My wife and I got married in July 2011. We bought and moved her into the house in
June of 2011 and I moved in once we were married. We originally thought we’d keep the thing forever either for
ourselves or as a rental later on as we both would like cash flowing assets to
retire on one day. Then came the late
summer and fall of 2011 where I started…learning.
I learned how much trouble our
global economy is in trouble and how dangerous the next few years are going to
be. I figured that our house then
wouldn’t really ever appreciate in value, and especially not anytime soon. And when the economy does collapse I thought
that I’d lose the equity (and purchasing power of that equity) I had and be ok
with it cause then I had a place to garden and have my chickens and raise my
family and store my crap. Then things
changed.
My parents ended up selling their
home to help them downsize and they had a bunch of cash and so one time on the
phone jokingly I told my mom she should just pay off our home and then I’d just
pay her cause she’d be getting paid better than what the bank would be paying
them in interest. Gotta love banks
btw…sheesh…lil shysters.
Anywho my dear ‘ol ma, after me
mentioning that my old realtor had actually done something similar with his
grandma and his home, suggested I get in touch with him to just see how that
all worked out and then if it was something that could happen in our situation
then maybe we’d move forward. So I
emailed my guy and broke the ice with “So Conor is my house worth a million
bucks yet and I should sell?” I also
asked more about his gma sitch and if he couldn’t shed some light on it. He responded and said that my house wasn’t
worth a million, but ballpark about 20-30k more than I bought it for, which 1)
shocked me and 2) made me a little skeptical.
I thought how could it be when I just bought the thing less than 2 years
ago?! I was pretty excited though cause
quick/easy math is that closing costs these days are about 10% of the sales
price and with what my mortgage was I knew I’d clear about 15-20k at that
point. That is a lot of purchasing
power!!!!
So the whole “have the parents pay
off the mortgage and then pay them” idea went right out the window and we moved
on to “Lets get dat equity/purchasing power while we still can!” I asked Conor to come over and show us comps
and realistically what we’d list the house at.
He came over and then Ashlee and I discussed what he was projecting and
our bottom line for selling and decided to sign with him and get the thing
done. A short time later I broke the
news to my mom and she said we should look into selling it ourselves and save
on the seller commission costs. When
you sell a home you as the seller pay 3% of the sales price to both the
buyer/seller’s agents on top of any other concessions you make, which for us 3%
of the sales price was about $3,500. I
kinda had a sick feeling to my stomach for a few reasons.
Sick reason 1) I like Conor and
felt bad about backing out on him. 2) I
wasn’t sure I could do it and would be embarrassed and was embarrassed with
thinking about having to go back to him should I suck at it and not get it
sold. 3) I felt sick thinking about
losing out on 3.5k when my parents just sold their house themselves too. 3.5 takes me a month and half or so after
taxes to earn and so that wasn’t something to just leave on the table.
So my mom mentioned and sent me a
few websites that they looked at when they were considering selling their home
themselves. The one they went with and
the one I went with was owners.com. It
is really nice for a few reasons, which I’ll explain in a sec, but first to finish
what happened with Conor.
I decided, w/my wife thinking
otherwise, that I wanted to try and sell the place myself. I’ve sold a lot of things online and know
how to do a good presentation and so I figured with a little guidance that I
could do this and “make” 3.5k. So I
emailed Conor and said I was gonna try and sell it myself and that if it was a
dud I’d come back to him, promise…kinda deal.
He was smart and said he’d already had a lady scheduled to post the ad
for the house on Monday, which I think meant I was emailing him on a Thursday
or Friday. I said that I was sorry, but
I was gonna do it myself and that was that.
Then came gut check time. Owners.com will list your property on the
local mls site, but to get that you need to pony up $395. Credit card here I come! Yee haw! We paid it off no problem, but man if this
was a dud I was out $395 AND the sellers commission cost if I went back to
Conor so I was nervous about that. But
paid we did.
