The Year-Long Sale

Have you ever heard of a “Short Sale” in real estate?  Well, it’s definitely not a “short” sale!  During the recession, we helped plenty of clients with a “short sale” which is also known as a “pre foreclosure” sale. 

The actual definition of a short sale is:  an act or instance of selling short.  In a real estate transaction, a short sale is a sale that occurs where the mortgage company is not paid in full for the balance owed by the seller. When the seller does not have the assets available to pay the difference, the mortgage bank must write-off the balance that was short.

The reason we had so many short sales during the recession was because the economy as a whole wasn’t doing well and people were finding themselves unemployed and unable to make their house payments.  Additionally, those that still had jobs were many times under-employed and unable to qualify for a mortgage to buy a home.  On top of all of that, the lending practices leading up to the recession created a situation where many people did not have much equity in their homes to offset any losses incurred due to a sale.

This is where our story begins. We had a client who needed to relocate to Oklahoma for a job.  They moved out of the house in Wylie, Texas and left the home on 5 acres vacant.  We listed the vacant home for sale and got an offer pretty quickly….but this was a short sale, which required the mortgage company to approve the sale.  We sent the file to the bank for approval on the sale.  This included not only the purchase contract, but also the seller’s financials, a hardship letter, specific forms the bank required, and more. The bank had thousands of these types of files to review, so it was a long process.  After weeks of following up and resending documents for review, we still did not have approval to accept the sale. After months of following up, we finally got approval from the bank to accept the sale.  However, during the time that we were waiting the buyer who wanted to buy the house lost their job and now they didn’t qualify to buy the house.  So, after months of waiting, we went back on the market looking for a new home buyer.  At this point, the house had been on the market for 1 month, and we had been under contract for 4 months waiting for approval.  So here we are, 5 months later and we are starting over from scratch.

Several weeks later, we got another offer from a different buyer.  The new file was sent to the bank for approval, along with all of the updated financials.  Again we waited weeks, we waited months, and still no approval from the bank.  We waited another 4 months for approval from the bank.  By this time, we have been working on the sale of this one house for 9 months.

When the bank finally did approve the sale, the buyer’s lender required repairs to the house.  Of course, the seller didn’t have money to spend making repairs to the house.  Over the time that the house had been for sale, there had been some damage to the vacant property….some of it caused by contractors hired by the bank.  At one point, there was an inspection of the property by someone hired by the bank and they broke the back door trying to obtain access to the property.  This was just crazy because we had a lock box on the front door.  Regardless, the repairs were required. 

Since the seller could not make the repairs, they did give permission for the buyer to make the repairs.  This was a BIG risk for the buyer.  If the buyer spent money repairing the house and then wasn’t able to buy it after all, they would not be repaid for their work.  The buyers knew the property was the right home for them, so they agreed and made the repairs.  This took another 45 days to get the approval and get the work done. 

After the repairs were complete, we needed to get final approval by both banks to move forward.  Of course, this took months to complete.  By the time the home finally closed on the sale – and the new owners could move into their new house, we had been working to sell this house for over a year.

Being a short sale does not mean being a fast sale.  In fact, this is the slowest sale we have ever been involved in.

Whatever it Takes

My long-term client Frank recently retired from his job. He tells me he is ready to move to Florida and retire on the beach. He is a single guy who loves guns, computers, and his parents (who live in upstate New York).  He wants to have buy a place and let his parents come to visit him on the beach during the winters.

Over the years, I have helped Frank move 4 times. He trusts me to help take care of his real estate needs.  In our time working with together, Frank ALWAYS answers the phone.  Since he has recently retired, he spends a lot of time at home now. He still has a land-line phone, and when I call, Frank will answer the phone.  He does still have his cell phone too….so no matter when I need to reach him, Frank is always available to talk. 

As I help Frank prepare for his move to Florida, I help him sell his house.  We get professional photos, list the house in the MLS, host open houses, and negotiate the sale.  Things are going well, and there are no big issues to deal with…..until Frank stops answering the phone.

About a week prior to closing, I tried to call Frank on the land-line to give him an update from the title company.  Frank didn’t answer the phone.  I called him on his cell phone, he doesn’t answer that either.  I think to myself “that’s weird, Frank always answers the phone”.  Later that day, I call Frank again.  I try again later that evening.  Still no answer from Frank.

