Caleb: Hi, I’m Caleb with Buyers of Bakersfield and this is my son Jackson. I wanted to talk about a question that I get quite a bit, which is, how do I sell my house without a realtor? There are really three main options that people use, which is one, is for sale by owner. The second one is iBuyers or institutional buyers. And the third one is, through a local real estate investor, or a we buy houses company.
The first one, I think a lot of people are pretty familiar with the for sale by owners. You see the FSBO signs when you drive by the street. People want to use this, especially when they want to save a couple of percent on agent commissions. They don’t want to pay somebody to do something that they can do themselves, right? And that usually amounts to a few thousand dollars, maybe two to five thousand dollars depending on the house.
But it means a ton of extra work. They need to do a lot of the fixing up, and you need to show the house yourself, you need to stage the house yourself, you need to go through all the paperwork and do all the negotiations yourself. And if you’re good at that kind of thing, or you have the extra time to do that, then it’s actually a pretty good option to save some money.
The second option is the iBuyers. And this sounds like a really good option for a lot of people if they’re bigger companies like Zillow or Offer Pad, and we know a lot of these companies, we know their names. And you can submit your house and your information online, and they get back to you with an offer right away. But the thing with those is many times that offer that they send the first time is probably not going to be the final offer.
They’re going to send a representative out, and they’re going to look at a house, and they’re going to find all the things that are wrong with it, right? And then they’re going to take their offer down and try and renegotiate. And that offer might still be pretty competitive because they’re a big company, but what happens is, they operate on really thin margins of profit, because they’re banking on the fact that they’re going to be able to do thousands of houses a year.
They have millions and millions of dollars from institutional money that they can spend. And so they’re going to make maybe a lot less than a local real estate investor would make, but they’re going to make a lot more because they’re doing a lot more deals.
Now the problem with that is, we saw that in the beginning of 2020. When COVID-19 hit, almost all of the institutional money just kind of went away overnight. They pulled out of thousands of contracts, leaving thousands of people high and dry in what was already a pretty scary time.
Contrast that with Buyers of Bakersfield, we had a property under contract in the middle of March or so. And it was a week before the Governor’s orders in California came out to all the Stay At Home orders. And we still closed on that property. We gave them the full offer that we made. And he was happy, and we were able to still make a pretty good deal on that.
And that leads me to my third option, which is a local real estate investor, or a we buy houses company. They’re not going to offer the top dollar. If you’re going to get an agent, they’re going to stage your house the best that can. If you’re going to be for sale by owner, you can take care of all that stuff yourself and save on the commission. It’s going to be a few thousand dollars. And if you do an iBuyer, you might get quite a bit of money from that, but you also run the risk that they could pull out at any time. And they’re probably not going to be a hundred percent honest with you during the whole process.
But a real estate investor, or a we buy houses company like Buyers of Bakersfield, we like to work with the seller. We will come over and take over all the work so you don’t have to do any repairs. We can close really quickly, as fast as two weeks, sometimes a little bit sooner, sometimes a little bit longer, especially in this kind of weird COVID time that we’re in right now.
But we take care of all the work for you, which could save you thousands and thousands of dollars. Usually, it takes a homeowner several months to fix up their property. Could take tens of thousands of dollars to fix it up and get it to the right place. And you might ask, “Well, why wouldn’t I do that myself? Why would I purposely give a discount on a house and not make every last dollar that I can?”
Well, why do people go to mechanics to have oil changes or tire changes? Right? Most people could do that themselves. Some people can’t. Some people are in a position where they’re just not physically able to do that, but most people can do that themselves, but they’re willing to pay a little bit more money because they see the value in having somebody else do all that work for you, and they’re willing to trade that.
So a lot of these local investors, and companies like Buyers of Bakersfield, they’ll do all that work for you, and they trade off a little bit of value. But the market right now is so competitive. In July of 2020, investors accounted for 15% of all home sales in America. So more and more people are realizing that this is actually a really legitimate option for them, and a really good idea if they don’t want to have to deal with all the things that it takes to fix up your house, and to go through the months-long process of finding a buyer, negotiating, and maybe having somebody else that’s financing fall through.
These companies will have actual cash ready to go. They can actually close. And there’s no doubt about how they’re going to close or if they’re going to be able to close.
So if you have any questions about these, and if you want any kind of help going through these options, feel free to give us a call. My number is (661) 384-7021. We’d love to help in any way that we can. Thanks!
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