Ready to sell your home, but overwhelmed by all the options? When deciding how to sell your home, consider the time, effort, and money involved in each option. Here is a quick breakdown of the 5 most common choices. 

Traditional sale with a realtor:

With a traditional sale you hire a local real estate agent with the most experience that you feel will get the job done. We highly recommend interviewing more than one. In a traditional sale experience your realtor will/should send a professional stager to your home, schedule professional photos and/or video, put the home on MLS (and other real estate sites), and market the home before and while active status on the MLS. Good agents have extensive market exposure and networks that they will use to market your home. This can include mailers, social media, email blasts, and a substantial contact list of other realtors who they can contact for potential clients. In addition, they should hold open houses to further market/advertise your home to the general public, handle all the associated paperwork with its complicated legalese, negotiate your contract for the most favorable terms, negotiate repairs, and get you to the closing table as quickly and efficiently as possible. 

In this scenario, you would pay 6% in realtor fees. 3% of this goes to the buyer’s agent: the agent that brings you the buyer who purchases your home. This 3% is the industry standard, and offering any less than 3% is ill-advised as many agents in the market may opt to not show your home to their clients thus limiting your opportunity to sell quickly and at or above fair market value. The other 3% goes to your listing agent. This 3% covers the following: 1% to marketing your home including open houses, staging, photos, video, etc, 1% goes to the agent’s broker/office fees and taxes, and 1% (sometimes less) is how your agent makes their living and supports their families. Even with the 6% realtor fees, homes sold with a realtor net about 6% more than ones sold without.

 

Cash offer:

There are many programs in the marketplace that advertise cash offers. This can be an excellent option if you are in a special situation in which you need to get out from under the home quickly. In this scenario, your fees are typically 3%. In this case, the home is sent to a large pool of investors who then evaluate and offer you a cash settlement with a quick close covering all your closing costs in most transactions. Since the investors must make a profit these offers are significantly lower at 25-50% of fair market value in most cases. Depending on the realtor, if you are interviewing agents in a traditional scenario, ask if they can also provide a cash offer for your home. Our team at Hoss Group, for example, can do this for our clients. The home is submitted to the investors and if it meets any of their criteria we receive cash offers within 5 business days.  

 

Open Door:

Opendoor is a startup that began in Arizona sometime in 2015 where three young men from the San Francisco area secured a large amount money from investors. The Opendoor sales pitch is “Sell your home to Opendoor so you can skip the hassle of listing, showings, and months of uncertainty.” This gives sellers the option to cut and run if they need to or want to and the purchase prices don’t seem to be the crazy lowball numbers we are used to seeing from investors (20-25%+ below market value), but they are still 5-10% below market value not including the steep fees. Sellers pay, according to Opendoor, 10 to 12% in fees. Also, sellers pay for all repairs that are found during inspections, (repairs, if not warranted, are negotiable in traditional sales; plus sellers must pay whatever Opendoor charges for needed repair). According to Opendoor’s inspection brochure, the company offers two other options: sellers can tackle the fix themselves or “say goodbye.”

In addition to the fees, sellers split their closing costs with Opendoor (so no savings here); sellers are giving up significant equity in exchange for convenience, but in some situations this is what is needed. On a $300,000 house, for example, giving up 5 to 10% of market value — plus paying 12% commission or fees and making all repairs needed — can add up rather quickly. The market value hit is worth $20,000, and the higher commission/fees is worth at least $18,000 — plus the repairs; that’s $40,000 less in their pocket by going with Opendoor versus hiring a real estate agent and selling the traditional way.

Opendoor also reserves the right to renegotiate after the inspection period if it decides that something they discover will affect the resale value. This might just be a bad color option for the countertops so that $5,000 hit is added to fees, but the property still shows as selling for 96% of market value. (This is how Opendoor makes money but appears to buy close to market value.)

 

Door: 

With door.com you pay a flat listing fee of $5,000 plus the 3% buyer’s agent commission. The biggest difference between Door and a dedicated agent is Door uses a very hands-off approach, which makes sense when only charging $5,000. They list your home in MLS and that’s the extent of it. No open houses, no dedicated service (you work with a pool of agents), and no additional marketing. They will also not show your home for you if an unrepresented buyer contacts to see the home or if another agent is unable to show their client and needs assistance which happens quite often. 

 

For sale by owner:

Selling the home on your own. In this scenario you attempt to market, show, negotiate, and sell the home yourself. One of the biggest disservices with this route is you are unable to list the home on MLS which is how most buyers and agents find homes for their clients. MLS is the most accurate and up-to-date source for homes in DFW. While Zillow and similar sites are great, they tend to be 1-3 weeks out of date with current property statuses in our market. In this selling scenario, you still will pay 3% to a buyer’s agent if an agent brings you the buyer. If you are not a lawyer or a seasoned real estate professional you may find this is a much more time-consuming and money-draining route. Of course, that will not be the case in all scenarios but is in most. The home will take longer to sell due to lack of audience, costing you more in the long run. Another important fact to note is 71% of all real estate-related lawsuits, according to the National Association of Realtors, are for sale by owner transactions. 

 

In summation, you have many options, and while we at Hoss Group Realty would be honored to work for you we would also be honored to discuss all your options even if that means not working with us. Our goal is for you to get the most money in the least amount of time with the least amount of hassle with the highest level of service, and if that means another option than our team, then that’s what we want for you. We are here to be your resource and answer any questions you have.

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Source: Meleese Styles Hoss – Realtor® at Hoss Group Realty