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Can’t Afford to Sell Their House

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Can't afford to sell their house. Homes for sale on percentage basis. There is a banner across the picture of townhomes that reads %% Sale%%.

Photo by Benedikt Geyer on Unsplash

Well, it’s happened again. A past client can’t afford to sell their house and they can’t afford to keep it. At least they don’t think they can but I will show them how to sell it on their own and save money.

To many times I run into or hear of people whom for whatever reason have to sell a house shortly after they bought it. By shortly I mean anytime within a year or two maybe three.

Theoretically the longer you live in a house the better the investment it is. Time gives the real estate time to appreciate and you to build equity by paying down, or paying off, the mortgage.

When someone has to move after only owning it a short time they really can’t afford to sell their house. Sometimes they can’t afford to keep it either. It can put families in a bad place.

Can’t Afford to Keep Their House

In this situation a young family wanted to live in a neighborhood for the schools. The area also held a certain prestige. They found a house they loved, went through the loan process, closed on the property and moved in.

A little over a year later they contacted me and indicated that they had bitten off a little more than they could chew. The house was eating up to much of their money. Once the mortgage and bills were paid they were left with very little disposable income.

They came to me for help selling the place. We went over the numbers and what it would cost to list the house with me. Even with charging the very minimum and having to pay a buyers agent they would have had to bring money to closing. They would have been in the red which means that the real estate commissions would have to be paid out of pocket. Thousands of dollars they didn’t have.

I asked them what I ask everyone that asks me about listing their house. “Have you ever thought about selling your house yourself?” And I got the same answer I usually get, no. Even if a home seller isn’t “in the red” it still makes since to save thousands of dollars selling themselves. Sell the house without hiring a real estate agent.

They didn’t make a decision at that meeting. I offered to help by giving them our free home selling guide. They took it and said they would think it over.

This particular story is to be continued…

You Can Do This

It’s really not that difficult to sell your house yourself. Real estate agents don’t have to put forth much effort once they have the business. If a house is in good condition, properly made ready for market and priced right it will sell. I can tell you how to sell a house. You can find that information easily.

What excites me is teaching people how to squeeze every last dime out of their For Sale By Owner. How to create multiple offers and get thousands more dollars. How to get buyers really excited about buying your house. Literally fighting over it. Making more money for you. That’s what excites me. Because I know it’s possible.

The Truth Behind the Success of FSBO’s

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Easily sell your home yourselfFor Sale By Owner, Try It

I am a licensed real estate agent in the state of Kansas. Personally I believe a homeowner can easily sell their home themselves, or sell their home FSBO (For Sale By Owner). What do you think? The real estate industry would have you believe it’s damn near impossible. The stats for successful for sale by owners according to the real industry are around 8%. That seems low. What is the truth behind the success of FSBO’s.

First, way back in 1981, before we had the internet in our homes, the percentage of successful FSBO’s was 21%. That’s very believable and I would expect that the number in 2018 would be even higher. But it’s lower? That doesn’t make any sense. It’s so much easier to sell a house these days. In fact, if priced right and properly prepared for market, homes are selling themselves. Literally!

What I mean by that is with all the real estate sites that are available for public use FSBO’s should be easier than ever to market, right? Well, they are, trust me on this one.

Consumers get online these days to look for homes themselves on sites like Zillow, Trulia, and homes.com just to name a few. Home sellers can go directly to these sites and market their homes themselves. In fact a lot of Realtors do just that trying to avoid paying commissions to other agents, go figure.

Home buyers are often shopping before they approach a real estate agent for assitance. Many of my clients prefer to look at homes themselves and then send them to me. Yes, I know it sounds backwards but it’s what’s happening. Consumers are shopping online for homes on their own. Real estate agents are useful for unlocking doors and filling out paperwork.

So where do these numbers about successful FSBO’s come from.

It’s actually a very slick play on semantics, and not dishonest. The industry grabs the numbers by only counting homes that have been sold by owners with absolutely no help or involvement from a real estate agent.

