How Much Can You Make Selling Your Home?
Hey, this is Mike from Mike Buys Houses here, and I’m trying to have a quick conversation about the different costs that are associated with selling your property through traditional means via a homebuyer using a realtor and compare those costs to the process of selling to someone like me, an investor.
The first thing that you need to check out when selling with a realtor are the fees that they put into contracts. When you really dig into the numbers, most realtors will charge somewhere between 4-6% of the total sale as their fees for facilitating the transaction of selling your property for you. To be perfectly honest, that is a reasonable price, if not a steal for you!
If you watch my video on selling your house without a realtor, you’ll learn all the different things that realtors do to help you sell your property, and if you don’t have time to check out that video, then just trust me, there is a lot that goes into it. Realtors will market your property, deal with potential buyers, weed out people who aren’t qualified buyers, and help you negotiate terms and understand the details of the sales process.
Therefore, even though 4-6% isn’t a bad price for all of those services, it is still something that you need to consider. For example, if you sell your home for $200,000, you will be paying somewhere between $8,000 and $12,000! You need to account for this cost through either the equity in the home or additional money that you need to bring to the table.
Cost of Home Repairs
The second thing that you need to consider when you’re selling your property traditionally is the repairs it needs. You’re going to have to be able to pass the certificate of occupancy in your area in order to sell your house traditionally, and depending on the type of loan that the homeowner who is buying the property get, there may be even more stringent requirements that are needed in order to move the property.
This means that you may need to save some money and time in order to make sure you can take care of all those repairs and changes needed. If you’re going to be selling your property traditionally, you’re also going to need to work on staging your house to present it in it’s best light.
Think of this like the most intense spring cleaning you have ever done! All those nooks and crannies that you never clean or fixed up need to be addressed this time, as that is what potential buyers are going to notice first. Any weird smells, odd stains, cluttered rooms, or other things like that are all that it takes to ruin a sale.
Don’t feel bad if this is similar to your case, as most homeowners don’t have the time or resources to get their home in staging condition! It’s not even just cleaning up, but also ensuring that the landscaping is pristine is critical, as that is your home’s first impression to every buyer. The curb appeal of your property is vitally important as that is what attracts potential buyers.
If you are currently having a hard time finding buyers or if you are getting very low offers, a good idea is to take a real hard look at your landscaping.
On the other hand, if you are selling a property to a buyer like me, say goodbye to all of those costs we just discussed. There is no need to make repairs, clean up the house for staging, or invest any time or money into landscaping. I buy properties either with cash or on terms, but all of my deals are for the home in its current condition.
Due to the ability to close deals through terms, I can usually also offer far higher amounts for your property than you have received as well.
However, that is not the only benefit to working with an investor. You will also be able to realize savings through the closing costs.
When selling traditionally, the closing costs for the deal can be pretty significant. This is due to how much goes into that term closing costs.
The realtor fees, staging, landscaping, repairs needed for passing the certificate of occupancy are all fees that you have already had to incur, but those are not even part of closing costs. I go into more detail into this concept in my article on closing costs in Philadelphia, but a real quick overview is that closing costs include lender charges, title and settlement charges, the cost of selling the actual property and taxes, and any seller concessions.
Often, you find out right at the end of the process, either at closing or right before then, that you need to pay all of these fees. So, even though you might be thinking of paying 4-6% going into the process, but the reality is that you will end up paying closer to 9-10% in costs to sell your property traditionally.
That is assuming the property is in decent to good condition. If your house is in less than ideal condition, then those costs are only going to increase. So, if you don’t have a lot of equity in the property, then you will need to find funding for these costs out of your own pocket.
This is why people tend to reach out to me to find out what their options are selling to an investor, as there are ways to save money in the traditional sales process, but those marginal benefits pale in comparison to the savings and profits you can turn when selling your home to investors.
I cover all of those costs and inherit all of your property’s problems and pain points. You sell your property quickly, often for more money than you have been offered before, and have to put no effort into fixing up your home.
If this sounds appealing, or if you want to talk through any of the information I discussed above, then fill out the below form and we can chat. Looking forward to speaking with you!