Starting to worry about Frank, I drag my husband with me to Frank’s house.  We knock, we ring the bell, no answer.  My husband is walking around to the back to see if there is a car there.  We are peeking into the window to see if we can see anything to let us know what happened to Frank.  While we are there, I notice the neighbor across the street has opened the front door and is watching us.  Of course, I ran across the street to ask if they know where Frank is.  The neighbor tells me that an ambulance came a day or two ago and she doesn’t know what happened.

I drive up to the hospital, trying to find answers.  The lady at the information desk tells me that Frank is in the Intensive Care Unit (ICU) at the hospital.  Since this is a restricted area for very sick patients, only family members are allowed and only limited visitation times.  Of course, I didn’t bother to tell anyone that I wasn’t a family member.  I just went straight up to the ICU floor and asked the nurses there which room Frank was in.  I was shocked to find that Frank was on a respirator with tubes and wires going everywhere in his room, they were monitoring him closely.  He wasn’t even aware that I was there to check on him.  I left a note with the nurse’s station to have any family members who came to visit please call me.  I needed to know that Frank was going to be OK. 

The next day, I get a call from Frank’s brother.  He was in town to help take care of his brother, and he said he was actually trying to get in touch with me because he knew that Frank was selling his house.  I told him not to worry about the house, first we needed to make sure Frank would be OK.  He assured me that he would be OK, but he would need my help with the sale of the house.  I told him that we would do whatever it takes to help Frank.

After several weeks, Frank was recovering nicely and we arranged to have the closing on the house at the hospital.  We did have a 2 week delay in closing, but everyone was just happy that Frank was going to be OK.  The newest problem that Frank was facing, is what to do with all of his personal belongings.  He could not continue to keep them in the house that he was selling, and he couldn’t store them at the hospital, and he wasn’t physically ready to actually move.  That’s where we came in!  Frank’s brother had everything loaded into a POD storage container except for the most prized possessions which were loaded up into Frank’s car.  Not having anywhere safe to store his car full of stuff, I offered that he could store his car in my garage.  Frank’s brother drove the car to my house, and we parked it in the garage so that it was safe until Frank was feeling better.

When closing day came, we brought the title company to Frank!  Frank signed the paperwork to sell the house from his hospital bed.  He still had a few weeks of recovery time in the hospital ahead of him.  I kept in touch with Frank and his brother, and when he was released from the hospital they came to my house to get the car.  As they drove away, headed toward the beaches of Florida, I was just grateful that we were able to help.  When our clients need us, we do whatever it takes!

This post is part of our "Single Stories" series. All of our stories are true, but the names have been changed to protect our clients.  Want to read more stories about the life of a REALTOR and what to do or not to do when buying or selling a home?  Follow our blog to read more at https://www.northtexastopteam.com/blog/

Cat on a Leash

Just when you think you have seen everything….you see a lady walking her cat on a leash.  We went to meet with the sellers, they wanted to sell their home in Plano.  We got the paperwork completed, had the professional photos done, and put the house into the MLS.  We hosted our first open house that weekend.  While we were there at the house, we saw out the window there was a woman walking down the sidewalk.  At first glance, it was no big deal.  However, a double-take revealed that she was walking her cat on a leash down the street. One of the people attending the open house had just pulled up, so when they entered the house of course they commented on the sight.  Since we didn’t know the neighbor personally, or which house was hers, we just decided how cool it was to be in a neighborhood with a cat walker! 😻  About a half-hour later as we locked up the open house, we saw the cat walker again.  This time, we were headed to the car with the signs so we stopped to chat with her.  She lived just down the street and she was out on a walk with her other cat.  She owned 2 cats, and walked them both on a leash in the neighborhood.  However, she couldn’t walk them both together so she walked them both by themselves every day.  She was very nice to visit with us about her cats and how much she loved her neighborhood.

This just qualifies as one of the funniest things we have ever seen while hosting an open house….but there is more to the story, so read on.

After a week or so on the market, we received multiple offers from home buyers who were interested in buying this lovely home.  Not all of the home buyers had attended out open house.  Several of the home buyers wrote a note to the seller about how they hoped that the seller would choose their offer.  One of the potential buyers wrote a note about how they saw themselves living in the neighborhood, walking their dogs and watching their children play with the other kids on the street.  They even mentioned how they saw kids playing on the sidewalk when they viewed the house.  The problem for the sellers was that there were no homes with small children on their block.  When the sellers read that note from that buyer, they felt that the buyer may have confused their home with another they had viewed.  In fact, the seller said “if they had mentioned they saw the woman walking her cat, then we would know they were at the right house.”  The sellers felt the buyer’s note was not genuine.  Apparently the sellers knew their neighborhood well…and the potential buyer did not.  When the sellers decided an offer to accept, they did not choose the buyer who had the wrong facts about the neighborhood.

