You want to buy or sell a home in Denver? The first place most people look is wherever they can find a real estate agent to guide them through the process.
A great realtor takes on most of the tasky projects involved in listing a home. Of course, they won’t come in and clean, but they usually find all the dust bunnies the homeowner misses. They do, however, take care of putting contracts, marketing, showing, and helping organize the closing.
Real estate agents are amazing people, yet not all home buyers and sellers choose to hire them. The private sale transaction is growing in popularity. If you’re curious, here are a few of the benefits of choosing the private sale method of buying or selling a home in Denver.
What Is a Private Sale?
The term private sale sounds a little mysterious, doesn’t it? Maybe you have an image of a buyer showing up with a briefcase full of cash and exchanging it on the sly for the deed of a home.
While that makes for an intriguing movie script, it’s not how a private real estate transaction works.
A private real estate purchase simply means the buyer and seller come together without the help of a traditional real estate agent. There’s no realtor to draw up contracts, show the home, negotiate offers, and make the other arrangements that go into the sale of a home.
Private real estate sales happen every day and both parties can enjoy the benefits.
Who Doesn’t Want to Save a Little Money?
When you consider the cost of selling (or buying) a home, it’s natural to look for as many ways to save money on the transaction as possible.
If you’re the seller, you bear the burden of paying a listing fee to your real estate agent. While those fees are often negotiable, the average listing fee is 6%. The fee goes to the seller’s agent, who shares a portion of it with the buyer’s agent.
By going with the private transaction method, a seller can save the 6% fee and, in theory, passes the savings on to the buyer.
How does that work? Usually, the seller works the realtor’s fees into the listing price of the home. If they don’t have listing fees to pay, a seller may lower the asking price by the same percentage.
Even if the seller doesn’t lower the list price, they may leave room for wider negotiations. This is where the buyer can save a nice chunk of money.
Name Your Price
If you’ve ever sold a home and worked with an agent, you trusted the agent to put together a comparative market analysis (CMA) for your home. Using the CMA, the realtor suggested a listing price. Pay attention to the word suggested.
It’s not uncommon for a seller to feel complete discouragement when their realtor tells them what they think the home will sell for—it’s often not as high as they’d hoped. What sellers forget is that this is only a suggestion. It’s usually an educated suggestion, but a suggestion none-the-less.
The homeowner still has the final word when it comes to the listing price. The agent discusses the reasons they came up with their suggested price. The seller weighs everything and decides whether they’ll go with their agent’s advice, or determine their own price.
The frustration comes when the agent pushes back. An agent wants to sell the home as badly as the seller does, and it’s a no-brainer as to why. Real estate agents make their income from closed, not pending, home sales.
The suggested listing price is calculated based on what they believe the home will sell for in the least amount of time.
Sell the home yourself and you have total freedom to ask what you want for your home. No push back involved (at least not from a seller’s agent). You also have control over the marketing of your home.
Welcome to My Beautiful Home
Another thing you’re familiar with if you’ve ever sold or bought a home is the showing.
Real estate agents arrange for showings when their clients are available. Sure, you can always let your agent know if a certain time isn’t convenient, but you may lose out on a few prospective buyers viewing your home.
When you act as your own agent, you set the times/days when you want to show your home.
Another thing that’s somewhat unsettling to sellers is that they can’t be around when an agent shows their home. It’s not a hard-fast real estate rule, but most agents prefer the seller to disappear while they bring their client for a showing.
With a private sale, you show your home! This means you greet the prospective buyer at the door and you give them the grand tour.
The benefit of this is you can point out your favorite things about your home. You have a chance to share any improvements you’ve made. You talk about your home with an enthusiasm most real estate agents can’t.
It’s not all their fault! After all, they haven’t lived in your home. A seller can often make even the negatives of a home seem a little less negative.
The Seller Plays the Role of PR Person
In the world of traditional real estate transactions, the seller’s agent takes care of marketing the home. They list the home on all available real estate websites, including the Multiple Listing Service (MLS) if their office subscribes to it. They also act as the public relations person for the home and talk it up to their colleagues and clients.
When you take advantage of selling a home privately, the seller takes on the role of PR personality.
One of the biggest benefits of marketing your own home is that you only have your home on your mind. An agent is often juggling multiple home sales, showings, and closings. It’s always possible for a home to get lost in the shuffle.
If you have time, energy, and creativity, why not use all those things as part of your DIY toolkit?
You also have a friend in technology. The internet changes the playing field for homebuyers and sellers. You don’t necessarily need an agent’s access to online listing sites since now you can find plenty tailored to private sellers.
The Legal Side of a Private Sale
One thing you can’t avoid when handling a private home sale in the legal piece(s). Home sales, whether done privately or through an agent, come with a stack of documents and certain laws and regulations. If not followed correctly, you may find yourself in trouble at the closing table.
Both parties should consider hiring a real estate attorney. This protects both the seller and the buyer. It also puts an experienced set of eyes on the many pieces of paper required for the deal to close.
While not exactly a surprising benefit, knowing you’ve hired a professional gives both parties the advantage of knowing they’re equally protected under the law.
As the seller, when you’re comfortable that you have an excellent lawyer, you’ll feel confident meeting at closing and delivering the keys to your buyer.
The buyer, working with the right attorney, feels confident they’ve made the best buying decision. Now, they can move into their new home free from worrying about the buying process.
The Advantage of Seller Financing
Most people think of seller financing as a benefit for the buyer. And it certainly is, especially if the buyer isn’t qualified for financing through a bank or mortgage company.
If you’re the seller, you can enjoy certain benefits too!
Maybe you don’t need 100% of the proceeds from the sale of your home right away. If so, then consider offering seller financing to your qualified buyer. By qualified, we mean a buyer who can prove their ability to pay back their loan.
The obvious benefit to the seller, in this case, is you won’t lose the sale. You may also come closer to getting your asking price.
Finally, you can usually close more quickly because you won’t wait the standard 30-60 days for a mortgage company to underwrite a loan and approve closing. You vet the buyer, sign your private loan documents, and turn over the keys with the agreed-upon terms.
Ready to Sell Your Home?
Hopefully, you feel like you understand a few of the benefits enjoyed by sellers who choose to handle the home sale without the help of a real estate agent. Of course, this doesn’t mean you refuse all professional help.
One area you should consider asking for help with is listing your home. In addition to a private sale, you also have the option of listing with a broker who works on a flat fee basis.
If you’re curious about how working with a real estate company that doesn’t require the standard commission percentages, we’d love to talk with you. Contact us today and let us show how we can help you sell your home.