I Need to Sell My House Fast: What Are My Options?30 Jun Rebecca Yazzie
Life moves fast, and sometimes homeowners need their home to sell fast to accommodate it. No matter what the reason, trying to get your home sold in a short amount of time can be a daunting prospect.
NAR reported in May 2021, that most properties were only on the market for an average of 16 days. However, this number does not include the time spent preparing the home for sale or the 30-49 days it takes to close on the contract. Once you factor in everything from prep to close, a typical home will take at least two months to sell.
There are a number of reasons why a quick sale might be advantageous or even vital. Some common reasons include:
* Financial: Sellers may need to sell their home to avoid foreclosure or immediately free up equity for another financial need.
* Life Change: They may suddenly need to relocate, whether for work or personal reasons.
* Dividing Assets: They may be selling a home after a divorce or as an inheritance in order to divide the assets between two or more parties.
* Damage or Losses: Sellers may not be able to afford the repairs needed after damage to the property occurs and will need to sell quickly to someone willing to take the project on. Some common types of catastrophic property damage include water damage, fire damage, and foundation issues.
While a home sale can never be truly instant, you do have options to ensure that your home sells as quickly as possible.
Option 1: List With a Real Estate Agent
According to the National Association of Realtors (NAR), 89% of homeowners work with a real estate agent when selling their home. Listing your home for sale with a real estate agent is by far the most common method of a home sale, and for good reason! It may be a safe bet, but listing your home with a real estate agent can also help you sell faster by utilizing their expertise and experience.
Real estate agents are trained, licensed, and experienced professionals who will take on the full-time job of selling your home. From the first day, your agent will start you on the road to a quick successful sale by advising you on how to properly price and stage your home to attract buyers.
They will handle all aspects of the showing process, including fielding inquiring phone calls and emails and identifying qualified buyers from the “just looking” crowd to ensure your home gets seen quickly by the right buyers.
Once you move into contract negotiation, they also have the expert knowledge to navigate the complicated legal process of a sale transaction and will guide and protect you against any future issues.
Additionally, a real estate agent will utilize their finely honed skills as an expert negotiator to get you the most advantageous sale possible and minimize potential delays. You can also rest easy knowing that Realtors are protected by Errors and Omissions (E&O) insurance, which will provide you with a measure of protection as well if a litigious problem should arise.
Network and Marketing Savvy
A real estate agent also has access to a robust network of other agents in your area and can ensure your home has the maximum exposure possible.
Utilizing their local Multiple Listing Service (MLS), they will be able to give your property an online presence across multiple sites and platforms simultaneously, which is vital to reaching as many potential buyers as possible.
They also have the technical know-how and industry savvy to market your property to its fullest potential. Most agents have a tried and tested marketing plan they follow. Their goal is to sell your home as quickly as possible and for the best possible price.
What Are the Drawbacks of Working With a Real Estate Agent?
The one issue many have with opting to hire a real estate agent is paying the commission. Rather than billing clients according to time spent working, agents typically charge a commission fee of five to six percent, which would be split between the seller’s and buyer’s agents. This fee is not paid upfront, but collected by the title company at the time of closing.
So, as an example, if there is a 6% commission fee on a $250,000 home sale, the agents’ commission of $15,000 will be split between the two agents. There is no out-of-pocket expense, but some sellers do not want to forfeit that amount of their profit.
What Can an Agent Do to Help You Sell the House Fast?
Your real estate agent can expedite the home selling process by navigating you through possible pitfalls that could cause delays. They will do all the necessary research to ensure the listing price is competitive and provide guidance on what minor repairs or staging needs to be done to attract the highest number of potential buyers.
They will also be available to quickly answer questions and inquiries from interested buyers and to show your home to those buyers as soon as possible. If time is of the essence, you do not want to lose out on a potential sale because you were at work and could not show your home to an interested party. Being flexible and making your home available as much as possible for showings will go a long way in helping your home sell faster.
Ultimately, a real estate agent is familiar with the entire home selling process and will be able to quickly move from step to step, guiding you along the way and moving the sale forward. They will know exactly what needs to be done now and what will need to be done in the future and will be able to execute the process with minimal delays.
Make Sure the Agent You Work with Has Experience Selling Homes Fast
When you need to sell your home quickly, choosing an expert real estate agent is crucial to success. Don’t be afraid to ask questions or ask for sales statistics to confirm that the person you selected has the skills to get your home sold fast. Go into your search for an agent with specific criteria in mind to speed up the process.
Are they a REALTOR®?
All REALTORS® are real estate agents, but not all agents are REALTORS®. A REALTOR® is a licensed real estate agent who is also a member of the National Association of Realtors and is bound by their strict code of ethics.
REALTORS® also belong to boards on the state and local level, affording them greater access to market data and the multiple listing service (MLS).
Do they have experience selling homes quickly?
Any REALTOR you interview should be able to speak to how many days their listings spend on the market. The days on market statistics will indicate how quickly their listings go from being a new listing to being under contract. A REALTOR® who is experienced in selling homes fast will have these numbers ready at hand and will be able to explain them.
