Sell Your House Yourself

4 Ways To Sell Your House

A house for sale with a dog in the front yard

When it comes time to sell you house you have options. Some more expensive than others and an actual free option. There are actually 4 ways to sell your house. I’m going to discuss those different ways here and the cons and pros of each.

Using A Real Estate Agent/Realtor To Sell Your House

Hiring a real estate broker and using one of their agents is by far the most popular and well known way to sell your house. Often the first thing that comes to a potential home sellers mind is hiring a Realtor. Hiring a Realtor is effective and will get a home sold but it’s also one of the most expensive.

If one does go the Realtor route make sure you shop around. With all of the real estate market and listing information free to the public, experience isn’t as important as it used to be. Commissions are important because that’s what eats up your profits. You can find agents that will list your house for less than the usual 6%. Keep in mind when interviewing agents that we are trained to convince you that we are worth it.

Whether or not you hire a real estate agent or not has to do with your personal opportunity cost. According to Zillow the average home price in the U.S. in August of 2021 is $304,000. Assuming you have an average priced home a 6% commission will cost you $18,240. Is the time it will take you to sell your house worth more than $18,240? If so then you should consider hiring someone to sell your house for you.

Pros

The pros to hiring a real estate agent are an agent will do most of the paperwork for you. An agent will help you to price your house and let you know what you should do to get your house ready to sell. Realtors guide you through the process and help to schedule inspections, appraisals and closings.

Cons

The cons to hiring a real estate agent are, of course, the huge expense.

While not so much a con, but a realization, you should know an agent will let you know what you need to do to get your home ready to sell but it’s still up to you to do it. That means repairs, updates, cleaning and anything else that needs to be done is still on you.

An Ibuyer Will Buy Your House

Ibuyer companies to help sell your houase

An Ibuyer will buy your house directly from you outright avoiding the anxiety of listing. With an Ibuyer you avoid opening your home to strangers for showings, unknown repairs during the inspection process, waiting for the home appraisal and fretting over your buyers financing. No need to sell your house on the open market when using an Ibuyer

Don’t mistake these for the many flippers that are working the real estate market. Ibuyers are not flippers. You see those signs on the side of the road that say we buy houses. It’s not those people. An Ibuyer will give you close to market value for your house, maybe a little less than you could sell on the open market. There is a service fee that averages around 5%.

An Ibuyer will make you an offer. If you accept there will be an inspection of the property and then a final offer including any repairs that the Ibuyer deems necessary. Sometimes Ibuyer’s can be a little more expensive than a real estate agent after repairs and everything is said and done but there’s no doubt they are super convenient.

Ibuyers are starting to gain traction in major US cities. Home sellers are attracted to the stress free aspect of selling a home using an Ibuyer.

Pros

The pros to using an Ibuyer are the convenience, speed and the assurance of the final price without the anxiety of waiting for offers as you sell your house.

Cons

The cons to using Ibuyers, again, is the cost. Ibuyers can be expensive and you may get less money for your house.

Wholesalers Will Buy Your House (We Buy Houses)

Wholesalers are another group that will buy your house outright. The difference between wholesalers and Ibuyers is wholesalers want to buy your house for a lot less than what it is worth. Their goal is to buy a house as cheap as they can get it and resale it, or “flip” it at a significantly higher price.

Wholesalers mostly look for homeowners that are in distress such as being close to foreclosure or underwater. Sometimes the more unscrupulous sort will prey on older people, new widows or widowers or folks that are in desperate financial stress.

When dealing with wholesalers make sure you fully understand the contract you’re signing and the implications it can have on you in the future. Many times the homes are “bought” and the house is still in your name but sold or rented to someone else. Wholesalers make your mortgage payment while collecting the difference as profit. The clause in the contract can be left open so the wholesaler has no deadline to get the mortgage paid off and taken out of your name. It’s like a free ride for them but ties up your credit.

If you can’t sell your house because your underwater consider renting it out and using the rent to pay down the mortgage until you can pay it off.

Pros

Using a wholesaler will get your home sold fast. If your underwater or in financial stress a wholesaler can really be a big help.

Cons

Some wholesalers can be unscrupulous and not fully explain the implications of the process. Getting involved with this type of home sale can tie up your credit for years. It is highly recommended that you hire an attorney to look over your contract and explain it to you.

The wholesalers goal is to buy your house as cheaply as possible. Make sure you know what your house is actually worth.

