Advice on selling a house

m741 · Post by **m741** » Sun Feb 17, 2013 3:41 am

I inherited a house and I'm looking to sell it.
The situation right now is that I have talked to two realtors, but haven't committed just yet.
I would list the house at $320k. I'd give 30% odds of selling at that price, 50% at 310k and 100% at 300k. Then there are closing costs (estimated $2k), and minor repairs before selling (estimated at $1-2k). Listing via broker would incur fees of ~6%.
Let's say, selling price would average 310, which ends up clearing $310k*.94-2k-2k = $287k. If it sold for 300k, I would clear 278k.
There's someone interested right now in buying without going through the listing process. Basically there would be a single realtor representing both buyer and seller, who would charge 1% to each, a 4% savings over listing. Furthermore, this buyer is suggesting that he cover closing costs and the 1% broker fee I would be charged, a value of roughly 5k.
This sounds promising, and the added benefit is that the house would not sit on the market, accruing maintenance and so forth. However, following a less conventional process for this does make me nervous.
I guess I'm wondering two things: are there any things I should be careful of here? Ideally, I just want to walk away from the house and not have to worry about anything. Second, if I reverse the formula for this buyer, an offer of $280 in this situation would seem to be equivalent to selling at $302:
280*1.06+5 = 302
With the caveat that I've only reduced the brokers fee by 1% rather than the full 6%. Am I missing anything comparing the broker versus non-broker equations?

secretwealth · Post by **secretwealth** » Sun Feb 17, 2013 6:27 am

If you already have a buyer interested, there's no reason to get a realtor--they are very overpaid and do very little (disclaimer: I used to be a realtor long, long ago). If you have someone interested in buying, you can handle the sales contract and escrow on your own, or go with just your lawyer if the state uses lawyers instead of an escrow company.
Realtors say that their value is in listing your property on the MLS (thus giving it maximum exposure) and helping you negotiate the best price for your house. Most everything else from the seller's perspective--insuring that the buyer qualifies, not wasting time by getting earnest money, etc.--can all be done pretty easily without a Realtor.

chenda · Post by **chenda** » Sun Feb 17, 2013 11:10 am

I work as an agent and inclined to agree with secret wealth; if your looking for a quick sale and as long as you don't mind direct negotiations with this buyer, the agent is probably not needed. Just agree a price and hand it direct to the lawyers. You might want to ask the buyer to provide proof of financing as you don't want the deal to fall through at the last minute with no one else lined up to buy.
In my experience, agents are not really interested in maximising the sale price, I make more commission from quantity of sales rather than maximising the sale price.

secretwealth · Post by **secretwealth** » Sun Feb 17, 2013 5:24 pm

"In my experience, agents are not really interested in maximising the sale price, I make more commission from quantity of sales rather than maximising the sale price."
Yep, that's been my experience too. I think the only value of using an agent is the MLS, which can be considerable--but completely unnecessary in your situation.

JohnnyH · Post by **JohnnyH** » Sun Feb 17, 2013 6:05 pm

Is the house occupied?... If you're getting utility out of it by living there, or it is being rented, then I think you have ample time to try alternative methods of sale.
If it's vacant I would want to either sell it or occupy it quickly. Also, make certain you are insured if it is vacant as I've had roughly half of my rentals get molested in some way when they were unoccupied.

Jen10 · Post by **Jen10** » Mon Feb 18, 2013 3:47 pm

We sold our house using a discount broker ($150 to list on the MLS) and then the normal fee to the buyer's broker (or a discount of the same amount to the buyer without a broker). It worked out great for us but I would be careful going forward without one if you have never been involved in a real estate deal before and enlist a good real estate attorney or someone else to help you. For example, if there are negotiations about prorated property taxes, it would help to know what is typically done.
It sounds like you have already gotten a comparative market analysis from a couple of realtors, which is good. Be aware though that some realtors might be very optimistic about what a property will bring because they want your business and then will reduce the price later. Meaning that the amount quoted may not be that close to what it would actually sell or appraise for.

m741 · Post by **m741** » Mon Feb 18, 2013 8:41 pm

Thanks everyone for the advice. The offer I received was pretty reasonable - it ends up being roughly what I would have sold the house for anyway. I think it's worth it rather than continue to hold onto a house that's across the country from where I live. I end up making 1% more based on not going through the usual broker, which covers the minor repairs I need to do.