Selling your home or property can be a daunting and stressful process, since there are just so many variables to consider. If you are not a regular real estate investor or financial whiz, it can be difficult to know how to go about making sure you get the greatest return on your investment when it comes time to sell. Even understanding the options can be overwhelming, if you aren’t familiar with terms or methods used to sell properties.
What Should Be Considered When Selling Your Home?
There are so many different ways to go about selling your home. Before you review the options, and possibly make a decision about the method in which you will sell, there are a few things that you’ll want to consider:
- Are you pressed for time? Maybe you have an impending move to a new location for work, or maybe you are just downsizing to make life easier. The amount of time in which you need to sell your property can greatly influence which method is best for selling your home.
- Do you have equity in the property? Fees, commissions, repairs, and negotiations can cost money. Make sure you have adequate equity for the way you choose to sell your home, otherwise, you may need to pay cash out of pocket, depending on the method of sale.
- Do you want to negotiate terms of the sale with the buyer, whether through an agent or directly? If you have equity and time, this is an aspect of selling to which you’ll want to give consideration. Depending on whether houses in your area are in demand or slow selling will impact this process. Consider if you want to make repairs that may be found during an inspection or that are needed for the buyer to get financing on the home.
- How much money are you willing to accept for your property? Are you willing to accept a low offer to move more quickly? What’s ideal? What’s realistic? What’s your bottom line?
What Are My Selling Options?
Once you have a better idea of where you stand and what you are willing to do or accept, you can start to review the possible options. Below are listed a few of them to give you a little insight as to how they work so you can begin to determine what may work best for you.
For Sale By Owner (FSBO):
- Seller markets their home and handles all of the terms of the sale with the buyer
- Seller is responsible for abiding by applicable laws
- Terms are negotiable
- Length of time between deciding to sell and closing widely varies
- Payment of purchase price – less any deposits, taxes due and seller paid closing fees – is paid to the seller at a closing
Sell on Contract or Rent to Own:
- Seller or Realtor™markets the home and handles all of the terms of the sale with the buyer
- A portion of the buyer’s monthly lease/rent payment goes toward the down payment on the property for a fixed term
- If there is no real estate agent involved, the seller is responsible for abiding by applicable laws
- Terms are negotiable
- The timeframe on the contract length is considerable and can be anywhere from one year to many years before closing
- At the end of the contract, the buyer must obtain financing and complete the sale
- Payment of purchase price – less the contract payments, taxes due, closing fees, and/or commissions – is paid to the seller at a closing
Traditional Listing with a Realtor™:
- Seller enters into a contract with a Realtor™ for a specific duration of time
- Realtor™ markets the home and handles all of the terms of the sale with the buyer
- Realtor is responsible to ensure that all applicable laws are followed
- Terms are negotiable
- Can be subject to financing requirements, such as repairs and seller paid fees
- Length of time from listing to closing depends on acquiring a buyer through marketing and showings
- Payment of purchase price – less any deposits, taxes due, escrowed repairs, closing fees and Realtor™ commissions – is paid to the seller at a closing
Real Estate Auction:
There are two types of Real Estate Auctions– absoluteand reserve. An absolute auction is where there is no minimum price set by the seller and the highest bidder wins the property. A reserve auction is when the seller sets an acceptable price for the property. If the highest bid comes under this price, the seller has the right to accept or refuse the bid.
- Both types require a contract between the seller and the auctioneer
- Auctioneer markets the property and handles all of the terms of the sale with the buyer
- Auctioneer must follow all applicable laws
- There are no negotiations between the buyer and the seller
- Property is sold as-is with no contingencies for financing or repairs
- The timeframe for selling by auction is usually 30-45 days from the time of entering into contract for the auction, depending on the agreement between the seller and the auctioneer
- Payment for the purchase price is received at closing, which typically 30-60 days after the auction
Making an Informed Decision
As we’ve illustrated, there are lots of variables when it comes to selling your home or property. We’ve by no means covered them all here but would be more than happy to discuss them with you to help you make an informed decision. Give LAWSON & CO a call at 317-745-6404 and we will help you navigate through the details!