When most people think about selling their house, they picture a very specific process. You hire a real estate agent, they list your house on the open market, buyers line up to make offers, and you close with a specific buyer. While that is the process for some home sales, it’s certainly not the only way to sell a property. Real estate investors offer another avenue for sellers to consider when looking to move on from their current house. But it can be hard to know exactly what the difference is between them and why one might be better for you than the other. Here are three ways to tell real estate agents and investors apart in Dallas, Texas.
To List Your House or Not to List Your House
When you work with a real estate agent or Realtor, they are going to follow a specific process in attempting to sell your house. As licensed professionals through their state and municipalities, they are required to follow specific rules when working with you. You enter into an agreement with them to be your sole representative in negotiations for home sales. They then list your house on the MLS and other real estate listing services under their name and company. When potential buyers want to learn about your house or come visit it for an open house, they have to go through your real estate agent.
The most obvious benefit of hiring a real estate agent is that it means you can hand off so many responsibilities to someone else. In theory, that person has a good understanding of the local real estate market, rules and regulations, and market conditions. They’ll be able to cut through the red tape and handle all the documentation and fees you need to handle in order to get your home on the market.
If you decided that you would rather not list your house on the open market or deal with a succession of potential buyers, you can speak with a Dallas real estate investor instead. A real estate investor (also referred to as a cash buyer or as-is buyer) will meet with you to discuss your house and then tour the property together in order to see the condition. Based on this and any pertinent information related to the property (financial concerns, tenants, hoarders, termites, etc.), they will make you a cash offer on your Dallas home.
While this offer is often below market value, it eliminates all of the costs, time, and commissions involved with selling through a real estate agent. The point is that the real estate investor wants to purchase your property as-is (in its current condition) with the intention of getting it into a condition where they can re-sell it for a profit (or be a landlord to tenants on the property).
A Different Timeline
When you’re selling your house with a real estate agent, you are often at the mercy of the open market and buyers. There are millions of variables to consider, and every house is different, but it’s likely that it will take at least two or three months from the day you list your house with an agent to the day it enters the closing process. After that, it’s likely that it will take another one or two months for the closing process to be completed, for the buyer’s lender to approve the loan, and for you to receive everything you are due in the sale agreement. Of course, it might also take much longer than this if the market isn’t working in your favor or if the condition of your house makes it hard to find a buyer on the open market.
When selling your house to a real estate investor, the timeline is much quicker. In fact, it’s up to the seller to determine how fast they want the transaction to take. The investor will often make their offer within days and the seller can decide to close the deal within days as well. Since this process doesn’t involve mortgage companies or real estate agents, there are far fewer requirements, fees, and contracts to tie up the timeline. You’re not waiting for someone on the other side to do something before you can move forward. Both parties are motivated to conclude the transaction as quickly as possible.
Real estate agents and Realtors do a lot of work on behalf of the seller. They not only handle all of the listings but they also do the negotiations for you as well. They deal with buyers and their agents and understand how to maneuver the market to find you the best deal possible. However, they’re not doing any of this for free.
When you hire a real estate agent, they are going to get a commission for selling your house. And the better or more respected the agent, the higher that commission fee might be. Sellers should expect to pay as much as six percent of the sale price to the agent, which is going to cut into whatever profit you make after paying off existing loans and other fees. So if you end up selling a house for $200,000 and making $25,000 in profits after closing costs, your agent is going to get $12,000, which means you end up with an overall profit of $13,000.
Of course, you could hire a discount broker instead but then you’re also not going to get all of the services other agents would offer.
When you sell your house directly to a real estate investor, there are no fees or commissions. Since you’re not dealing with a real estate agent, appraisers, or inspectors, you don’t have to worry about all the fees that each of them come with. You’ll get an offer from the real estate investor and that’s the only number that matters. In fact, they will sometimes pay for any closing costs as well, which cuts down your financial responsibility greatly. Of course, the offer they make will be below market value given their business model, but you can not only compare that to your true profits if you went through the entire market sale process but also the time cost involved as well.
Interested in working with a real estate investor or just getting a no-obligation quote? Contact Jamie Buys Houses today to find out what kind of offer you can get without all of the fees and costs involved with real estate agents.