Can New York homeowners and investors sell their homes without using a real estate agent? More importantly, if they can, should they? Property owners and investors make these decisions every day. While there are certainly advantages to neglecting the assistance of a real estate agent, those trying to save money will find that it could end up costing them a lot more than they anticipated.
While selling a house without a realtor can be a valuable option for some, a DIY approach can result in costly mistakes and a lot of time wasted for others. In this article, 180 Homes will explore the pros and cons of selling a house without a realtor so that homeowners can choose how they’d prefer to navigate the real estate market.
How to Sell a House Without a Realtor
Many seriously underestimate the cost of a reliable real estate agent. The price of an agent includes marketing, showings, negotiating, paperwork, and managing the closing process. These items cost money and take up a lot of time. Sometimes real estate agents have entire teams that work underneath them to perform these tasks. Those who may own multiple properties or make a living in property investment typically prefer a realtor to expedite the real estate process as they handle other components of property management. Taking on these obligations can be pretty overwhelming for those interested in selling a house without a realtor, but isn’t impossible.
When homeowners wish to sell a house without a realtor, they list their home as a “For Sale By Owner” listing. The seller will then prepare their home to be market-ready for touring potential buyers. Independent sellers are responsible for promoting their listing, scheduling open houses, identifying and qualifying potential buyers, and handling the real estate transaction. Perhaps you are fully capable of selling a home yourself. Those with extensive real estate education should have a solid foundation to start, but that doesn’t mean it’s best or saves money at the end of the day.
Pros and Cons of Selling a House Without a Realtor
Advantages of Selling a House Without a Realtor
While selling a house without a realtor has its fair share of challenges, the task is not impossible. If the homeowner can take the time and expend the resources needed to get the property sold legally, then it’s an option worth exploring. Let’s review some of the most obvious benefits of selling a house without a realtor.
When selling a house without a realtor, sellers can guarantee that the final price for the property is the value they want. Realtors will always suggest a price they feel is fair, which might be different than what the homeowner feels is adequate. Sellers can negotiate a price on their terms and have direct communication with prospective buyers without a realtor.
Skip Real Estate Commissions
Every real estate investor or seller looks for ways to save money throughout the real estate experience. One of the most common areas to save on a real estate transaction is closing costs. Reducing, or eliminating, some of the fees will have a sizable impact on your bottom line if you choose to sell a house without a realtor.
When selling anything, having a firm knowledge of the product is critical for success. Who knows more about a home than the person living in it? When selling a house without a realtor, homeowners can spruce and improve the space in ways they know would help. Additionally, homeowners are the individuals best equipped for answering any questions buyers might have about the property, neighborhood, and surrounding areas.
Disadvantages of Selling a House Without a Realtor
For every easy sale completed without a real estate agent, nine others are an issue. If you can’t generate interest or don’t know the specific language on a real estate contract, you will create larger and avoidable problems. Issues are preventable by hiring a professional. Here are five reasons you may not want to sell a house without a realtor.
Some properties will almost sell themselves, and a real estate agent doesn’t have to do too much. However, if you can’t generate interest in your property, it is difficult to get desired selling price. One of the biggest roles a good agent performs is getting eyeballs to the home. They leverage the MLS and instantly get the word out to thousands of agents in real-time. Every good agent has a defined marketing strategy that generates interest and creates a buzz with their extensive experience in the field.
You can have the best pictures and descriptions of the property, but it is not enough to get it sold. At the showing, you need to find a balance between being a salesperson and being the owner. If you sell too hard, buyers become hesitant to move forward. A professional agent understands the rhythm of a showing and knows how to provide information appealingly while still helping. A good agent can attract buyers on the fence and get them eager to move forward.
There is a lot that can go wrong in any real estate transaction. The glue that holds everything together is the contract. If you sell your property on your own, you had better be an expert in every line of it to prevent anything going wrong. Experienced real estate agents can pick the contract apart, ask for credits and addendums and finalize it cleanly. You can argue that the largest benefit of using a real estate agent is their knowledge of the contract and real estate law.
