How to Sell Your Home Fast
Balancing Speed and Convenience for Maximum Profit
Selling a home can be an exciting yet challenging experience.
Many homeowners are looking for ways to expedite the selling process while minimizing stress and maximizing profits.
In this blog post, we will explore various factors to consider when selling your home fast, including the importance of speed, the trade-off between speed and price, the cost of convenience, and how to optimize your selling strategy.
What to Consider When You Want to Sell Your Home Fast
Potential Delays
When it comes to selling your home, determining your priorities is crucial. While speed may be a significant factor, it's important to assess whether it is the sole aspect that matters to you. Are you willing to compromise on price to achieve a faster sale?
It's essential to strike the right balance between speed and financial outcomes to ensure a satisfactory result.
Let's first discuss what causes delays in a real estate transaction. In a typical transaction, you will want to interview real estate agents, prepare the home for sale by making intelligent fix-ups, stage the home, bring in professional photographers, and hold an open house. This preparation process by itself can take several days or even several weeks, depending on your level of preparation.
Next, the home is listed on the market, where it is advertised to a large number of potential buyers and the agents who represent them. They will set appointments, tour the home, and submit offers. This stage can take several days (in a hot market) or potentially several weeks if it's a slower market, if your property is overpriced, or if there are issues with the property.
Next, you will negotiate with one or more buyers and execute a purchase agreement. In a multiple-offer situation, it may take several more days of back-and-forth before a contract is signed and an offer is accepted.
At this point in the process, you could be several weeks or more into the entire process, and you're just starting to open escrow. During the escrow process (typically 15-30 days), the buyer will conduct inspections, work with their lender to get the loan approved, and schedule an appraiser to evaluate the property.
This is where delays can occur. If there are issues with the inspection, loan approval, or appraisal, there may be additional inspections, a new lender brought in, or appraisal disputes, further delaying the process.
By the time you're done and the home is sold, it's possible that you have spent anywhere from 45-90 days talking to agents, preparing the home, marketing the home, negotiating with buyers, and navigating through the escrow process.
This is not the fast home sale you were looking for. Is there a faster way? Yes, there is!
Selling to a Cash Buyer
Selling the home to a cash buyer can be a way to sell your home fast.
When you engage with a cash buyer, it's pretty simple. You call them over, they do a quick walkthrough of the home, and write you an as-is offer. There is no prep work, no marketing, no negotiating. You can go from 0 to sold in 24-48 hours. The escrow process with a cash buyer is also quite different.
When escrow opens, you, as the seller, are required to provide certain disclosures to any buyer, even cash buyers. The process of delivering the disclosures, the buyer reviewing the title report (which is done to identify any potential issues that could affect the buyer's ownership rights or the marketability of the property), filling out the escrow company paperwork, and wiring funds to close typically takes no more than 7-10 days.
Selling to a cash buyer can decrease your timeline from between 30-90 days to as fast as 5-10 days! Wow! What a brilliant idea. Why wouldn't everyone just sell their home fast to a cash buyer?
Well, as the saying goes, there are pros and cons to everything.
Cash buyers can significantly expedite the selling process. These individuals or investors have the funds readily available, eliminating the need for mortgage financing. Consequently, there are no lender requirements or potential financing-related delays. While cash buyers often expect a discounted price, the convenience of a swift transaction may outweigh the price reduction. Non-cash buyers may require more time to secure financing, potentially extending the sales timeline.
Selling a home quickly to a cash buyer often comes at a steep cost, which is usually reflected in the sale price. Buyers who are looking for a quick purchase may expect a discount or negotiate aggressively. This is because, in exchange for speed, the buyer is not conducting any inspections, making it a much riskier transaction compared to a buyer who takes their time to thoroughly inspect the property. In exchange for this risk, there is usually an expected reward in the form of a lower purchase price, resulting in less money for you as the seller.