What I mean is…

  • Some FSBO’s end up using a buyers agent because the buyer had a contract or “agency agreement” with a brokerage. (More on that in a future post, and it’s not nice) Those sellers still sold the house themselves. They attracted a buyer, the buyer viewed the property, liked it and wrote an offer. Those sellers still saved thousands of dollars in commissions but in fact ended up having someone to do all the contract and closing work for half the price.
  • Sellers sometimes want to get their listing on the Multiple Listing Service (MLS) and there are services now that will do that for a few hundred dollars. Yes, the same thing you may pay another agent several thousand dollars for. The industry does not consider those FSBO’s. But who cares about semantics right? We care about saving money and putting it to better use.
  • What if you used a Realtor to help you price your house? You know, interview a Realtor, or two,  with the assumption that you might list with them so they give you a price analysis? Or what if you called up a Realtor and got some free advice? Would that be considered a true FSBO?  Again, who cares. It’s still a For Sale By Owner and you still saved thousands of dollars.

Those low numbers are thrown out there without an explanation for a reason. To scare you. To make you think twice. To stop you.

Don’t be fooled. It’s really not that difficult to sell a house once you know how.

Joel

p.s. If you have questions about the process you can join the discussion at  fb DIY Real Estate group

p.p.s.  For an in depth complete guide to learning how to sell your home yourself and get the most possible money click here!

How Disruption Will Happen in Real Estate

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How disruption will happen in real estate and how it will save you money. Disruption is the catchphrase of the times.  The word itself has almost run it’s course and is hardly relevant anymore.

The world is changing so fast that’s it’s not so much disruption as simply massive inevitable  change. Change in the ride share business-Uber replacing taxis. Change in where we sleep when vacationing-AirB&B replacing hotels. Change in how we watch movies-Netflix replacing the video store. Change in real estate business-Artificial intelligence  replacing real estate agents.

Disruption in real estate -Uber

It’s going to happen. The real estate business is going to change radically. No one knows yet what that change is going to be but it is happening now. Investors are investing hundreds of millions of dollars in startups trying to do just that. To disrupt the real estate business.

Agents are becoming irrelevant. The general public hasn’t caught on yet in masse. But they will. Homeowners are starting to wonder what they get for their money. Those huge commissions they pay when buyers are finding homes online on their own.

The problem with the startups trying to dislodge real estate agents is they still cost consumers money. Still quite bit of money. Some are trying to make it “easier” to sell  home but still relatively expensive. Others have adopted the buy low sell high technique but that doesn’t make much sense for consumers. What does make sense is for someone selling their home keeping their money and actually making a profit.

An agents marketing these days consist of putting homes online, where consumers are looking. A task that can easily be performed by just about anyone . Seriously, it’s not rocket science.

While all these slick expensive startups are searching for the magic bullet I believe disruption will come from the source, the consumer. The guy selling his house figuring out he can do it himself and save thousands of dollars. I believe that’s how disruption in the real estate industry will occur. When the general public figures out how they can easily sell their homes themselves.

Find out how you can easily sell your home yourself.

Joel

 

 

Why I Teach People to Sell Their Home Themselves and Avoid Paying Commissions

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People ask me all the time why I teach people to sell their home themselves. One reason is I work with a lot of military families helping them to find and purchase real estate. The first thing I want to know is does this make sense for you at this time. How long are you planning to be here? Can afford to pay real estate commissions if you have to move?

Military families move a lot. I know because I grew up in a military family and we were always moving, or so it seemed. We never spent more than a few years in any one place.

Moving
family moving house

If someone is only going to be in a place for two years it doesn’t make sense to buy a house. They will likely have to pay to sell their home when the time comes to move. Yes, pay…to sell their home. Literally have to bring money to closing instead of leaving the closing table with a check. Imagine you just 2 years before bought your first home, paid your own closing costs of $4200, put in new floors for $3500 as soon as you moved in and now you have to sell.

You barely have built up any equity in the house and certainly not enough to pay $18,000 in real estate commissions. You have to make up the difference in real estate fees out of pocket.

Let me explain how that happens when you don’t or can’t live in one place long enough.

When you buy a house there is very little cost involved in the real estate transaction itself. When you go to sell your home that’s where the transaction fees (real estate commissions) get paid by the seller, you. It’s not legal to fix those transaction fees where I live but they are generally 6% of the contract price. That can get expensive. If one doesn’t have enough equity built up they will have to bring money to closing to sell their house.