For sale by owner sign in front of a house

By far the best option when it come time to sell your house is to do it yourself. That’s where you’ll make the most money with the least expense generating the most profit. When it comes to disrupting the real estate industry that is what’ll do it. When regular people figure out how easy it is to sell a house.

Real estate agents know how easy it is. That’s why there are so many of us. Easy money.

New agents aren’t taught how to sell a house. Selling a house is easy. Mostly what we learn in real estate school is real estate law. Real estate coaches and brokers teach us how to fill out paperwork and to convince you that it’s difficult to sell a house and why you need us.

Most people shopping for homes find them on their own on sites like Zillow. When you sell your house yourself and market it on Zillow home shoppers will find it and call you directly.

Some home sellers think that the MLS is the way to go. By hiring a real estate agent you can get your house on the MLS but there is also a less expensive way. Hire a flat fee service. A flat fee service will list your home on the mls for a fraction of the cost that a listing agent will charge you. Keep in mind that using a flat fee service means you are willing to pay a buyers agent, usually 3% of the contract price unless you can negotiate a better deal.

Pros

When you sell your house yourself you get to keep all your money. It’s the most profitable way.

Cons

When you sell your house yourself you have to do all the work. While it’s not hard to sell a house it can be time consuming.

Who Writes Up A FSBO Contract

by Joel Weihe

A good question to ask when you’re selling your house yourself is who fills out the FSBO contract? As the seller, you do, mostly. That’s because you have the most to lose if it’s not done properly. Once you and your buyers have come to an agreement, whether it’s in person, by telephone or by email you need to get all the contracts and state disclosures in order. As the seller you need to do that.

Working With A Real Estate Agent

The buyers agent draws up the contract in a typical real estate transaction involving real estate agents. If you’re willing to work with a buyer’s agent then the agent will do all of the paperwork with legal contracts and disclosures. They will do all the work.

Working with only a buyers agent still saves you half the commission normally paid to real estate brokerages.

Working Without A Real Estate Agent

But, if you aren’t willing to work with a real estate agent, and there’s nothing wrong with that, then you, as the seller, should take on the responsibility of working through the transaction. That means making sure all the FSBO contracts and associated paperwork are completed correctly and fully. It will be your job as the seller to work through the process and keep everyone in the loop. That includes the buyer, title or escrow company and the buyer’s lender if financing.

The contract you use will likely have contingencies written in. Most real estate transactions are contingent on buyers being able to obtain financing, the appraisal, and a home inspection.

As the seller it will be your responsibility to keep the transaction moving forward.

FSBO Contract

Where does a seller get the necessary FSBO contracts and disclosures? Most tile companies or escrow services will have some form of a contract you can use. The federal required lead based paint disclosure and pamphlet you can find free from the EPA website.

A better option is to find a complete state specific real estate contract package on-line that are drawn up by legal professionals. There are several companies that provide such a service, at a small cost.

You, as the seller, will personally fill out the FSBO contract. The two parties will need to meet and go over everything. This is a good time to collect the earnest money from your buyer. Make sure you let him know to bring the earnest money upfront before the meeting. After you have sat down, gone over the contract and agreed on the terms, you both sign.

And then you’re done. As mentioned above it is in your best interest if you take the reins from here and facilitate the rest of the process through to closing.

It’s really not that difficult.

Why You Don’t Need the MLS To Sell Your House

by Joel Weihe

The multiple listing service, or MLS, is the place where real estate brokerages cooperate and put their houses that they’re selling so they’re all in one place. That’s where the brokerages agents go to list the houses that they’re selling or to look for homes for the buyers that they’re representing. But do you need the MLS if your selling your house?

The short answer is no. You don’t need the MLS.

In this post I’m going to talk about the more complicated answer. Why you don’t need the MLS to sell your house and different ways you can use the MLS if you do feel it’s necessary.

Full disclosure: I am a real estate agent in the state of Kansas and have been since two since 2009. I do use the MLS to put the homes that I’m selling on. I’m also not currently selling my house myself. When it is time to sell my house I will not post it on the MLS because I don’t want to pay a buyers real estate agent.

The houses for sale that I see on the MLS, you can actually see on 3^rd party real estate websites like Zillow, Realtor.com and agent corporate websites. Home buyers have the same access to viewing real estate listings as I do.