How much less, you ask? In my experience, homes that sell to investors are typically discounted between 18% - 30% off the market value. A seller at the median home price of about $850,000 would be walking away with $153,000 to $255,000 less! So as you can see, the cost of convenience is not cheap. In this case, it amounts to six figures!
On the other hand, if you have the luxury of time, you may be able to hold out for a higher sale price. Why? Because the price of any asset is determined by supply and demand. If you are seeking a quick sale, you need a cash buyer to avoid the delays caused by lender processing and appraisal. However, according to NAR, only 28% of home sales are all-cash. Thus, by seeking cash buyers only, you are eliminating 72% of your potential buyer pool. And with such limited demand, the sales price plummets. Moreover, by taking the time to prepare the property for sale and making intelligent fix-ups that make it attractive to buyers, you will increase the demand for the property, thus increasing your bottom line.
Additionally, by properly marketing the home, you are not only marketing to the buyers but also to the agents who work with buyers. Considering that 89% of buyers used an agent to purchase their home, you will want to drive further demand by advertising the home in the proper channels that attract buyers' agents. When you sell to a cash buyer, this step is skipped, lowering the demand and ultimately the sales price of the home.
The Cost of Convenience
Opting for a fast home sale often involves convenience, but it's crucial to understand the associated costs.
Homebuyers who can offer this speed and hassle-free sale typically look for deep discounts at the seller's expense. Even though many cash buyers will advertise "no fees or commissions" when you sell your home to them, sellers still end up with much less in their pocket at closing, even after "saving" on costs like title insurance and escrow fees.
Consider whether investing in minor renovations or staging can enhance your home's appeal and help justify a higher asking price. Weigh these costs against the convenience of a quick sale to ensure you make a financially sound decision.
Weighing Your Priorities
If Speed is Your Priority…
If time is of the essence, there are steps you can take to expedite the selling process and still maximize your price.
Identifying and addressing potential delays is crucial. Delays often arise from issues such as financing complications, inspection and appraisal contingencies, or slow buyer response times. To avoid these bottlenecks, consider working with a real estate agent experienced in fast sales who can proactively manage the process on your behalf. There are plenty of things the agent can do to get out ahead of any potential issues including vetting the lender, reviewing their approval qualifications, structuring the contract in a way that entices the buyer’s speed, and even knowing how to vet the agent and lender the buyer is working with.
If You Can Compromise on Speed and Go the Traditional Route…
While a quick sale may seem appealing, it's essential to evaluate the benefits of going the traditional route. This approach involves listing your home on the market, allowing for a wider pool of potential buyers. By marketing your property to a larger audience, you increase the chances of receiving competitive offers and achieving a higher sale price.
Marketing the Home to the Highest Number of Buyers
To maximize exposure and attract a larger pool of potential buyers, effective marketing is key. Utilize both online and offline channels, including professional photography, virtual tours, social media platforms, and real estate listing websites. Working with a skilled real estate agent can also leverage their expertise in reaching the right target audience and highlighting your home's unique features.
Understanding Supply and Demand
Understanding the current supply and demand dynamics in your local real estate market is essential.
A seller's market (where demand exceeds supply) can favor a faster sale and potentially result in multiple offers and maximize your bottom line without sacrificing price by selling to a cash buyer. However, in a buyer's market with a surplus of inventory, achieving a quick sale may require additional strategies such as competitive pricing or unique selling propositions to stand out from the competition.
As always, it’s important to know what’s important to you and work with an agent that is focused on helping YOU reach YOUR goals and get you a deal that works for YOU.
That’s it for me today, guys — see you in my next one! 👋🏼
Brent Edwards (aka Brent the Broker) is a residential real estate agent and Realtor in San Diego, CA who helps clients buy and sell homes in San Diego, California and all surrounding areas. Brent is a highly-recommended Realtor in San Diego by family, friends and past clients. Call Brent today at 619-550-8070 if you have any questions about real estate in San Diego or you'd like to buy or sell a home.
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