Breaking down a typical residential real estate transaction into its most basic components is pretty simple. Once you do, you begin to see that there is generally nothing complicated about them. After all you have a piece of real estate (land) that is either developed or not, with or without a house.
When selling, you have the Seller and a possible buyer. At the point that they can agree on a price and the terms of the sale you have the transaction that is codified into a purchase and sale agreement. That agreement can be written on a napkin or take the form of a 15 page document that attempts to contemplate every possible condition agreed to by the seller and buyer. The more terms and conditions the more complicated the transaction and as a result the likelihood that it “may” take more time to put everything together for the eventual closing at the title company.
So what is it about finding the right buyer that makes selling so difficult? Why is it that nearly 40% of all real estate listings expire without a sale? Why is it that less than 5% of the 3563 real estate agents in Stockton do 95% of the work? The technical answer is the Marketing, but the real answer is that most homeowners don’t know how to find a buyer for their house and so they typically hand that responsibility over to a real estate agent. Most Sellers never even consider the cost or the pitfalls. They merely follow the conventional wisdom of the day and race to signing a listing agreement. Too Bad… its costly and by and large, the rank and file real estate agents have no more real skills than you do when it comes to selling a house.
Most sellers never even look at the numbers in real estate because there is no one talking about them. As a local real estate investor in Stockton, I see the good, the bad and the ugly. It manifests itself in so many ways. Houses go on the markets. They sit. The price gets reduced and pretty soon the sellers start spending thousands to chase a number that will retain their equity. Its is a gamble that a lot of them take and at the end of the day had they just sold for cash without all of the repairs and upgrades they would have spend far less and put more money back in their pockets at closing. Most real estate investors that are also rehabbers know the numbers. We have to . We are meticulous about the numbers, it is our business and livelihood. As General contractors we would never recommend the types of changes that are recommended by real estate agents that dont know anything about the cost associated with fixing and selling. They dont care… it is not their money. They just want the seller to spend as much as they are willing to get the house sold. Here is a tip. Houses that need work sell if they are marketed to the right people…
So what is it about the sale of a house that drives most sellers and buyers crazy? Why is it that some houses sell within 180 days and others in 7? As the seller do you have any control of the process or the time frame? The answer to all of these questions and more are answered more by your actions and expectations than anything else and the sale of any house can actually be as simple as you allow.
The Decision and Time it Takes to Sell Your House in Stockton
I tell people all of the time that “the cost of time is the biggest thief in real estate”. Let’s start with the basics. It is the time, the money and what appears to be the enormity of the process that scares most sellers!!! It should. The whole of the real estate industry has convoluted the process of selling any house to such an extent that it is almost institutionalized with mind numb robots that have no ability to think outside the box. They are programmed by the system that they have created to think that everything takes 45 to 90 days.
Why? Because the majority of the real estate agents are part timers anyway.
“I tell people all of the time that the cost of time is the biggest thief in real estate” Peter Westbrook 2020
Most people, just remember their own home buying experience and for whatever reason can’t imagine something less time consuming or complex. Let’s face it, home buying and selling is a grueling process by design. At every step there is at least another person added to the transaction that by design, will either hinder or advance the process. When you take into account the house, the listing, the clean up, the construction, the inspections, appraisals, repairs, allowances, credits, warranties, contingencies and counter offers, there is always the chance the sale may fall apart and we haven’t even mentioned the financing.
I think everyone would agree that all things being equal, most sellers want to sell their house by spending the least amount of money as possible while at the same time put the most amount of money back into their pockets at closing.
So, could it be, that the way most homeowners approach selling their house is actually out of sync with their objectives?
I believe that it is and it’s precisely because most sellers never never fully explore the the 3 options of selling their house or build a solid plan to sell it at all? I am not sure that most sellers fully understand what they are contemplating when they review their options and it may be that the advice that they are receiving from all of the self interested people is just flawed. It may be that there was just NO compelling reason offered to the homeowners to alter their decision. After all, what do you do when you’re unable to differentiate from one option to another? You choose the path of least resistance and make your best choice.
That is precisely what I have discovered. After talking to thousands of sellers, most, tend to follow the conventional wisdom of the day and hire the first real estate agent that they talk to. Sure, its a knee jerk reaction but it is perceived as safe. It is the way things have always been done. It isn’t necessarily a recipe for success but in most circumstances, especially for houses that are in need of a lot of repairs, most homeowners don’t really know what to do and so how are they to know that the safest perceived choice may not be the best choice at all.