As much as you think you know the market, your real estate agent likely knows more. If you find a quality local agent, they understand every recent sale and current listing. They can use the MLS to find information and rationale behind every transaction and use that to price your property. As the owner, you are probably biased and think your property is superior to others on the market. This leads you to price higher than you should, decreasing buyer interest which eventually results in a price drop. You are always better off listening to a professional and price properly, right from the start.
Everything from marketing to showings to negotiation is time-consuming. If you choose the wrong offer you are forced to start the process from the beginning and additional time is wasted. Whatever perceived savings you think you gain by not using an agent your time is almost always better spent on other areas. Since you are not an expert you will be forced to find answers to most questions, wasting even more time. Your time is the precious commodity you have. Spend it in areas that give you the biggest return.
180 Homes Can Help Sell Rental Properties!
While it’s normal to ask, “Should I sell my house without a realtor?” using a real estate agent is an important area for investment. There are other places where you can cut corners and lower your expense sheet. At the end of the day, getting your home some within the desired timeline for the right price is what matters most. 180 Homes has what you need to maximize your real estate experience with our cash as-if offers for your property. Contact 180 Homes today to learn more!
At face value, working with cash buyers should be easy and simple. Cash, As-Is, no appraisals….easy peasy! Unfortunately this is not always the case and working with cash buyers can be difficult. The good news is, knowing what to look out for when working with cash buyers BEFORE opening escrow can prepare you to save you time, frustration, and hair-pulling! Over the years, we’ve seen competing cash buyers include certain terms in their offers that should be seen as red flags and/or warning signs. Whether you’re thinking of selling your own property to a cash buyer or you’re listing a property for a client that is attracting cash buyers, keeping a keen eye out for the Red Flags below could help avoid choosing the wrong buyer!
Knowing why investors include these terms in their offers and how to counter them will put you in a much stronger position in the transaction and simplify the process of selling your home for cash.
1. The “Non-Contingent” Offer
What exactly is a non-contingent offer? When a buyer submits a “Non-Contingent” offer, they are essentially forfeiting any and all of their privileges to perform due diligence on a property they’re interested in. I.e. they’re giving up the right to….
We see it in competing offers all the time. Companies that buy houses for cash say they’re non-contingent and that they “don’t need an inspection period”. Often times their goal here is to make their offer appear as strong as possible and get their offer accepted. Unless you’ve seen the tactic before and know how to prevent it, buyers may take advantage of their Earnest Money period to complete their due diligence. They know that once their offer is accepted, they likely have the industry standard 72 hours to submit their Earnest Money Deposit and can use this 72 hours to do their initial walkthrough of the property, perform inspections, etc. If they find something they don’t like or realize the numbers don’t make sense after physically walking through the property they can cancel their offer or try and re-negotiate by asking for a price reduction. All this happens before any of their money has been submitted to escrow!
Pro tip: Write up a Seller counter! Shorten the earnest money period to 24 hours or sooner and make it clear that no further inspections will be allowed until escrow receives buyer’s nonrefundable Earnest Money!
2. Long (Unnecessary) Inspection Periods
While a typical financed buyer typically gets about 17 days to perform their due diligence on a property, cash buyers should be writing in a much shorter time period into their contracts. How much time does a cash buyer need to perform inspections? It’s a loaded question, and depends on a couple things….
PRO TIP: Write up a Seller counter! You can always counter inspection days to whatever timeline you feel fair!
3. Low Earnest Money Deposit
Any savvy seller should want their buyer to have “Skin in the game” i.e. something to lose if the buyer does not perform to the contract. This typically comes in Earnest Money Deposit which is usually expected to be submitted to Escrow within 72 hours of offer acceptance. Should the buyer cancel their offer or not perform per the contract after removing their contingencies, escrow may be obligated to disburse those funds to the seller. The LOWER the earnest money amount, the LESS SKIN a buyer has in the game, and the LESS incentive a buyer has to perform to the contract! It’s important that the amount of the earnest money is significant enough to motivate the buyer to perform.