Do they know the area?
In order to sell your home fast, your REALTOR® will need to be well acquainted with the real estate market in your neighborhood and should be able to speak about it easily. Ask them questions about recent home sales in your area and how you can compete with other homes currently on the market.
Do they have a plan?
A seasoned REALTOR® will also have a comprehensive plan on how to sell your home fast. It should include marketing and technology components, as well as the technical steps required. They should be able to walk you through all steps of the plan and explain why each step is important.
Do they communicate?
The REALTOR® you choose should have easily developed a rapport with you and should be able to communicate with you comfortably. You should never be made to feel like you are bothering them with questions or concerns.
They should also be prompt in their response to your inquiries, whether by phone, text, or email. Communication is key to a successful and fast sale, so make sure you can easily communicate with your REALTOR®.
Option 2: Cash Offers
A full cash offer could speed up the sales process simply by eliminating the time delays associated with securing financing. You can choose to sell to a large-scale investor, who will buy your house almost immediately or list your home as a “cash only sale” and market to small investors.
Cash sales eliminate the need for extra time to accommodate mortgage applications, appraisals, and approvals. A typical cash sale can be completed in about two weeks, once the offer has been accepted. Ellie Mae reported that it took an average of 49 days for mortgage loans to close in April 2021.
Selling your home for cash also means you don’t have to spend time before you list your home staging it or doing minor repairs as most cash buyers are content to buy a property “as is”. You can also forgo other time-consuming events, like open houses and repeated showings.
Who Buys a House for Cash?
To successfully negotiate a cash sale, you need to understand the buyer you are working with. There are four common types of cash buyers, each with its own motivations and methods.
* Investors: Intend to turn the property into a long-term investment as a rental property.
* Property Flippers: Will be looking for a deal so they can renovate and sell the property for a profit later.
* iBuyers: Buy a property at fair market value using online valuation tools, accept a fee for facilitating the sale, and then resell the house for a profit.
* Buyers with Cash: Are wealthy or have already sold a previous home and therefore have the cash to simply pay in full without financing.
What Are the Drawbacks?
A cash sale looks good at the outset, but they carry their own set of risks and potential problems. The most important thing to bear in mind is that most cash buyers are looking for a good deal, one that will get the maximum profit or return on investment.
They will also automatically deduct any renovations or repairs that are needed from their offer price.
This could amount to more than 25% less than your asking price. You are not going to get top dollar for your home by only accepting cash offers.
Another problem to be aware of is that cash buyers will have far less competition, and so will not be inclined to aggressively bid. Finding additional cash buyers, should you not like the initial offer, could prove time-consuming and difficult and result in more bids of a similar amount since most cash buyers have the same “rules of thumb” when buying homes.
Finally, although the buyer does indeed have the cash and is not dependent on financing, that does not guarantee that a sale will be forthcoming. An investment company could get you locked into a contract and then waste your time while they look for a buyer who will pay more. It’s important to do a little research on your buyer before you sign any contracts.
Checking Google reviews or the Better Business Bureau is a great way to get an idea of how satisfied previous sellers have been with their transactions.
If you need to equity fast, don’t want to hassle with repairs, or have a home that might be tricky to sell, a cash sale might be a good fit for you. But, if you need top dollar, you should probably stick to a conventional sale.
Option 3: For Sale By Owner (FSBO)
A FSBO, or for sale by owner, is a home sale where the homeowner handles the sale entirely on their own. This includes marketing and showing the home to potential buyers, negotiating the contract, handling all paperwork, and working with a title company to transfer the title.
What Does a FSBO offer?
There are some advantages to selling your home yourself. The reason most owners choose to go it on their own is that they will not have to pay a listing agent’s commission.
Although agents are paid out of the sale of the home, and not out of pocket, some homeowners do not want to factor the 5-6% commission cost into their home sale. By opting out of having an agent, they can offer a lower asking price to entice more buyers.
The second advantage is the perception that FSBOs will sell faster than those listed by the agent. According to the National Association of Realtors (NAR), 77% of homes sold by owners sold in less than 2 weeks. But, they cautioned that the number is not representative of how long a traditional sale may take.
Many homes sold in this manner are simply being sold by the seller to someone they know, so the home doesn’t even have to go on the market, and this skews the final percentage.
What Are The Drawbacks?
The potential advantages of this method of selling may make it an attractive choice, but seller beware. There are also a number of disadvantages to selling your home yourself, potentially making it a nonviable option in your case.
First, selling your home yourself will be a large time commitment as all of the work will fall to you. You will have to do research to determine your asking price, field all inquiring phone calls and emails, arrange showings (and possibly show the home yourself if your buyers don’t have an agent), create all marketing materials, complete all legal paperwork, and find a title company or attorney to complete the closing.
If you do not have serious free time to commit to this project, it could impede your ability to sell and make the sale take exponentially longer.