We had already taken pictures of
the house and put it up on a local site and showed it a couple times by the
time I signed up for owners.com.
Hindsight is a beautiful thing/great teacher I’d say. The second day we had it listed on our local
site, not the mls, we had a couple come through who loved the house and said
they’d pay full price and they didn’t have a realtor. WHAT?!?! No commission
and no closing costs would’ve meant we’d net out around 30k, which would’ve
been amazingly awesome. Hindsight is,
after they were scared away by a leaky
pipe, that we should’ve offered to pay top dollar to have the whole system
fixed for a few grand cause then we’d still have made out better with not
paying closing costs or buyers commission, one of the two I mean, but who knows
maybe that wouldn’t have worked.
So we listed the house and had
quite a bit of traffic. That is one
thing I feel bad about with Conor is that he gave us an excellent price point
to start with and we ended right where he said he thought we would.
Owners.com was really nice
though. What they do with the $395 is
they assign you a local realtor who is in their program/system and they send
you ALL the documents you need. The
realtor makes sure you’re doing everything legally and by the books too. In Utah your title and escrow company will
also make sure that you’re good to go and following everything by the
books. When you’re first on owners.com
and have paid you basically just set up the listing for the house and I think I
also sent my pictures to my realtor so they could list them in the mls
listing. You have to provide them with
the little blurb on describing your house, but luckily I still had that or
perhaps Conor had it and I just copied his description, which was in all
realtor speak so that realtors can understand what is actually being described
on the place, plus we added things to the blurb that we’d like to know were we
looking at the listing ourselves.
After emailing them the pics I
think I also listed it on craigslist.
Doing that I think got a lot of emails generated asking if we wanted to
do a rent-to-own basis at all, to which I only responded to like the first one
and then realized the rest (and the first one) were all spam and so I just
ended up deleting them. So maybe
listing on craigslist doesn’t matter especially if you already have a more
popular local site like we do here that people use more than craigslist
anyways.
Once we had the listing up on the
local MLS we had a constant stream of realtors calling to ask to show the
place. That is one thing that I was
worried about, i.e. that we wouldn’t have a sellers agent to “market” the
home. What do they do to market other
than put it up there and perhaps tell some of their buddy agents to check out
their new listing? I mean they’re not
going to trade shows or going door to door asking people if they want to buy a
house in the ghetto of salt lake. So in
case you’re worried about lack of exposure and “marketing”, don’t. As long as you put it up on the local MLS
site you’re going to have people blowing up your phone with calls/texts to ask
to see the house.
One caveat is that you will have
dooshbag/pushy agents calling to ask to list the home for you. If they’re a jerk, just hang up. Otherwise just say no thank you and then
hang up lol. Some gave us grief and
were rude saying that we were causing issues and that “this happens all the
time with for sale by owners”. My wife
and I just thought we wouldn’t sell to those people even if they did put in an
offer just cause of how rude they’d been.
I felt bad for some buyers having to work with those guys cause clearly
the agent doesn’t give a rats behind about them and they’re just another
payday.
Overall I think we had 10 or so
showings in the first 10 days. The
young couple that came through came through on a Saturday I want to say and
then we got an official offer that following Monday or Tuesday. This is where not knowing what I was doing
was a little embarrassing as I replied to our real estate rep from owners.com
that we wanted to counter and that our counter was ___. She responded saying she doesn’t do that, but
that if we upgraded to full service representation, which was like $700 or
$750, that she could draw up all the paperwork and negotiate and what not. I said screw it and started digging through
the packet of files they sent me electronically that had all the paperwork we
needed and sent her back the counter. I
think they countered one more time to our counter and asked we fix a leaky pipe
after their home inspector saw that issue, which we did, and that was
that. House under contract.