The difference between realtor.com, the agent websites and Zillow, is Zillow will post for sale by owners while the other two will not. So buyers have more homes for sale to choose from when browsing Zillow. In all honesty you will get more exposure putting your house on the MLS because it will syndicate out to Realtor.com and the agent websites.

Why Use Zillow?

Zillow.com is the most popular and widely used real estate website. They get about 36 million visitors a month. 36 million! That’s a lot of eyes.

As mentioned you won’t get as much exposure on Zillow alone simply because the mls distributes your listing to more websites. Keep in mind though Zillow is the most popular place where home buyers search for homes. Zillow is a huge multi-billion dollar company that incorporates other businesses under it’s umbrella. They have a mortgage business, a showing service and an Ibuyer department. Zillow will buy your house directly from you. Zillow an all encompassing one stop shop real estate public company.

Most of my clients end up finding their home themselves on Zillow and simply forward that information to me. Then I set up showings for them through the sellers’ agent. Granted the agents will take care of paperwork for you but at what cost? That transaction could easily have happened without real estate agents in the middle.

Zillow.com will let you list your house on there popular website for free as a for sale by owner. I’ll show you how to do that right here. That is the cheapest way to sell your house where you’ll find the biggest return. You’ll get to keep the most of your money that way.

MLS Options

If you feel like you have to put your house on the MLS, you can hire me or another real estate agent. There’s literally millions of us around the country and we’ll charge you anywhere from 4% to 7% of the contract price to put your house on the MLS. We only get paid if it sells but what a nice paycheck it is.

Housing prices have risen dramatically in the past year. It’s going to cost you a bundle more than it would have just a year ago. It’s really expensive to list your house with an agent, but it’s more than likely that it will sell a little quicker than if you sell it on your own.

A realtor will do just about everything for you. They’ll help you to price your house. A real agent will let you know what you need to do to get your home ready for market (and then you have to do it). Sometimes staging is a benefit and your realtor will get that done for you. The most useful thing a real estate agent does is to guide you through the process and everything involved in such. Everything from choosing an offer once your house is on the market to getting that contract to the closing table.

The other option to get your house on the MLS is to use a flat fee MLS service. These are companies that will list your house for a fraction of the cost that a real estate agent charges. If you use a flat fee service you get that extra exposure for a lot less money. By using a flat fee service you generally have to do all the work an agent does yourself. You’ll have to learn to price your house and how to get it ready for market.

You Choose The Method and The Returns

You can list your house on the MLS by paying me or paying a flat fee service. If that doesn’t appeal to your financial sense of well being list your house for free on Zillow. Sell it yourself saving those real estate commissions.

You Choose.

When Will The Housing Inventory Crisis End?

by Joel Weihe

neighborhood of residential homes depicting the housing inventory crisis — Housing Inventory Crisis

If you’ve been thinking about selling a house or if you’ve been in the market to buy a house or if you’ve been paying any attention at all to the real estate market, you’ve probably noticed the housing inventory crisis that we’re in. Inventory is desperately needed to cool this overheated market. Now, to be sure, a market like this is great for sellers, but not so good for buyers. It’s very uneven.

So, here we’re going to get some insight into how long this inventory crisis may last. You’ll find out what it means to you as a for sale by owner and when might be a good time for you to cash in on your equity.

For the video version of what’s happening with the housing inventory crisis check it out on my YouTube channel, Sell Your House Yourself.

Inventory Crisis

These inventory problems have been building for several years. Back in 2016, while the country was still pulling out of the 2008/2009 financial crisis, the housing market was getting back to its pre-recession levels. In 2018, a short 2 years later, as Realtors we started noticing there were less houses for sale. That continued getting worse until 2020 and into 2021 when inventory just became non-existent and that caused prices to go vertical. Housing prices have gone up 18% year over year according to some estimates.

Graph showing the housing market since 2000, the 2008/2009 financial crisis recovery and the rapid rise in real estate prices the last year.

What’s Happening Now?

But what’s happening right now with the inventory crisis? The good news for the health of the market in general is it seems to be easing, as you can see from this graph.

Graph showing housing inventory trends since January 2018 and how they have been in crisis lately.

