Every day I speak with homeowners pondering this question: should I sell my home off-market to an investor or list on the MLS with a realtor?
Real estate investor websites self-servingly preach about their “hassle free” cash offers. We operate differently at House Heroes LLC – we recommend home sale strategies best suited to the homeowners’ needs (even if we don’t make a dime). This blog openly advises homeowners as to when they should and should not sell directly to a real estate investor like House Heroes LLC.
We Buy Houses
Call Us (954) 676-1846 Send Text Send Text Send Text or Fill Out This Form For Your FAIR Offer.
Fast Sale. You’ve heard the childhood story “The Tortoise and the Hare”, right? Selling your home off-market to a real estate investor is “The Hare” and selling on the MLS with an agent is “The Tortoise.”
Real estate investors buy homes fast. Investors buy “as is” – the seller makes no repairs. A substantial home renovation and sale takes about 5 months; longer if the person in charge is inexperienced. By selling directly to an investor, home sellers save time on renovations and can move on with their lives. For example, companies like us in the US, or Zoom Property Buyers in the UK, can buy single-family or multi-family properties in as-is condition.
Beyond repair time, MLS listing sales have time sinks not associated with off-market sales to an investor. The seller must hire an agent, prepare the home, and do showings. Some sellers are put off by the thought of strangers repeatedly stopping by their home for showings. Once a prospective buyer is located, there remains negotiations, inspections, and appraisals. This MLS process adds up to months upon months, and in some cases years.
Sometimes though, “The Tortoise” wins the race. Perhaps you don’t mind waiting, and your home doesn’t need repairs. In that case, you don’t gain much from an investor’s “fast” “as-is” offer. The slow and steady MLS sale yields a higher sale price. Your best course of action is to hire a local real estate agent and list the property on the MLS. Contact us for a referral to a qualified realtor.
Cash Offer. Want a giant pile of cash for your home? An advantage of selling off-market to an investor is that investors buy homes with cash. Sales to a regular home occupant normally require conventional mortgage financing. Conventional mortgage financing is quite frankly a headache. Bank approval of the mortgage can take months, and banks may decline the mortgage days before closing if the buyer does not qualify. Banks also refuse to issue mortgages when property fails inspection or appraises too low. This frustrating process can result in the seller wasting precious months. Cash offers eliminate the conventional mortgage finance struggle.
Cash is not always king, however. Houses in great shape aren’t typically denied a mortgage based on low appraisal or inspection failure. Sellers willing to wait to complete the sale won’t be impacted if the prospective buyer ultimately fails to qualify for the mortgage. Cash provides little benefit where the property is in excellent shape and there is no hurry to sell.
Maximum Visibility & Realtor Commission. Listing on the MLS allows for maximum visibility – imagine a giant magnifying glass over your house. In the age of Zillow, Redfin, and Trulia, anyone with internet signal will discover your sale. More interested buyers can result in a bidding war driving up sale price. The bidding war is most effective on property in good condition, since both real estate investors and home occupants will make offers.
The MLS visibility comes with a cost: namely, 6% real estate agent commission. This amounts to thousands of dollars. The question then becomes: is 6% commission worth the extra visibility gained from the MLS listing? If the property is in excellent shape such that investors and home occupants will make offers, the 6% commission is absolutely worth it. When we (i.e. House Heroes LLC) fix-and-flip our properties, we always use MLS listings.
The situation is different where the property is in poor shape. Whether listing on the MLS or selling off-market, the buyer will be an investor. In that case, 6% realtor commission may not yield a higher sale price (and the more lengthy MLS listing process drives up holding costs in the form of on-going maintenance, taxes, utilities, and insurance). Where property is unsecured and in extensively bad shape, keeping ownership may present a legal liability risk. Home sellers should carefully weigh their options and consider selling to a real estate investor like House Heroes LLC.
Summing it up! The advantages of selling to a real estate investor is a fast sale transaction, the seller does not have to lift a finger, cash offer, and no 6% realtor commission. The advantages of an MLS listing is maximum buyer visibility and an agent working on your behalf. If you want to sell fast and the house needs repairs, we humbly recommend a sale directly to an investor like House Heroes is a great option. If you have no need to move quickly and your home is in great shape, we recommend paying the 6% commission to list on the MLS.
We Buy Houses
Call Us (954) 676-1846 Send Text Send Text Send Text or Fill Out This Form For Your FAIR Offer.
If you need to sell your property or land fast, selling directly to a real estate investor is your best option.
Be it an idle or vacant land, real estate investors can give you a fair assessment of your property’s value.