The pipe got fixed for $350 and
then it backed up and so that cost another $160. After that the next step was to find a title company to handle
our closing process. I got a call from
a guy who said he often worked with the real estate rep we were assigned and
quoted me a price of 1% of the purchase price…I recommend shopping around. We went with the title guy that Conor
recommended to us and was several hundred dollars cheaper and even cheaper than
the title co, who I also called for a quote, that I used when I bought the
house.
So once we got the pipe fixed we
just waited for the appraisal next.
Keep in mind most of this time I was anxious that the sale would fall
through any second cause I experienced vicariously my older brother selling his
house SIX times before it finally went through just last year. The appraiser came and took some pictures
and measurements outside and asked us what the sales price was and any
concessions we made and left. It took a
while to hear back on whether or not it came back high enough. For those of you who are like me and don’t
know what the appraiser is all about basically they’re an independent party who
verifies that the house is worth what it is worth so the Lender/Bank is not
over-lending on a home. If they are,
i.e. the sales price of a house was 100k, but the appraisal was only 80k, then
essentially you’ve got to lower the price to 80k or the buyer would pony up
cash for the difference. Our house was
a mess when the appraiser came through, but good enough to come in high enough
that we didn’t have to lower our price so that was welcome news.
From there it was just anxious
waiting till going and signing closing documents at an Artic Circle in the
valley. Then we dropped off the keys on
the meter of the house and that was that.
We cashed the check the day after we closed and now we are officially
debt free, have quite a bit of purchasing power, a kid on the way, and looking
forward to the future.
Pros of selling the house
ourselves:
·
No commission to our seller agent, as great as he
would’ve been. He’s not several thousand
great.
·
Got to learn how it works as far as paperwork goes.
·
Got to learn the process of listing, showing, and
closing on the sale works.
·
Control of when to show the house.
·
Control of what to put in our listing, which was more
than our agent would’ve done for sure.
Cons of selling the house
ourselves:
·
Basically just managing the scheduling of showing the
house
·
Negotiating, but once that was learned/done it was cake
really
·
Not knowing what the next step was, but now that that
is done it’d be no big deal the next time around
So would I do it again? Without a question yes. I
don’t think I’ll ever use a seller’s agent after my last experience unless it
was like my kid or niece or nephew selling my house and it would go towards
helping their family sending a kid to college or a mission or get married or
something like that. Otherwise my time
and effort will suffice to compensate me for the work in the form of saved
sellers commission.
I would also say I might not use a
buyers agent going forward either, cause lets be honest, we all look at a
bajillion houses ourselves online and we could schedule a time to see the
houses we really want to see and then…because we wouldn’t have a buyers agent
to have the seller pay a commission we could negotiate the price down of the
seller approximately 3%. I know they
ALLLLL say, “Ya buying a house is no worry for using an agent cause you as the
buyer don’t pay the buyers agent, the seller does.” In my opinion that is the same sort of crazy flawed and lazy
logic many pundits use for economy and housing today. Well is the seller increasing their price, or is it built into
the ENTIRE real estate market at an inflated 3% to compensate for a real estate
agent helping buyers get a house? The
answers are yes and yes. Why wouldn’t
it be? It is just like subsidies and
“tax credits” for buying a house.
Remember when the tax credit went away for first time home buyers and
then the market got whacked just a little bit more? That’s because the government wasn’t artificially increasing
demand on the low end by X% by offering the tax credit. My opinion is that if everyone decided to do
a little work themselves and not use a seller/buyer agent like the traditional
line of thought is right now than housing across the board would be 5-6% less
than it currently is. We could cut out
that waste and just have intermediaries like owners.com agents that facilitate
when/where needed and the rest is left up to us. On a 100k home that is 5k less…not enough to change the
world. If the average home in America
though is selling for 150k then that is saving 7.5k. 300k home is saving 15k.
That isn’t chump change by any means and guess what? We don’t need to be paying that lol.
So!…that was my experience. A good one overall. I recommend selling your next home
yourself. Good luck!
