When it comes to selling your home, you have four main options. You can do everything yourself and follow the traditional route, you can hire an agent or agency to represent you and guide you throughout the process, you can list your home for auction, or you can sell it outright to a home buying organization.
Each method comes with its advantages and disadvantages. While outright sales are faster and perfect for anyone that needs cash and wants to avoid out-of-pocket expenses, they’re not for the sentimental. Selling through an agency can lift some of the burdens but take much longer. Selling yourself can be a lot of work, but it allows you to vet each buyer personally. For a more in-depth look at each option, keep reading.
FSBO: For Sale By Owner
If you have the time to spare and are willing to wait for the right buyer, in addition to putting on your showings and prepping your house all by yourself, FSBO could be the best bet for you. By listing the home for sale yourself, you may also be looking to save yourself the much-maligned 3% buyer’s agent commission.
For example, if you’re selling a home yourself with the median home value in the USA, $206,300– that means that selling it yourself effectively saves you $6,189 dollars. While it’s likely you’ll spend some of that on staging, prep, and parties or showings; you should still be able to pocket a nice amount in the end.
If you do want to sell your home yourself, don’t overlook making offers to your neighbors first. While it may seem like an unconventional strategy, some people find the power to choose their neighbors invaluable and may give you some definite leads- maybe even a quick sale.
Selling Your Home Through An Agent or Agency
Agents and agencies save you time and effort- for a price. As discussed above, you’ll have to fork over a commission to the agent or company for their time. Typically, that adds up to 3% of the selling price. Agents exist for a reason. If this is your first time selling a home, an experienced agent in your area should be able to tell you a reasonable approximation of the selling price you can expect, how long the sales process should take, and what you can do to reach any sales goals you might have.
Always do your homework before hiring an agent. While it might be tempting to hire a friend or family member, selling a home is a serious matter. Give yourself every advantage possible.
Selling Your Home at an Auction
Selling your house through an auction, either public or private, can result in fast cash (typically closing in 30 days.) It’s similar to a private sale, but a little less secure. Further, you have no up-front guarantee that your property will sell for any set amount (though you can set a reserve or minimum price) or that it will sell at all. And if they do sell, it’s at less than market value by 15 to 20% in many cases.
The downside, in addition to an unsecured selling price, is the cost of an auction. The upfront cost of marketing could be in the thousands, depending on how many potential buyers you are hoping to attract. On top of that, auctioneer fees can be as “minimal” as 1.5% of the final selling price but may be just as high as hiring an agent or even higher, depending on the area and demand.
There is, however, an added value of an auction. Some companies will volunteer to create a whole estate sale, marking up the contents of the house for sale as well as the house itself. This is deal in inheritance scenario if you just don’t want to empty the house yourself. Or if you happen to want a radically fresh start.
Home Buyers and Private Sales
This is an option that many people don’t hear enough about. This is the best option if you need fast cash. There are no commissions, no hidden fees, and you’ll know how much you’re getting upfront. You can even get a quote before you commit to anything at no cost to you. If you’re considering FSBO, don’t think your house is sale-ready, or are thinking an auction might be your only hope, this is something you should look into before proceeding.
For example, these Southern California home buyers offer a one-week close which is a much shorter term than the 60 days to 6 months an FSBO or agent sale may take. Further, they’ll even review offers for homes that have tenants, are in foreclosure, or that are behind on payments.
Which Method Should I Choose to Sell My Home?
This is a very personal question but, given that you only have four primary options, it should be pretty easy to pare back to the one you need. If you need money within the month and your house is in decent condition, an auction with a reserve is your best bet. If you need fast cash and you still owe something for the home, or it’s not really in “show worthy” condition, home buying organizations will work best with you.
If you can afford the wait and want a professional to hold your hand through the process, hire an agent or agency. If you need some time to detach yourself from the home emotionally and you have the time to spare, selling it yourself may help to give you peace of mind.