Things to Keep in Mind
4. Unusually High Offers
If you’re selling a fixer property for cash in Long Island, it’s likely that it will get a lot of attention from local investors if exposed to the local market. If the property you’re selling has multiple offers on the table, be wary of investors that are significantly higher than the average offer price of others you have in hand. Some investors knowingly come in higher than what they can actually pay for the property to tie the property up and use the contingency period to negotiate the price back down to a number they can buy it. Keep in mind that most fix and flip investors have similar way and method for running numbers and determining their offer price. If one fix and flip buyer is significantly higher than the others, something may be amiss! Dig deeper!
Pro tip: Use logic, ask questions, and see HOW an investor plans on using the property once completed. If a buyer is doing so to renovate and re-sell themselves for a profit, how do they plan on making money by paying significantly more than other competitors?
5. Out of Area Buyer
If you catch wind that a certain buyer submitting on your listing/property is from out of your area, proceed with caution! While by no means are all out of area investors “bad” it’s likely a safe bet that these buyers don’t know the local neighborhoods of Long Island (or your area) as well as a local buyer would. Investor-buyers that are not from Long Island likely aren’t as familiar with the market as a local buyer who has an established track record of flipping homes in the area. These types of buyers usually need to do MORE market due diligence during their contingency period to confirm their numbers and that they’re comfortable with the purchase. More due diligence means more uncertainty for you, and puts the transaction at a higher risk of changing their numbers mid-escrow and asking potentially leading to a price re-negotiation.
We hope that by knowing these tips in what to look out for when working with cash buyers, you’ll be better equipped and more prepared to facilitate an EASY escrow for top dollar!
When buying or selling a home, the topic of who pays closing costs is bound to come up eventually. Any real estate transaction will host numerous costs and fees that will be factored into the purchasing process on top of the property’s value. Understanding who is responsible for paying these fees is crucial for properly valuing the sale as the buyer or seller. Especially for those looking to budget their real estate experience carefully, closing costs can be an important factor when determining if a home is the best investment for your needs.
In this article, we’ll explore real estate closing costs to help homeowners and potential buyers better understand the process of finalizing a real estate transaction. We’ll also settle once and for all who usually pays closing costs: the buyer or the seller?
What are Closing Costs?
Closing costs are fees and expenses outside of a down payment that is paid once the buyer closes on a property. Closing costs can be a substantial portion of the real estate investment and can be as high as 3 to 5 percent of the down payment. These fees are calculated from numerous sources, from attorney fees to insurance costs. Each transaction’s closing costs will vary based on the property itself as well as the nature of how the transaction was arranged. The buyer and seller need to be aware of closing costs so that the point of escrow can run efficiently and according to the original listing agreement.
Does the Buyer or Seller Pay Closing Costs?
Now that we understand closing costs and their role in a real estate transaction, it’s time to dive into the logistics of buyer and seller responsibility. Buying a home is a huge investment and when selling a home it’s important to optimize profits during the transaction to get the most value out of the home. Closing costs allow the transition of ownership to go smoothly and guarantee that all parties involved, from the real estate listing service to the insurance companies, are properly compensated for the transaction. Generally speaking, the buyer is the party responsible for paying closing costs. However, the closing costs can look different for each transaction and the seller may be liable for other costs unrelated to the transaction itself.
Seller Closing Costs
So do sellers usually pay closing costs? Typically not. While the buyer of a property will generally have more items that require payment than the seller, this doesn’t indicate a complete lack of responsibility on the seller’s part. Especially for sellers who choose to leverage the payment of closing costs to quicken or simplify a sale, it can’t be assumed that the seller is getting off free within a successful transaction. The majority of individuals who sell their homes will do so with the assistance of a real estate agency, and the seller is responsible for paying the sales commissions to any real estate agents that helped the deal take place. This can be a significant portion of the sales price, so those selling their property need to factor this in when listing their home. Some other potential seller closing costs that may come up include:
Buyer Closing Costs
As we briefly stated, those looking to purchase a new home or property should anticipate financial liability for the majority of the costs associated with closing the deal. This is mainly due to the many steps that are taken to secure a loan for a home’s down payment, as well as the process of properly valuing a property. It’s important to note that these closing costs are not usually paid to one party but rather a collection of individuals that played a significant role in the purchase of the home and transfer of ownership. Some closing costs that buyers can anticipate during a real estate transaction include, but are not limited to:
Who Can Pay Closing Costs?
