Spouse and I live in a very desirable property. We are fortunate to be in excellent financial shape…no mortgage. Could finance the sale ourself depending on where/how we would want to live after the sale.
We definitely need to downsize and will be working on that this summer and into the fall and beyond. The word will get out that our property is available. For the right price we could move in a matter of months
The main reason I can see getting a realtor involved would be to market it beyond the local area. That is important because it is within commuting distance of a good size metro area as well as being a potential vacation home for someone even farther away.
So, lots of questions. To start with …
Ways to market it myself beyond the local area?
Ways to get a realtor involved for a lesser commission?
Is it possible to reserve the right to sell to certain people without paying a fee?
Ways to handle those who start to inquire. Obviously I could take a name and phone number but if someone was very serious I might want to do more than that.
Why not go for broke and eliminate the broker entirely? Put the word out that in X months time your place will be available. Get names and contact info from anyone that asks about it. If they come to the door and it isn’t too inconvenient, show them around a bit.
When the time comes start contacting them and indicate your asking price. See what happens. Brokers and agents have their place, but finding a buyer at a price you like is gold. If my strategy bombs then you find the broker or agent.
Back in 1997 I was preparing my place for sale. Not listed, and not making any effort to let anyone know the situation. I still had people coming to the door asking if the place was for sale. When the time came I had two serious buyers and sold to one of them. I even filled out all the disclosures, contracts and set up the escrow. For free.
Finally, If you can get the price you want, do you really care if your place gets a wide exposure?
The previous owner of my house did not use a realtor to sell her home to me. I found out about the house from an ad she had posted on Craigslist. I was able to make an offer twelve hours after the ad went out. It’s hilarious because I hardly ever go on Craigslist. But I had decided to check it out on a whim. And what do you know, this “whim” resulted in me finding my dream home.
The Craigslist house ads for my location seem to have a broad radius. I live in Richmond VA, but there are ads for properties all along the Mid-Atlantic region.
Doing a private sale without the services of an agent is certainly a great way to do it as long as you and the buyer document every little thing. For the inexperienced though, there can be pitfalls.
An agent will guide you through all that saving you(possibly) a great deal of aggravation. My first house I bought with the services of an agent. My current home there was no agent, but I’ve known the person my entire life, so I had no qualms about buying from him without an agent.
Same here. We found the house because a realtor down the street mentioned it. They were in the middle of renovating it with the intent to sell so we wandered into their renovation work and chatted and eventually ended up buying the place.
They did everything themselves. We’re first time buyers (at least here in WA) so we did hire a realtor and a real estate lawyer at fixed cost for services (I think $3500 in total). But that was strictly between us and them, the seller wasn’t interested in getting involved with our commissions or anything. They kind of sold it like a grocery store item. “Here’s the advertised price, pay that amount please”, although they were pretty open to the usual contract mechanisms (mortgage and inspection contingencies, etc.). Which was actually better than normal, since Seattle was a nuts sellers market at the time and most “standard” seller / buyer realtor situations seemed to be bidding wars with crazy “no inspection contingencies” desperation and the like.
It worked out well for all of us. I think both seller and buyer ended up spending a bunch less than we would have if we went the standard 3-6% commission route. That would have been $16-32k! We still got our inspections and solid representation in negotiations (even more so, since we had an actual competent lawyer, which I don’t think is typical in WA). They got all their money to keep for themselves, and knew what they were doing since this wasn’t their first time …
I think I should have read your OP more than once.
Ways to market it myself beyond the local area?
Craigslist was mentioned. Another mechanism would be to develop your own internet site showcasing your place. Most people don’t have the skills to build their own but it might be worth the money to have someone build one. Your internet service provider probably allows subscribers to store material on their servers, so you don’t need your own domain or any of that headache.
Having a site means you have nationwide exposure if you can figure out how to let people know about it.
I do have html skills and I did build my own site. It was simple but allowed me to present my place exactly as I wanted. Then I used Craigslist and a local realtor to point prospects to my home-built site. To be honest, my site was not a factor in a sale. But I will do it again if I sell my current place.
Ways to get a realtor involved for a lesser commission?
The only way I can think of is to make it so easy to sell that a prospective agent won’t have to expend any actual marketing effort. He or she just does the paperwork.
Is it possible to reserve the right to sell to certain people without paying a fee?
I’m not sure what you mean but I would be cautious when issuing a “reserve the right to sell” condition. You know, discrimination.
Ways to handle those who start to inquire. Obviously I could take a name and phone number but if someone was very serious I might want to do more than that.