Zillow said back in their April report that;

Signs are emerging that the nations’ ongoing inventory squeeze may be starting to ease somewhat. Just in time for the traditional busy Spring home shopping season.
Zillow April report

In April and June, the housing inventory crisis was still pretty bad. New listings were getting multiple offers, many well over asking price. In some places like California numbers like $75,000 over. And even more. Buyers were offering to forego inspection contingencies. Buyers were making up the difference in appraised value to contract price in cash. It was crazy. There are still some hotspots around the country like Southern California, Seattle, Denver and some cities on the east coast but overall it seems to be easing…a little. In July, we have started to notice more houses coming on the market and less buyers.

The buyers, I think, are going away because they’re getting priced out of the market or they’re just throwing up their hands in despair and giving up. Many sellers are cashing in and turning to renting for awhile. That’s putting housing inventory on the market. Zillow says there are 32% more listings this June than there were last June. So we’re starting to see the market start to even out some. Without a doubt it still has a ways to go, but inventory is getting better.

The Inventory Crisis Wildcard

The wild card is going to be the mortgage forbearance program that was part of the Cares Act passed by Congress to deal with the Covid pandemic. Mortgage forbearance prevented homeowners that missed mortgage payments to be foreclosed on. Those that fell on hard times would not lose their house.

That was supposed to end June 30^th. It was extended to July 30 and the request period to September 30th. The president is asking Congress to extend it again. Once that goes away, there’s a lot of people that are predicting a great big market crash. You can see all these market crash videos on YouTube. They’ve been coming out in force since 2017 then again in 2018, 2019, 2020 and even into this year predicting a housing market crash, the housing market crash. Well, eventually they’re going to be right, but I don’t think it’s going to be in 2021 or 2022.

Chart showing Mortgage forbearance timelines

The reason being, once the mortgage moratorium ends, there won’t be a huge amount of foreclosures 2009 recession style. A lot of people have gotten back to work now. The economy is improving and in good shape. Most people using the program are going to be able to pick up where they left off with their house payments. In most cases the missed payments will get tacked on to the end of their loan to be paid back when the house sells or is paid off.

Hopefully we’ll get some inventory out of the end of forbearance. No one wish’s anything bad on homeowners. We don’t want anybody to get foreclosed on, but there are going to be some people that are going to have some trouble. The housing market will more than likely see some foreclosures, which may bring the inventory levels up a little, help stabilize the market and ease the housing inventory crisis the country is currently experiencing.

What Should You Do Now?

So, if you’re thinking about or have thought about cashing in on the equity in your house now is a good time. If you do plan on selling to cash in on all that equity from these rapidly rising prices, make sure you have a plan. If your plan is to sell your house and then buy another house you may just be spinning your wheels.

Remember, it’s a great time for sellers, not so great for buyers. All that profit you make on your house will get eaten up with real estate commissions and the expensive house you buy. That’s OK if that’s your plan, just be aware.

I know there have been a lot of people that have sold their house because they just couldn’t turn down all that money from their equity. Many of those as aforementioned are renting now. But, rent prices have soared lately. Make sure you check rent prices in the area you want to live. If you do decide to rent keep in mind this housing inventory crisis won’t last forever.

Chart showing the dramatic uptick in rent prices

Right now your almost guaranteed a good, if not fantastic, price for your house because we are in such a strong sellers’ market. If you’re not quite ready to sell you probably still have some time.

What’s Next For Housing

Analysts are expecting home prices to rise 6% to 8% into the end of 2021 and into 2022. It doesn’t look like there will be any big changes in the next year or two. So you still have some time according to the nation’s economists. While we have a pretty dramatic housing inventory crisis right now it does seem to be improving slowly. Nobody realistically expects the bottom to fall out anytime soon.

This is not a bubble. What it is, is a simple case of supply and demand. Not enough supply. Too much demand. That is what caused this housing inventory crisis.

Make/Save Even More Money

Whatever selling decisions you decide on, make sure you sell your house yourself to avoid those expensive real estate commissions. I’ll show you how to sell your home fast and for the most money.

What’s Best, Rent VS Buy in 2021

by Joel Weihe

A Realtors Perspective

What’s going on in this crazy housing market? Prices are rising so fast many buyers are getting priced out or simply giving up. But that begs the question is it any less expensive to rent? Which is better, rent vs buy in 2021.

Many will argue there’s a great big bubble building in the housing market, and although for different reasons, it sure feels reminiscent of 2008/2009 when it all came crashing down. Prices were rising so fast back then that investors were buying homes and turning around and selling them immediately for massive profits.