While the majority of financial items that fall under the umbrella of “closing costs” tend to lean to the buyer’s side, each real estate transaction is different and closing costs can be easily adjusted. Many sellers will assume responsibility for a portion of the closing costs as an incentive for interest or to expedite the sale of their property. Negotiation of closing costs is fairly common but should always be calculated towards the beginning of the real estate transaction to ensure no one gets blindsided down the line.
Closing costs can be leveraged by both sides of the transaction to make the process of paying them a bit less overwhelming for the buyer. Some buyers will even make their initial offers with buyer closing costs factored within a purchase price which could lead to the seller negotiating an alternate deal. Closing costs can be an incredibly expensive stage of the real estate transaction, and buyers might be surprised by how many sellers are willing to negotiate these figures for the sake of a simple and streamlined real estate experience.
Sell Your Home Fast with Help from 180 Homes!
Whether you’re a first-time homebuyer or you’re simply looking to maximize an investment’s value, understanding who usually pays closing costs is a major part of conducting any successful real estate transaction. By properly anticipating what costs will be incurred and delegating these as negotiated, the process of buying and selling a home can become much simpler. 180 Homes can help sellers list their property and have a care-free real estate experience. With cash offers that help sellers move on to the next great investment quickly, 180 Homes can expedite the process of selling your home. Contact 180 Homes today to learn more.
One of the biggest hurdles for investors old and new alike is securing financing. You can have everything else with your business in place but without financing you won’t get very far. How and where you find financing has changed dramatically over the past ten years. It wasn’t that long ago when lender financing was the only realistic source of funding. Today between hard money lenders, private money lenders and silent capital partners there are more financing options than ever before. While finding financing is easier it doesn’t mean it will simply fall on your lap. You still need to dazzle your capital source and make a solid presentation regardless of who you are talking to. Here are five tips to help establish and secure the financial backing you are looking for.
In this article, we’ll explore how the eviction moratorium has affected landlords and rental property owners, how the pandemic has reshaped the current real estate market, and some strategies for selling your home during COVID-19. By being adaptable and understanding regulations related to rental investments, people can navigate the current real estate market more efficiently.
How Has the Pandemic Affected the Real Estate Market?
The coronavirus pandemic undoubtedly had a tremendous impact on the real estate market, and the duration of its consequences is hard to determine. The span of COVID’s effects has influenced the entire span of real estate. Stay-at-home orders have resulted in fewer houses on the market, increasing their demand among those looking to buy homes. Interest rates have lowered, so there has been an increase in individuals looking to purchase homes or rental properties as their purchasing power has effectively increased. Due to widespread economic hardship, many renters have been unable to make their monthly rent, which resulted in the CDC imposing a federal eviction moratorium invoked in March of 2020 under the CARES Act.
All things considered, people still need a place to call their home and real estate is a never-ending industry. Homeowners and rental property owners need to adapt to the current market to sell their homes, manage their tenants, and ensure they make educated choices during this hectic period. Let’s explore what the eviction moratorium means for landlords, tenants, and homeowners protected under the CARES Act.
What is an Eviction Moratorium?