Second, by selling your home yourself, you assume all legal risks and responsibilities. There will be no umbrella of protection against ramifications should you run into a legal issue during or after the sale, and you might find yourself in court. An innocent mistake on a contract or disclosure notice could end up costing you thousands of dollars and a great deal of stress.
Finally, homes sold FSBO tend to sell for significantly less than the selling price of homes sold with a REALTOR®. NAR reported in their 2020 Profile of Home Buyers and Sellers that the median sale price for a FSBO was just $217,900, as compared to the median sale price of agent-assisted home sales at $242,300. That means that by selling your home yourself, you could be missing out on more than $24,000.
It is important to weigh the potential savings of listing your home yourself against the amount of your free time it will take, the potentially lower sale price, and your comfort level with the numerous legal documents to decide whether FSBO is the route you want to take.
Option 4: An Auction Sale
The word “auction” conjures images of a room full of interested buyers feverishly bidding on the desired item, causing the sale price to rise and rise, resulting in an instant sale and a very happy seller. The reality of a real estate auction could, in all honesty, work that way, but it could also have a very different and undesirable outcome.
Current real estate auctions are a far cry from the quick sale of distressed and bank-owned properties that they used to be. While those types of auctions do still happen, there is a rising popularity in selling average or high-end properties at auction for their less-hassle approach to the home selling process.
What Does an Auction Offer?
There are many potential benefits to selling your home at auction. First and foremost, you will know the sale date of your home. There is no drawn-out listing process and contract negotiations. It will go up for auction, and that will be that. Keep in mind that the time frame from listing the home to the actual closing will still take 45-60 days, though.
Bidders at a real estate auction are also required to be pre-qualified for the asking price, guaranteeing that the sale will go through once the final bid is accepted.
Another benefit is the potential for a bidding war, which will increase the sale price. This is especially probably in a hot seller’s market, like the current real estate market conditions in Texas, where there are more buyers searching than there are properties to buy. In that case, a well-marketed auction could result in top dollar bids and a lucrative return for the seller.
Sellers also choose auctions due to their no muss, no fuss process. There will be no need to vacate the home for showings and open houses, no need to constantly keep the house clean in case someone wants to see it at the last minute, and no strangers wandering through your home. There will also be no for sale sign in the yard and the advertising will be minimal. For sellers who are looking to preserve their privacy, this makes auctions especially attractive.
What Are the Drawbacks?
While selling your home at auction will be faster and potentially lucrative, there are possible issues that should be considered before choosing this method of sale. First, if your home does not generate enough interest to attract bidders, you could end up selling your home for less than it’s worth, should you choose to opt for an absolute auction.
If you have set a reserve price and your bids do not reach that, you could end up owing a “no sale” charge to compensate the auction house and still owning the house. Not only does this put you out of potentially thousands of dollars, but it will also damage your property’s perceived value in the eyes of future buyers.
A second potential problem is that the final costs, once you factor in all fees to the auction house, any real estate commissions to be paid, and other added costs, often end up higher than those in a traditional real estate sale.
Auction houses will often charge a “buyer premium” of 10%, which is tacked on to the sale price of a property. Sometimes this cost is paid exclusively by the buyer and sometimes it is expected to be split between buyer and seller.
Auctioneers can also charge the seller a commission of between six and ten percent of the sale price. It’s important to understand any and all fees charged by your chosen auction house or auctioneer before you finalize the agreement.
Finally, not all properties, or all sellers for that matter, are the best fit for an auction. If you are dead set on a specific price point, still owe a great deal on your home, or are in a market not conducive to successful auction sales, this may not be the right option for your situation.
NAR recommends following their “Two Thirds Rule” to determine if your property is a good candidate for auction, which says that out of the market conditions, seller, and property, two of the three categories should be favorable towards auction success. Follow their checklist to determine if this is a good fit for you.
What Is a Short Sale?
Although it sounds like a speedy option, “short sale” is actually a term used when the property owner sells their property to avoid foreclosure and will sell it for less than they owe on their mortgage. The mortgage holder must approve the short sale and all proceeds from the sale of the home will go directly to them.
The name itself is also a bit of a misnomer. It refers to the fact that the sale will be less than, or “short,” what is owed. These transactions can drag on for up to a year, due to the specific regulations and large amounts of paperwork required to complete them. Unless you are trying to avoid foreclosure, short sales are not an option for most sellers.
Considering Your Options
The truth is, in today's frenetic real estate market, selling your home fast is practically a given. However, there are ways to ensure your home sale is as fast as possible.
By opting to enlist a real estate agent to sell your home, you can relax, secure in the knowledge that your sale is being handled by a trained and licensed professional, who will work to protect you and your interests. Talk to your agent about your goals, your needs, and your restrictions for the sale, and they will help guide you to an informed choice on how best to proceed.
If you are considering options that exclude the help of a real estate agent, make sure you weigh all of your options carefully and do your research before making any final decisions.
No matter which method of home sale you are considering, our experienced and knowledgeable REALTORs® can walk you through your options and offer guidance on what would work best for your situation. Contact us at HomeCity and let us help you get started today.