depending on your market) taking more than a year to sell. You need to sell your house FAST! Sadly Realtors can’t help you with this because they’re at the mercy of the market.
- Retail ready – when you sell your home on the retail market you typically need to have it in “as new” condition, especially if you want to attract a Realtor who is worth the cost of their commission. Remember, Realtors only get paid when your home sells so Realtors tend not to take on properties that will be difficult to sell unless they’re desperate for listings. To prepare your house for the market you are going to need to pay out of pocket to make all of the necessary updates and upgrades which can destroy your equity position.
- Commissions – Realtors don’t work for free! The industry standard commission structure for Realtors is 6% (3% for the Realtor that represents that buyer and 3% for the Realtor that represents the seller). Here’s the issue – both ends of the commission come out of the sales price meaning you’re essentially paying for all of it. And while 6% doesn’t sound like a lot make sure you do the math: if you’re selling a $200,000 house 6% is $12,000. If you only have $20,000 in equity you’re making less money than the Realtors! And that doesn’t take into consideration the cost for repairs that you had to make or the closing fees for the transaction. Which leads us to our next bullet point.
- Regulatory compliance – because the vast majority of buyers are borrowing the funds to purchase your home from the bank you are required to jump through a myriad of bank imposed (and sometimes government imposed) red tape. This includes a massive caveat to all bank funded sales which is the appraisal period. Even after you and the purchasing party reach an agreement the bank needs to come in and essentially consent to the deal and determine that your home is worth the agreed upon amount.
- Fees, fees and more fees – a house is a big transaction which means it is accompanied by a lot of logistical headaches. When you sell a house you usually find yourself paying for things like closing costs, title fees and inspection reports the costs for which add up. Combine that with the costs required to bring the house to a retail ready state and the money you’ll have to pay a Realtor and you can begin to see how the retail avenue can obliterate your bottom line.
For Sale By Owner (FSBO)
You will rarely find a real estate professional that gives any merit to this approach for selling a home. As one of the largest financial decisions the majority of people will ever make, buying and selling a house requires expertise and consultative guidance from a professional. With that said there are people who opt to try to sell on their own so we’ll go ahead and cover it.
The Pros: In theory people assume that selling a house on their own will save them from paying a commission. This is flawed logic but we’ll discuss that in the cons. When you sell your house on your own you get to dictate the terms of the sales process, when you show the home, what repairs you decide are necessary and how much effort goes into the marketing of your home.
The Cons: even if you don’t want to use a Realtor the overwhelming majority of buyers are using Realtors (because it doesn’t cost them anything). Buyers use Realtors, Realtors use the MLS and you can’t get your house on the MLS without a Realtor. Basically, attempting to sell your house yourself puts you in a position of absolute zero visibility. Even if you were able to attract a buyer you won’t benefit from the market since competition for your house will be low and you won’t have the benefit of a seasoned professional assisting you with a negotiation. We have no vested interest in you using a Realtor one way or another, take it from an impartial party: don’t try to sell your house alone, it’s a mistake.
Sell to Fair Property Buyers
- No repairs required
- No inspections needed
- No home showings
- No termite reporting
- No cleanup needed
- No appraisals
- No marketing time
- No commissions
- No closing costs
- No fees of any kind
- FAST closing
- Cash in your hands at time of close (cashier’s check or bank wire)
The Cons: There aren’t any! A Realtor will tell you that you will sell your house for more money if you sell on the retail market instead of selling to Fair Property Buyers. While this might be true in theory it’s important that you do the homework and understand the true cost of selling your home. After you pay for repairs, commissions, closing costs, fees and holding costs (the money you spend on the house for the months it is sitting on the market) as well as the opportunity cost you pay by not being able to move on and make use of the money that’s tied up in your home chances are you’re losing money by going the retail route. The actual sale price of your home might be a little higher (emphasis on might be! Get a cash offer from us before making a decision) but after you take into consideration everything we’ve discussed the money you put into your pocket is much less.
Step #4: Take Action!
Analysis paralysis is a very real danger when dealing with a problem as big as a house. You need to make sure you take action quickly in order to avoid as much damage and cost (both personal and financial) as possible.
If you’re not sure what to do call us! We provide absolutely free expert consultation just for the opportunity to earn your business.