The eviction moratorium was imposed by the CDC to assist those that have suffered from financial trauma due to COVID-19, whether it might be a loss of employment or medical bills that have resulted in non-payment of rent. The order doesn’t remove the possibility of late fees or penalties charged by the rental property owner or landlord, nor does the eviction moratorium allow tenants to break their lease outside of nonpayment scenarios. As of July of 2021, the eviction moratorium was extended for parts of the country that are still struggling in their case numbers of COVID-19. The eviction moratorium has very specific requirements for eligibility. It’s not as if any tenant who wishes to skip rent can use it to their advantage. Tenants need to apply to government assistance programs and qualify under the CDC’s requirements.
To qualify for protection, tenants need to:
While meeting these requirements may deem a tenant eligible, there are serious ramifications if application info is falsified. After ensuring they have verified eligibility, tenants must fill out and send the CDC’s declaration form to their landlords or rental property owners to indicate they are covered under the moratorium. Once the tenant has followed all required steps and provided this documentation, renters are unable to evict the tenant due to nonpayment of rent.
What the Eviction Moratorium Means for Landlords and Rental Owners
One of the biggest takeaways from understanding how the eviction moratorium affects landlords is that legal advice is valuable. Each state is different in how its eviction process works, and knowing the correct steps to take as a home or property owner renting their space is crucial for success. Often times, reverting to a local expert could be the best decision if things point towards an eviction. Real estate lawyers are a great resource for understanding what to do if tenants are not paying their rent. Here are some of the biggest points for landlords and rental owners to consider during these unprecedented times.
Evictions Are Still Possible
The eviction moratorium was put in place to assist individuals who have suffered a substantial financial loss that has resulted in failure to pay rent. That being said, tenants are not only evicted due to non-payment of rent. If the tenant needs to be evicted for reasons non stated in the moratorium, such as smoking in a non-smoking building or otherwise violating their lease, an eviction can still be pursued. It’s just important for landlords and property owners to verify all necessary information before moving forward with an eviction toward a potentially covered individual. Additionally, it’s also possible to sue people for rent rather than eviction, which effectively sidesteps the eviction moratorium. Most tenants will want to avoid legal complications and small claims court.
Explore Month-to-Month LeasesSomething that’s become increasingly common during the pandemic has been month-to-month leases. Typically, renters are accustomed to year-long leases but having a month-to-month option can be an appealing selling point for renters as well as an advantage for landlords and property renters. Month-to-month leases allow tenants to have a bit more flexibility in their living situation which can be helpful during a time of economic uncertainty. On the flip side, renters and landlords can replace current tenants easier by not renewing to tenants who have not paid their rent. Non-renewal is not an eviction but still allows landlords to save some of their sunken profits in situations of month-to-month renters not paying rent.
Communication is KeyAs any landlord or rental property owner is well aware, healthy communication is the only way to have an accurate snapshot of your tenants’ needs. Communication is especially important for both renters and tenants during this time. Covered tenants are required to accurately follow the steps of the moratorium and communicate with their landlords of complications paying rent, and landlords should be responsive and document all correspondence. The eviction moratorium is put in place as a temporary halt on evictions, but tenants are still expected to pay their rent in the future. Keeping track of all tenant communication is highly suggested, not only to be able to guide them through the moratorium requirements but also to provide evidence if needed down the line.
Renters Have Assistance, TooFor homeowners choosing to rent out their space, it’s important to understand that housing qualified individuals under the eviction moratorium may result in financial losses and the inability to pay their own mortgages down the line. Similar to the eviction moratorium, the foreclosure moratorium was put in place to help homeowners place a pause on federally-backed mortgages. Despite this ending in August of 2021, if a home or rental property owner applied for forbearance under the Cares Act and is still struggling financially due to pandemic-related hardship, they may be eligible for an extension.
It Might Be Time to SellAs with any major investment, rental properties are all about generating positive cash flow. When it comes to how the eviction moratorium affects landlords, it’s certainly adapted the way they have to view their rental property investments. Especially for those renting out a home, selling your house during COVID-19 could prove to be an intelligent decision due to the current demand within the housing market. If a rental property is not generating revenue from its tenants, sunken profits can be highly anticipated. The eviction moratorium has provided landlords challenges, but the pandemic as a whole has provided insight into the success of a rental property and how much revenue the property is truly bringing in. If landlords are only projected to lose profit, it might be the best time to sell.
