The real estate industry is evolving, and there’s no longer just one tried-and-true way to do things.
Thanks to technological advances, innovative new processes, and an ever-revolving door of start-ups and creative thinkers, buyers and sellers now have tons of options when deciding how to start, manage and, ultimately, finalize their transactions.
Take selling a home, for example. In the old days, it was simple. You called up one of the few real estate agents in the area, and they took the reins from there. It took a few months and some negotiating, but eventually, your house was sold and the deal was done.
Though that option still exists, sellers now have other choices when putting their homes on the market as well — ones that offer unique advantages (and, of course, disadvantages) all their own.
Are you thinking of selling your home in the coming year? Here are the three main options you have to choose from:
Use a real estate agent.
A huge chunk of homeowners still use a real estate agent when selling their home — and there are a lot of perks to doing so. For one, it means less work for you. There’s someone to walk you through every step of the process, and there’s no second-guessing what comes next or what your best move is. This hand-holding and guidance can be particularly helpful if you’re a first-time home seller.
Agents also come with a wealth of knowledge and expertise that ensure you price your home properly, market it comprehensively and negotiate the best deal possible in your marketplace. And in that they coordinate with your lender, inspector, and any other vendors you come across in the process — using an agent can seem like a pretty sweet deal.
Still, agents don’t come free. The typical seller’s agent takes 6 to 7% of the final transaction price, which equates to anywhere from a few thousand bucks to tens of thousands on really high-priced properties. While the cash does come out of the payment from the buyer (you don’t actually write a check yourself), it’s still a huge chunk of change you could use toward moving costs, new furniture, etc.
For Sale By Owner (FSBO).
If your first option is to use an agent, then your second choice is to forgo one. This is called a FSBO (or For Sale By Owner). Essentially, it means you handle the entirety of your transaction yourself. It sounds simple enough, but you have to remember, there are dozens of steps to selling a home. You have to stage it, photograph it, write the listing, market the listing, host open houses, field and negotiate offers, write up the contract, deal with appraisal and inspection issues and then, finally, oversee the closing. Unless you’re a real estate pro yourself (or someone with just a ton of time on your hands), it can be a difficult process to manage, to say the least.
FSBOs are also statistically proven to sell for less. According to the National Association of Realtors, FSBO properties bring in about $60,000 less than agent-listed ones. On top of this, FSBO sales also take longer, often due to inaccurate pricing or poor marketing.
But a FSBO also allows you to save thousands — maybe even tens of thousands — so if you’re really trying to cut corners it can be a smart move. Just keep in mind, unless you’re well-versed in contracts, you’ll likely need to hire a real estate attorney to cross the Ts and dot the Is.
Try an iBuyer.
Your third option is a fairly new one called an “iBuyer.” These are web-based companies that use a combination of algorithms and market data to make sellers offers on-the-spot for their homes. If you like the offer, the iBuyer wires you the money, takes your property, fixes it up and re-sells it on the open market. If you don’t like the offer, you’re free to explore other options.
The iBuyer model has been a popular one with millennials and sellers who need to move fast. Rather than deal with agents, commissions, and weeks upon weeks of tedious showings, sellers get a quick, easy and instant sale when using an iBuyer. The only catch? These buyers typically offer a bit less than market value. The trade-off is the convenience and ease.
The beauty of the iBuyer model is that it doesn’t require a commitment. Getting a quote from an iBuyer doesn’t preclude you from turning down the offer and going with a traditional real estate agent instead. It just gives you more options — and in today’s fast-moving market, that can be a huge advantage.
Selling Your Home?
If you’re considering selling your existing house and trading up, make sure to get pre-qualified for your new mortgage loan before you start shopping. Text QUALIFY to 22722 to discover in seconds if you pre-qualify.