This post is part of our "Single Stories" series. All of our stories are true, but the names have been changed to protect our clients.  Want to read more stories about the life of a REALTOR and what to do or not to do when buying or selling a home?  Follow our blog to read more at https://www.northtexastopteam.com/blog/

The Jailbird

I went on a listing appointment recently. The couple seemed to get along ok when I was there with them for our initial meeting.  However, what I found out later is that they were far from OK.

They failed to mention that they were in the middle of a divorce, they failed to mention that there was a restraining order against the husband (Mark), they failed to mention that the wife (Julie) had already moved out and was paying for the house as well as rent somewhere else. They failed to mention how volatile the husband was. They failed to mention that there was a history of domestic violence and abuse.  They failed to mention that Julie was not safe.

The couple did agree to sell the house, and both of them signed the paperwork to list the house. We found a buyer, and agreed upon the terms of the contract. Of course, it wouldn’t be a simple sales process though. 

The first hurdle was setting the sales price.  Mark wanted to sell the house for more money than the market sales indicated.  We had many discussions about how he needed the money so that he could move.  Julie was paying for 2 places to live and wanted to sell quickly.  Mark was not working, about to lose his free housing, and was not motivated to sell at all.  The only motivation that he had was that at closing he would get a lump sum of cash.  I would learn to use that lump sum of cash as a reminder for Mark throughout the next 45 days.  We did get the price set, and we did get a buyer under contract. That meant that the home selling process was in full swing.

The next hurdle was the home inspection.  Based on the findings of the home inspector, the buyer wanted the sellers to make some repairs.  Julie was agreeable as she just wanted to get the house sold.  However, Mark was not so helpful. He was living in the house for free while Julie paid for the house payment and all utilities.  He saw his free ride coming to an end.  He didn’t have a plan of where he would go next.  Therefore he was not willing to help make the process go smoothly.  He yelled and screamed on the phone.  He cussed and hung up on me.  Generally speaking, Mark was a jerk.

The deadline to get the repairs negotiated was midnight on a Tuesday.  After many heated phone calls (and me constantly reminding him that he was going to get a lump sum of money on closing day), Mark had verbally agreed to give $250 off the sales price. Everyone else had agreed to Mark’s terms as it was “his way or the highway”.  Around 4pm, the agreement was signed between all parties except for the Mark.  He had stopped answering his phone. He was not home. Without Mark’s signature on the agreement, the buyers’ only option is to terminate the contract before midnight.  All afternoon and evening, I periodically called Mark, and then updated the buyer’s agent.  Around 11pm, Mark finally calls to tell me that he is home if I want to meet to sign the papers.  The buyer’s agent lived closer than I did, so she agreed to go get Mark’s signature.  However, she certainly doesn’t trust him, and she understands how volatile his temperament is, plus it’s almost midnight, so she brings along her husband.  They get to his house around 11:30pm to get the paper signed.  She called me from her car. She tells me that she is rolling the window down so that she can hear what’s happening, but she is sending her husband to the front door to actually meet Mark to sign the document.  She is scared.  She wants me to assure her that I will call 911 if anything happens.  So, I stayed on the phone with her as she gave me the play-by-play of the event.  Thank goodness there were no issues – Mark signed it and made some crummy remarks – but didn’t threaten anyone or cause a scene.

Hoping that things would now go smoothly, we continue through the process.  Unfortunately the appraiser flagged an issue with the home, there were no city permits pulled when the garage conversion was completed. That meant that before we could move forward, the sellers would have to apply for a permit with the city, have a city inspector come out, and then complete any needed repairs.  The problem with this is that the city inspector needs to see the work BEHIND the walls such as electrical work and HVAC ducts.  That meant that the sellers had to cut 12x12 squares in the sheetrock for inspection.  Then after everything had passed inspection, complete the sheetrock repair and repaint. As you may have guessed, Mark was very unhappy that he was having to do more work on the house. He threatened the appraiser. He yelled and screamed on the phone. He told me he would “put a cap in that appraiser’s ass”.  He was belligerent.  Then he went to jail.