Leave your tenant worries behind. Get a Cash Offer for your property today!
Strategies for Selling a Home or Rental Property During COVID-19
Even with the backdrop of a pandemic extremely present, the real estate world does not stop. In terms of how the eviction moratorium affects landlords and rental property owners, it’s provided an opportunity to move forward, and in many cases sell. Many rental property owners and home sellers are simply waiting for the right time to list their homes and find a buyer. As difficult as it may appear for rental property owners to consider marketing their investment within a pandemic, you can still sell your home in today’s market.
From a buyer’s perspective, now could be seen as a great time to buy. Interest rates have once again dropped to all-time lows and many lenders have loosened some of their most restrictive guidelines. With states and individual companies embracing remote work schedules, buyers have more time than ever to investigate and research their dream home. While COVID-19 is changing the way you may go about it, selling your home or rental property is still very possible. If you’re wondering how to sell your house during COVID-19, here are a few strategies for selling your home during COVID-19 as we continue to fight against the coronavirus and its variants.
Leveraging Technology to Sell Faster
Over the past year, many real estate agents have shifted how they preview and show their listings. To maximize their time, they have started producing property virtual materials for websites or public viewings. Homeowners or rental property owners can easily take videos of their property for agents to share with prospective buyers who can view these materials and quickly decide if they’d like to move forward. The benefits of these virtual materials will outlive the pandemic as an appealing option for non-local buyers to view properties that they might have struggled to view or gain interest in originally. Virtual staging, 3-D tours, and video tools such as FaceTime and Zoom have completely transformed the way buyers can get the first impression of a property, and utilizing these technologies to perform real estate tasks is a smart decision.
Utilize Modern Marketing
In a traditional real estate transaction, initial interest is usually derived from an alert through a multiple listing service (MLS), a database utilized by real estate brokers for information regarding properties for sale. In modern markets, sellers and real estate agents have become more creative. The most common starting point nowadays is social media and online marketing. With an uptick in remote work, there has been a subsequent increase in online traffic. Sellers can use this to their advantage for organic interest in the listing through virtual tours, video tours, sponsored posts, linked websites, etc. This allows buyers to access facts and data regarding a property more often, with many of these online resources also providing alerts to agents, investors, and brokers to see new listings. By adapting to modern marketing techniques, exposure shouldn’t be an issue when selling a home during the coronavirus pandemic.
Showing Your Property (Carefully)
As much as a virtual property tour or dedicated online marketing campaigns can provide valuable property information to potential buyers, nothing can replace the confirmation a buyer receives from physically walking through the property. Especially with the increase of vaccinations, if there is true interest in the property it’s likely that the buyer will want to see it in person. It’s important to note that not all prospective buyers or sellers are vaccinated, so it’s important to still follow county and individual state regulations regarding COVID-19. The bottom line is that if a buyer needs to put eyes on the property, they are still allowed to, so sellers should be aware of local guidelines when selling their home during COVID-19.
Contact 180 Homes for Help Selling Your House or Rental Property During COVID-19
The coronavirus pandemic has caused changes in local real estate practices and procedures that will become the new normal in a few years. While it has altered the way homeowners and landlords have conducted their business, COVID-19 doesn’t have to be a major roadblock in your real estate experience. At 180 Homes, we’re passionate about helping homeowners sell their homes with cash offers that can speed up the entire transaction. Additionally, 180 Homes has valuable insight into selling rental properties for landlords and rental property owners looking to make a change.
The first step of any real estate deal is securing financing. Any grand real estate plans you have are based on your available capital. It will directly impact the market you choose, the purchase price, repair budget and everything about your transaction. One of the most common complaints in the investing business is the inability to find financing. What savvy investors know is that with a little digging there are multiple options available in almost every market. Depending your investing style and goals some of these work better than others. Never let a lack of capital stop you from pursuing a deal. Here are five popular sources of capital for your next deal.