How You Can Make More Money When Selling Your House
When considering selling their house many people think only of the traditional model of getting an agent, letting them list the property, having all the other agents in town showing it, and if they are among the lucky ones, eventually selling it as a result of that process. Getting close to market price for your property is often the result, which seems like a good and fair deal if you are among the successful sellers, but what most people have not considered and are not aware of is that the market price isn’t actually what you will get.
People fail to realize that over time there have come to be many interested parties to a real estate transaction, and with the traditional sale those parties all have their hands out - Costing them lots of money (Last traditional sale I did I counted about 23 entities or people taking money from the deal). What if there was a faster way to sell your property, much faster than a traditional sale – while avoiding most of the hands that take money from the deal in a traditional sale?
Actually there is a way, though you may not believe it at first – It’s selling to a real estate investor. Sounds like BS right? After all aren’t real estate investors only making money by stealing peoples houses at dirt cheap prices? Well many are making money by buying real estate at very cheap prices – but there are some real estate investors who have found other ways to do deals where they make the seller more money and also make money in the deal themselves. Selling a house without a realtor and indeed selling to a very specific type of investor can make you more money when you sell.
Here's how it works: You think: I want to sell my property in Atlanta and contact this specialized type of real estate investor, who buys your property right away at a price near market value, without you having to look for buyers or market the property or stage it or clean it for weeks and weeks and wait around and show it or have it shown dozen of times hoping one of the people viewing it will make an offer. This saves you lots and lots of trouble and time and money immediately. But hold on you just said the real estate investor pays you close to market value – whereas with the traditional sale you should get market value. So how are they making you more money?
It's simple actually – but this is the part most people miss – in a traditional sale you will have costs on average and in general ranging between 9% and 17% of your asking price – assuming you were asking near market value. Some balk at this at first but it’s a fact and it’s easy to understand when you consider 6% agent’s commissions, 2-4% seller paid closing costs, 1-2% holding costs (utilities, taxes, insurance, rent, maintenance, staging costs etc), and 2-5% negotiation room.
As a result of this you will find that if you need to sell a home fast in Atlanta asking $200,000 with the traditional sale what you will actually net in your pocket could be only $165,000 and you’ve got lots of hassle involved and lots of time – cleaning it, showing it, marketing it, buyer’s backing out on you after being under contract for months, inspections, appraisers, etc…
The real estate investor offers you $180,000-$190,000 right away for your property and you don't have to go through any of that process. And if you consider you may make an additional $20,000-$25,000 on the deal by going with the quick and easy sale to the real estate investor - granted a specialized one – over a long tedious traditional sale, it starts to make a lot of sense.
Well why would the real estate investor be willing to offer you more then the market will give you in the traditional sale? In truth, it does take a sophisticated real estate investor to do this deal; however, it’s in the deal structure. You see the real estate investor can do things that the market cannot do in the traditional method and avoid many of the hands coming out that take money from the deal. In short by cutting out lots of the other costs involved in the traditional transaction there’s more money for you the seller and for the real estate investor the buyer.
There is one caveat however, and that is that you have to be willing to treat your property as an investment and not expect all the money up front on the sale. The thing to realize about this investment is that it is a safe investment, and the investment should pay you off very well at the end, so long as you are dealing with a real estate investor who is honorable and knowledgeable enough to make the transaction work.
So How Does it Work?
If your property is free and clear, meaning you owe nothing on the property it is pretty straightforward, and if you do owe something on the property it’s not that much harder – either transaction can easily be handled by a savvy real estate attorney.
The real investor will generally pay you a “down payment” up front which will usually need to be reasonably low; it’s negotiable, but usually will be a small percentage in order to make the deal work well. The investor will then pay you a monthly payment much like you are the bank - that payment is secured by the property so the investor will have to pay it. And then a final cash out will come at a time agreed-upon by both you and the investor. So you, the seller, make money on the house in the beginning on the down payment, in the middle in some cases from the spread between how much you're paying out on the property and how much the investor is paying into you, and at the end when you get the final cash out. From our example of a $200,000 house you could easily make up to $25,000 more on your property by selling it this way – ie treating it as an investment and not requiring all the money to come up front.
So next time you are thinking of selling your house, perhaps selling your house without a real estate agent and treating it as an investment is a very good idea. You can make more money by selling it to a savvy and knowledgeable real estate investor. I don’t know about you but if I was selling my house and had the option of making $10,000 - $50,000 more on a much easier sale with less work - even if I had to make the money over time and not all upfront - I would seriously consider it. We at Lion Guard Investments are experts in this process and will treat you fairly. Call Us today - And Let's Get This Done.