While the 2008/2009 housing bubble was bad, this time around it’s a little different.

2008/2009 financial Crisis

The 2008/2009 financial crisis was caused by lax regulatory oversight and some shady banking loan practices. I won’t go into detail here but with everything going on back then it wasn’t sustainable. There was a true housing bubble and it popped in a big way flooding the market with foreclosures and short sales.

For a time after the financial crisis of 2008/2009 it was actually cheaper to buy a house than it was to rent. It took until 2016 for the market to recover just to where it was before the crash. Before that and for awhile after 2016 it was a better financial decision to rent vs buy where you live.

Rent Vs Buy After 2008/2009 Recession

When I first got into real estate in 2009 a great way to get business was to convince people that it was cheaper to buy a house then it was to rent. It was true. At that time rent vs buy favored buying.

I would send postcards to apartment complexes and put notices on bulletin boards with pull off phone number tabs. People would call me to find out more giving me a chance to show them how they could buy a house and pay less in mortgage than they were paying in rent. And it was working. A lot of homeowners were created that way.

That was a great strategy that worked for years all the way up to 2017 and even somewhat into 2018. It started to get a little rougher into 2018. You could still find good deals occasionally, but it was getting more difficult.

Supply vs Demand

The party is now over. 2019 saw some significant increases in housing prices and then, of course, in 2020 and into 2021 prices exploded exploded even higher.

According to Black Knight, which is a company that collects housing data, this is the 18^th consecutive month of home prices rising. They have increased 14.8 percent year over year. That’s the highest that housing prices have risen since Black Knight started keeping track in the in the mid 1990s. That means housing prices are rising even faster than leading up to the last recession.

If we all would have known this a year ago, we would have sunk all the money we had into real estate and sold it all today. We’d be rich!

Todays “housing bubble” is a little different. It’s happening because of a supply issue. There are not enough homes for sale to accommodate all the people that want to buy. The economic term is supply and demand. When there is not enough supply prices go up. More people competing for less product makes the product more valuable and able to be sold at a higher price.

The supply problem in the housing market is making it really difficult for buyers. Just about every house that comes on the market has multiple offers driving up prices. People are paying thousands of dollars over asking for a house and in many cases agreeing to pay over the appraised value.

This isn’t a bubble to pop. The only thing that will cool this overheated real estate market is more supply, or less demand. More homes for sale are desperately needed. While you can find any answer you want to hear by searching the internet many professional analysts see more increases in the near future, albeit not as steep. As long as consumers are willing to pay these prices they will continue to rise. At least until there are enough houses for everyone that wants one.

Rent Vs Buy

The average mortgage payment in America right now is $1487. The average rent in America is $1177.

The most expensive places to have a mortgage are Hawaii, California and New York, with an average of $1684. The cheapest places to have a mortgage are Iowa, Indiana and Arkansas, with an average mortgage payment of $978. With rent, the highest rent is in Hawaii, which didn’t surprise anybody at $1607 on average. The cheapest is West Virginia where you rent on average for $725.

So you can see that, everything else notwithstanding, it’s “cheaper” to rent.

Taking into consideration the benefits of owning a house like equity and getting to do what you want to it and the benefits of renting, like not having to take care of repairs and not having to worry about selling it may make a difference in the decision of rent vs buy.

Cashing Out For Equity

Is it a good time to cash out on your equity?

If you’ve been thinking about selling your house, now might be a good time to sell it to cash in on the equity that you’ve been building. Maybe you can rent for awhile until whatever is going to happen to this market happens. Something has to give. According to Black Knight, the current levels of home growth aren’t sustainable for an extended period of time.

So we’ve either got to stabilize this market or as a lot of youtubers have been predicting for the last five or six years, there’s going to be a market crash. They predicted a housing crash in 2017, 2018, 2019, 2020 and, of course, 2021, which still may happen but don’t hold your breath. Someday they’ll be right.

If you do decide to sell think it through and make sure you have plan. If you’re planning on selling and buying you could be spinning your wheels. It’s a great time to be a seller but not so much a buyer.

Rents are on the rise also. Be sure and research what the rents are in the area you would want to live.

To answer the rent vs buy question, overall right now, comparing dollar to dollar and monthly cash-flow it’s cheaper to rent.

Sell Your House Yourself

It’s always a good financial decision to sell your house yourself and save on those outrageous real estate commissions.