So my client tells me the Air Force says they are keeping him here for 7 years. Great, that’s plenty of time to buy a house, make it a home and if the economy stays intact probably come out a little ahead when it’s time to sell. A year and a half later the same client calls me and says the Air Force changed its mind and they have orders to ship out. Can I please help them sell the house. One and half years is not enough time to build equity to pay those outrageous transaction fees. Especially with government backed loans like FHA or VA that require little or no down payment. Little or down payment equals little or no equity.

Please notice I call them transaction fees rather than what they are. Real estate commissions. Transaction fees comes off a lot softer. And yes, I get paid those outrageous fees when someone doesn’t know how or is scared to sell there house for sale by owner.

And it’s not just Military either. Sometimes bad things happen to good people and they get jammed up. People lose jobs, get sick, get job transfers or just are forced for whatever reason to give up their home through no fault of their own. If this family owns a $300,000 house the fees are going to be in excess of $18,000. That’s a lot of money. 

That’s why I teach people to sell their home themselves.

You can easily sell your home yourself and keep your money.

I Just Want to Get Out From Underneath This House

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This morning was a “I just want to get out from underneath this house” morning. It was a listing appointment, the kind that is dreaded. When going to a listing appointment an agent never knows what to expect. For me there is always a certain amount of trepidation.

Old run down house
House that needs work before selling

Sometimes as you pull up to the house you can tell right away. This is going to be a terrible experience. To be fair often I’m wrong but today I wasn’t.

Sometimes a house in pristine condition, the kind we love because it makes our job so easy. When a house is clean, in good repair, freshly painted and so on we have very little to do but come up with a fair market value price. Then it is list and forget it, because it will sell pretty much on it’s own merits. That of course is the best because it only takes a couple hours work with a return of many thousands of dollars.

Sometimes a house is a disaster, as was the case this morning. And sometimes we hear I don’t want to do anything to it, I just want to get out from underneath this house. Which is fine but sometimes the house is in such a condition, and so much is still owed the bank, and so much work is needed, that they won’t be able to get out with their skin.

My job now is to convince them that a little work, sometimes a lot of work, is needed to get where you want to be in price. I have found that when I can get a seller started on, or at least agreeing to, some work on the house we can end up with a much better bottom line. If they get some momentum going I can even convince them to go farther and make a profit.

You can easily do all this yourself.

If you’re familiar with this site you know where I’m going. You do not need me to tell you this. I’m not some magician that will come in, wave a magic wand and make it all better. I will simply tell you what needs to be done which these homeowners must certainly already know. You still have to do the work on your own. We don’t do labor, we just sell your house. You can easily do that yourself.

If your home is already in perfect condition why pay me thousands of dollars to “list” it for you? I will but you can easily sell it yourself. Simply get your house in order, collect the proper forms and save yourself a lot of money.

 

 

I Have A Buyer For Your House

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When you list your For Sale By Owner you’ll get calls from real estate agents wanting to list your home.  They may tell you “I have a buyer for your house”. If you list with me I have buyers looking for a house like yours. If that’s true, that’s great but…

DIY For sale By Owner
for sale by owner real estate sign

 

I’m writing this because one of my agents ran into this exact situation recently. A friend  had his house on the market with a different agent. When she found this out she called her friend to find out “what’s up, why didn’t you call me when you decided to sell your house”. Because another agent convinced him he had a buyer in pocket that was interested in the house.

Interested in the house but not ready to write an offer and furthermore that buyer never materialized. And the agent got the listing. The point of this post is to let you know, or remind you, you don’t have to have a listing agreement to write a contract with an agent. You don’t have to have a listing agreement to write a contract with an agent. Did you get that. Don’t let them convince you do.  You will probably have to sign a commission document but that’s OK. If the agent brings a buyer they should get paid, only one side.

The industry has done a fantastic job of making the public believe you can’t sell your house on your own. Agents have all the language and all the reasons to make you list with them. Your For Sale By Owner is a threat to our business. If the general public ever realized how easy it is to do this on your own. Seriously, it’s not that difficult to sell your home on your own. We are showing you how it’s done.

By preparing your home properly, pricing it right and marketing efficiently you will sell your home for top dollar in a short amount of time and save thousands and thousands of dollars.

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