There are really only three choices that you have when selling a house… 1) you can sell it as is, 2) you can spend thousands on just fixing the basics and making it presentable, or 3) you can fix and update everything and try to sell it for the highest possible price? Therein lies the rub, because most sellers tend to overthink the basic question of selling and believe that they are three distinctly different choices and that getting to the top of the market is easy in a sellers market. Most of the time they are fed that nonsense by inexperienced real estate agents that just have no clue what it takes to get to top of market. What most sellers dont know is that their real estate agent really aren’t qualified to offer those kinds of construction or financial opinions.
The Trick is Finding a Buyer That Wants to Buy Your House As is
So what happens that typically convolutes and complicates the process for ALL Sellers? The answer is really simple and yet most sellers have a hard time putting their finger on it. As for me, I know that it is always the people. It is pretty ironic that the act of hiring a single real estate agent has a snowball effect that grows the scope and complexity of every sale by a factor of 10 because it means that the real estate agent is going to find buyers that need financing and that one act means more people and more processes and more time that ultimately will cost more money. What can I say it’s true?
But the whole marketing machine of the real estate industry has done a great job in scaring homeowners into believing they should not go it alone… Most sellers have a genuine lack of trust in the process that causes most sellers to just want to eliminate the stress by handing it off to someone else. The problem with that is that for 72% of sellers they pick the very FIRST real estate agent that they talk to and more often than not they are even less qualified than the seller to navigate the process.
In my experience, it’s always the intangibles that drive most buyers and sellers crazy. It is also the inclusion of so many conditions that then require the performance of other people that make things so complicated. At the basic level you will always have the seller, the buyer and the title company. Everything else is optional and unfortunately most sellers just dont understand that.
There are a lot of things to consider when placing your home for sale. How long will your home be on the market waiting for a qualified buyer? What shape is my home in, and how much will needed repairs cost? Will the buyer find something wrong with the house after closing and potentially sue? Can I afford the commission if I deal with a Realtor? Call us at (209)481-7780 to find out additional questions to ask yourself before deciding to sell.
Be Careful What You Wish For…. It May Just Bite You in The Ass
Cash home buyers in Stockton will usually purchase homes as-is. As a seller, this means you do not have to worry about repairs before closing or any other additional expenses you were not planning on. There are some companies that do not require inspections which makes it a truly as-is transaction.
Fast and Easy Closings
Professional home buyers in Stockton, typically close faster than traditional home buyers, and usually in pay full in cash. Traditional home purchases usually require qualifications from banks, mortgage underwriting time, property inspection time and the buyer may not end up qualifying in the end. There are also normally no commissions paid to a buyer’s or seller’s agent which means thousands of dollars in savings. The usual commission is 3% per side, so if you sell your home for $200,000, you would have to pay $12,000 in commissions alone! Professional home buyers also may not charge transaction fees; if they do, they are extremely low in comparison to the commission or closing costs you would have to pay otherwise. They also provide mail-away closings which is a wonderful thing for out of state owners.
Professional home buyers are in it for the investment. They are not expecting to move into the home on the day of closing. Most home buyers will allow a move-out timeframe after closing to allow you to relocate at your own pace. This is extremely helpful, especially with such quick closing timeframes. Also, you may not even have to clean the home when you leave. You can simply pack your personal items and furniture you want to keep and leave the rest.
When you decide to use a professional home buyer in Stockton, you will not have to worry about going through a roller coaster of emotions. There are no frustrating, middle-of-dinner phone calls asking if you are available to show your home. You don’t have to worry about leaving your home spotless every day before heading to work, just in case there is a showing while you’re gone. You don’t have to worry about possibly running into a buyer’s agent or their clients or dealing with them asking you questions that you really shouldn’t answer anyway. You also don’t have to worry about buyers arguing with you over which furniture you are taking and what you are leaving.
Selling to a professional home buyer is straight forward. They will lay out every step of the process and usually have shortened, very clear contracts that are simple as-is purchase agreements. You will also have lessened exposure to legal risks. You won’t have to worry about the buyer finding something you didn’t know you didn’t disclose or something they don’t like about the home or the neighborhood. Under most traditional real estate contracts, there is a potential for the buyer to sue you if they feel they didn’t get all of the information, or if they feel the facts were misconstrued. Professional home buyers already know the state of the property, and they are willing to take on that risk.