Maybe it’s the perfect time to sell that old house that keeps nickel and diming you to death. You’ve watched the housing market closely for the past few months and house prices have risen faster than you’ve realized. All over Sacramento, in every neighborhood, home prices have risen 40% -50% over the past several years. Those price increases have been indiscriminate as every house, regardless of their condition has seen a tremendous bump in price. That in and of itself is a great motivation to sell.
When that happens, even the houses that need a lot of work become more valuable and their owners that struggled with selling in previous years are taking notice and making the decision to sell their houses as is.
Selling houses that need a lot of work is not as complicated as it might sound. But then again if you are listening to the real estate industry as a whole, selling any house that needs work is a PROBLEM… for them. Real estate agents know that no matter what the problems, houses just sell faster if you fix everything in advance. It makes sense, right? After all once you start to add all of the other pieces to the puzzle, it makes a lot of sense from their perspective. Buyers want move in ready. It’s true. So why is every real estate agent in the world trying to get your house to conform to the world that they live in rather than directing you to the market that your house will compete in?
Real Estate Agents Don’t Understand Ugly Houses
The answer should be self evident… real estate agents earn a commission on the sale of the houses that they list. No one likes to admit that they may be irrelevant in the sale of a house, but I can assure you that hiring a real estate agent for old and distressed houses that have years of deferred maintenance is a waste of your precious money and ultimately your hard earned equity. Just like all houses are not created equally, either are real estate agents and if you have both you may need to step back and re-evaluate your expectations when it comes to selling your house and the amount of equity you end up with at closing.
Remember that I said that every house in this sellers market has received a base price increase because of the condition of the overall housing market. Prices are rising everywhere. So if your house that needs a lot of work has increased in value why is it that you need to spend a lot of money to sell it to compete with everything else on the market. Why can’t you sell your house to compete with every other house that needs work on the market. Isn’t that the real decision that you need to make. Do I sell the house As Is or do I fix everything, update everything and then go for top of market?
The decision to sell is just one part of the process, the how is the piece that usually stumps most people because of the time and the cost. It should give you pause because the cost to fix houses is no longer a bargain. It’s not exactly a news flash, but in California, every cost has risen along side the cost to purchase a house. Material cost, labor cost, permit fees, impact fees, water and sewer reconnect fees, inspections, hiring the contractor, managing the contractor and finding the cash to complete the project have all gotten very expensive. So what is the return on investment?
Should you hire an agent to sell your house in Sacramento? Do you want to pay a commission on a house you can sell as is and add an unnecessary layer of cost? How long are you willing to wait for the house to receive an offer? How long will it take to close? What sort of repairs will you have to make? How does the house look when I leave for work in the morning? Are you available to show your house with 24-hour notice, or less?
The Pros and Cons of Hiring An Agent To Sell Your House in Sacramento
Commissions and Fees
Real estate agents are paid based on a percentage of the sale price of your house. If you do not use an agent, there will be no commissions paid to a buyer’s or seller’s agent. That means thousands of dollars in savings! The usual commission is 3% per side, so if you sell your house for $400,000, you would have to pay $24,000 in commissions alone, along with the traditional seller’s closing fees and other possible transaction fees to the closing agent and the real estate agents office. Real estate investors typically do not charge commission or transaction fees, and if they do, it is extremely low in comparison.
Waiting and the Time Frame
Real estate agents have access to the multiple listing service, or MLS, which allows your property to be found in searches for certain features of a property. This may sound great, but how long will it sit on the market? How fast will you receive offers? Real estate investors and other direct house buyers typically have a network of other house buyers, so if your property doesn’t fit their portfolio, then it may fit one of their colleagues’ portfolios. Either way, this means very limited waiting time for an offer. Also, when you sell your house in Sacramento, CA to house buyers, they will typically close faster than traditional house buyers, and usually in pay full in cash. Traditional house purchases usually require qualifications from banks, mortgage underwriting time, property inspection and the buyer may not end up qualifying in the end.
Inspections & Repairs
Professional house buyers in Sacramento will usually purchase houses as-is. As a seller, this means you do not have to worry about repairs before closing or any other additional expenses you were not planning on. There are some companies that do not require inspections which makes it a truly as-is transaction. When you use a real estate agent, the buyer’s agent will almost always order an inspection of the property. If they find something wrong with the property structure, they may require you to fix it out of pocket before the property closes.
Showings
If you decide to use a professional house buyer in Sacramento, you will not have to worry about going through a roller coaster of emotions. There are no frustrating, middle-of-dinner phone calls asking if you are available to show your house. You don’t have to worry about leaving your house spotless every day before heading to work, just in case there is a showing while you’re gone. You don’t have to worry about possibly running into a buyer’s agent or their clients or dealing with them asking you questions that you really shouldn’t answer anyway. You also don’t have to worry about buyers arguing with you over which furniture you are taking and what you are leaving.
There are a lot of situations to think about when you are ready to sell your house. We can help you decide which avenue would be best for you.