Majority of buyers use MLS (multiple listing service) though online listing services such as realtor.com ; Zillow.com ; redfin.com; etc.). In order to get your property listed on the MLS, you need to have the property listed through a realtor. You can find a flat fee realtor that you pay a flat fee to list your home on the MLS. In these cases you are typically a for sale by owner (FSBO) and as such will need to do your own research on price setting, negotiating with the buyer realtor, negotiating the commission that you would pay the buyer realtor, etc.
You might be able to list the property as “buyer pays the entire real estate agent commission.”
Around here the full commission is usually paid by the seller, and split between the seller’s agent and the buyer’s agent. I don’t know if that is just custom or somehow legislated, but you could ask a real estate agent if an arrangement where the buyer pays the entire commission is possible.
When I bought my house, they were doing all the showing and advertising on their own. When it came time to put in official offers and begin the purchasing process, they handed everything over to a real estate agent who took us from ‘we’d like to buy this house’ to the closing. I believe it was done for a smaller commission.
That sounds like a right of first refusal. But I’m not entirely sure if that’s what you mean. If you’re doing this on your own, there’s no reason at all why you can’t pick and choose who you want to sell it to.
However, if there’s a specific buyer you have in mind, you can sign an agreement with them that states that before you sell your house, you’ll give them the option to buy it first (for some set, likely higher price). If they refuse to buy it, then you can sell it to someone else.
It’s down with other things, including commercial real estate. I don’t see why it couldn’t be done here.
I’d think this wouldn’t be too much more complicated than arranging for them to see the house and if they put in an offer you can go from there. Many of the buyers will also have their own agents as well.
One other thing to keep in mind. The RE agent makes a not insignificant amount on the commission. It’s in their best interest to sell it for as much as possible and they can likely command more than you sell it for.
Are the incentives as clear cut as that though? The vast majority of their commission is going to be based on “did they sell the house or not”. The specific price is a little more marginal. It’s in their interests to turn their labor into commission revenue as efficiently as possible over all their sales, not necessarily your specific one.
So for example, if a house is priced kind of in the middle of the road of competitors at $500k maybe they could put in grueling hours trying to get it sold for $550k for a $16.5k commission, risking not being able to sell it at all and getting nothing. Or maybe if they can get away with it they could sleepwalk through the process of picking a winner out of the buyers clamoring at their door by selling it for $450k for a $13.5k commission. That’s something like 80% of the money for maybe a lot less than 80% of the work.
And if that means they can sell a lot more houses in their working hours it becomes even more of a negative incentive. I’m not claiming this is universal or selling agents are always low balling their clients. But I can certainly imagine certain markets where the incentives actual work backwards, and selling for lower prices nets them more aggregate commission.
FWIW, friends who wanted to sell their own houses said that invariably, the first ten people who contacted them were realtors trying to get them to sign up.
Steven Leavitt talks about this in his book Freakonomics. When realtors sell their own homes, the home stays on the market longer and they tend to hold out for the asking price. As you mention, not necessarily a rip off - more a reflection of marginal utility. Is it worth holding out (on the realtor’s POV) for an extra $150, or push for the immediate sale?
Thanks for all of the excellent suggestions… I never thought about Craigslist until mentioned by a couple of people above.
“Reserve the right to sell to certain people”… By that I meant on a zero commission basis to the interested parties that contacted me already if I decide to list it down the road.
Personally, I would no more FSBO my house than I would represent myself in criminal court or remove my own wisdom teeth. I know people, however, who have done each (not the same person!). All I want to say is to not, under any circumstances, use any phrase remotely close to “Reserve the right to sell to certain people”. That could be easily be interpreted as violating the Fair Housing Act…
I explained what I meant. Can an individual be sued for saying something like that?
More generally, when selling property of any kind, who has standing to make a complaint ? Does real estate fall under a dif category (in Michigan if it matters)?
Why do you need to “go big time” and market your house nation-wide?
What if the local FSBO/Craigslist or other old-school methods* worked? And you got offer(s) at a fair price?
When we bought our first house the owners wanted “a nice family” to move in, and that was preferable to making more $$$ by selling to “soulless yuppies”.
*Don’t forget word of mouth! We bought our house when someone called us up and explained that they’d walked into work and announced that they needed to sell their house fast ‘n’ cheap, and a co-worker yelled across the office “Call the Digarinos! They need a house, and were just complaining about house prices!”
Oh, and a neighbor’s house sold within hours after they tacked a hand-written “For Sale” note on their door, with just their phone number.
It seems to me the realtor’s incentive is to sell it fast. The market could turn at any time, or their contract with the owner expires and the owner may go to another realtor.
You can put an add on Zillow for free that looks exactly like any ad a realtor can put up. We sold a house in one day doing that recently. After you get a buyer, all the work is done by the title company, so you just find a contract online, put in the info, and hand it over. I think realtors are very overrated from the sellers side, but usually necessary when you’re shopping for a house.