Seller’s options have changed over the last decade. Alternatives that were once known only to a few are becoming mainstream. Many sellers are aware that Realtors® are no longer the only route to a fiscally favorable home sale.
Years ago, when it was time to list a property for sale, the seller would typically hire a real estate agent. Oftentimes the agent was a family member or neighbor. If the seller didn’t know a realtor® personally, he or she might just grab the phone book, open it and use the close-your-eyes-and-point method. Scary!
Working with a Realtor®
Real estate agents give an opinion of the home’s value using market data. They discuss the seller’s plans and ultimate goal for selling the home. If they agree to work together, the seller signs a listing agreement giving the Realtor® exclusive representation in the effort to sell the home. These contracts usually extend over a period of 6-9 months. The fee for this is typically 5-6% commission.
After the paperwork is complete, the property is then traditionally marketed to potential buyers. The Realtor’s® responsibility includes listing the property in MLS, holding open houses, conducting showings and online and paper advertising.
When the Realtor® locates a retail buyer, a purchase agreement is signed. Typically the purchase agreement has several conditions that are viewed as standard for most home purchases.
Before the sale goes through, the buyer must be able to obtain a loan and receive approval. This process can take a minimum of 45-60 days for a typical loan. Depending on the condition of the property and the intricacies of the loan, often times the financing portion of the contract is extended beyond the 45-60 days due to delays.
If the conditions of the purchase and sales agreement are met, the buyer and seller close on the transaction.
As a real estate investor, education and training are invaluable. Be willing to first invest in yourself and it will pay off in your business.
What Could Go Wrong?
Sounds simple, doesn’t it? Well, not always. Minor issues can surface during the purchase and sales process. The concerns can unnecessarily blow up the deal and leave the seller in a worse position than prior to listing their home.
About 99% of buyers ask for a home inspection. Most of the time this goes off without a hitch, but if a matter of concern is discovered during the inspection, it can impact the deal. Sometimes the buyer feels they have some degree of leverage over the seller and will attempt to renegotiate the price with the seller as a method of getting the property cheaper.
Selling to a Real Estate Investor
Some sellers prefer to stick with what’s familiar and choose to deal only with Realtors®. Others want to avoid the hassle and expense of listing their properties for sale with an agent. Also, the idea of taking out a costly loan on the property’s equity doesn’t make a lot of financial sense.
There is another option that has become increasingly popular as a compromise of sorts to property owners in a majority of circumstances. It’s especially attractive to those looking to sell and close on their properties quickly. This is where YOU, the real estate investor, come in.
The idea of selling their property to an independent real estate investor might feel a little shaky at first. Once you help the seller fully understand HOW the process of selling to a reputable investor works, they see that it can be the solution to a number of problems.
Most people have never considered selling their property to an investor and they have a lot of questions. Some may assume you’re out to steal their home or trick them. It’s important to help them understand that real estate investing is a business and like all businesses, its goal is to earn a profit. That doesn’t mean this happens at their expense.
Unless you’re dealing with someone who understands the real estate investment business, here are misconceptions that must be overcome in order to build a trusting relationship. Be clear and upfront. As long as you are professional and informative you’ll help to allay concerns.
You’re in business to solve problems and like anyone in business, you earn money for the services you provide. As a real estate investor, education and training are invaluable. Be willing to first invest in yourself and it will pay off in your business.