When you need to sell your house fast, you might feel overwhelmed. You have to clean your house in just a few days, and pick an agent you trust, and hold an open house every day, and….. well, you get the idea — it’s a lot. Plus, after all that, you still might not get an offer.
Whether you’re moving quickly to avoid falling behind on your mortgage or you have to relocate for work, you have two main choices when it comes to selling a home quickly. You can go the traditional route of listing your home on the MLS (Multiple Listing Service) or you can sell it for cash on your own and circumvent the need for a real estate agent.
Before you know which avenue is right for you, it’s important to have a grasp of the fundamental differences between these two strategies. Let’s talk about it.
Finding a Buyer
The most appealing reason to use the MLS is, in theory, that you have access to a wide array of buyers. You can reach thousands of potential Sacramento home buyers in an instant when you list your home for sale. However, that has it’s pros and cons. You may have to content with offers that fall through, buyers who insist on strange improvements before they make an offer, and a lot of interest that never amounts to anything. If your property requires a lot of improvement — you could hear crickets after posting your listing.
When you sell to a cash investor, they are the buyer. If they agree to take on your property, the search is over. You may have to show your property to a few cash buyers before you find someone interested in the project, but you won’t have dozens of people traipsing through your property on the weekends who don’t know enough about real estate to see the potential in your home.
Contingency and Inspection Process
Listing your property on the MLS also means going through the standard sale process — which includes contingencies and inspections. Some of the most common contingencies include buyers who will only complete the sale if their current home sells first, and appraisal contingencies that require an official valuation at or above the buyer’s offer. There is a lot of room for things to fall through. Home inspections can turn up everything from foundation issues to drafty windows — and potential buyers can pull their offer over issues large and small.
Selling to an investor usually eliminates all contingencies and inspections. Your all-cash buyer will assess the property before they make their offer, understanding that they are buying it as-is. You don’t have to worry so much that the contract will fall through because of old plumbing. An investor goes into the sale knowing there will be some improvements necessary to the home.
Putting your home on MLS gives buyers a chance to have a bidding war. You can price your home against comparable properties (comps) and if you don’t like your first offer, there is always the option to hold out for a better one. If getting the highest price for your property is your top priority despite your need for a fast sale — giving the MLS a try is usually the right choice. You never know: You could get an incredible offer after your first open house.
Investors may not offer you the full market value of your home, especially if there are known issues. However, because the sale is so expedited, you’ll be rid of your home’s carrying costs almost immediately. Imagine a scenario where you could get $25,000 more for listing your home on the MLS. But it could take four months to complete a sale. All the while, you’re still paying your $2,500 mortgage, property taxes, home owners insurance, the water bill, etc. In the end, you may forgo less money than you’d think to sell to an investor. This is particularly true if you know your home isn’t going to get top dollar because it’s outdated or needs major renovations.
Time to Payment
Finally, selling through the MLS involves an escrow process. An independent company holds the buyer’s money and releases it after all contingencies have been cleared and the documents are ready. An escrow can be as quick as 14 days, but it’s more likely to be 30 or 45 days. Even if you get an incredible offer, you may not have the funds for up to 6 weeks. If you need to sell fast to afford a home in your new city or pay off other debt, this can be a frustrating wait.
Selling to an investor could mean money in your pocket as fast as 7 days. And, if you negotiate a way to stay in your home for a month, you still have some time to carefully select your next home.
Interested in selling to an investor? Call California Family Homebuyers today at 916-496-3737!