The good news about Mark being in jail is that it presented the opportunity for me to meet the city inspector, and the handyman, and help to get the city permits completed.  Julie had given me permission to facilitate the repairs and she paid for them out of her own pocket without asking Mark for anything.  I spent many hours working with various people to help get the house fixed.  I helped to move the aggressive pit bulls from the house to the yard and back again so that contractors could get work done.  At least things were moving toward a successful sale as far as the house was concerned.

The bad news about Mark being in jail is that we needed his signatures on some documents.  I never knew that the Dallas County Jail had a secretary on each floor of the jail to handle paperwork for the inmates.  However, I got connected to the right secretary where I could fax the paperwork to Mark.  I also sent him a handwritten note encouraging him to sign the paper so that he could get the money from the sale of the home soon.  The response that I received the next day was classic.  Mark sent me back a fax that said he would sign the papers if I would bail him out of jail.  I wasn’t even sure what he was in jail for at the time, nor did I care.  However, I was definitely not planning to bail him out of jail just to get his signature.

We proceeded toward the closing, with Mark sitting in jail.  We did as much as we could without his signature. While Julie never said exactly what had happened that landed Mark in jail, she eluded that it was due to the restraining order she had against him.  She told me that she wasn’t safe, even with the restraining order. She said he had come up to her job.  She said he was threatening people.

Mark was finally release from jail just in time to come to the title company to sign the paperwork needed. We made arrangements for Julie to sign the papers at a different time and location from Mark.  We made sure that the buyers signed on a different day and time.  Mark was the last one to sign any papers at all.  When he did show up to sign the paperwork, he threatened the title company employees and almost went to jail again.  However, the promise of him getting his money finally tipped the scale so that he would sign the closing documents.  The closing on the sale was complete.  Mark took his money and never looked back.

**All of our stories are true, but the names have been changed to protect our clients**

This post is part of our "Single Stories" series. Want to read more stories about the life of a REALTOR and what to do or not to do when buying or selling a home?  Follow our blog to read more at https://www.northtexastopteam.com/blog/

Buy a house for $1000

One of the best parts about being a REALTOR is helping first time home buyers get into a place they can call home.  It’s the American Dream.  Owning your own home, building a community with your neighbors, giving stability to your children, and creating wealth and equity.  This is what we love.  It’s why we do what we do.

Currently, the real estate market is a hot seller’s market.  In fact, it’s been a seller’s market for several years.  Home buyers have been paying top dollar to purchase a home.  Some home buyers have even spent thousands of dollars above the listing price in order to be the winning bidder when there were multiple buyers interested in a house.  That’s why this story is so cool.  This home buyer got to buy his dream home – and he bought it without breaking the bank!

Meet Danny.  He is a first time home buyer. He is a single dad with 3 children.  Danny wanted to raise his children in a community where they would know their neighbors.  He was looking for a home in a quiet community away from the hustle and bustle of the big city.  He was looking for the perfect home – the kind you can just move right into.

Danny trusted us to help guide him to the perfect town, one just on the outskirts of the big city. He wanted a town that had schools large enough to have exciting extracurricular programs for the kids, but small enough that he would know all of the other parents.  He found what he was looking for in Farmersville, Texas.  Danny needed the perfect house.  He needed enough space for the kids to grow.  He wanted a neighborhood where the kids could play.  We helped him find the perfect house, a brand new home built by Camden Homes.  Using some great negotiation skills, we helped him get an amazing sales price for his new house.  However, the best part about it all, is that due to our knowledge of the mortgage options available, we helped him buy the house with no down payment AND with closing cost assistance.  The entire amount of money Danny needed to buy his new house was only $1,000.  That meant that Danny would have more cash available to pay for the actual move and to spend on his kids. 

Danny and the kids have moved into their brand new house.  They love the neighborhood. They love it that they live just a few minutes from the lake. They love it that we helped them buy a house for only $1,000 out of pocket!

This post is part of our "Single Stories" series. Want to read more stories about the life of a REALTOR and what to do or not to do when buying or selling a home?  Follow our blog to read more at https://www.northtexastopteam.com/blog/

Foundation: Fix it First

Several months ago we listed a home for sale.  At the time, I asked the sellers if they had looked into the possibility of any repairs needed that I might not be aware of.  The sellers assured me that their home was “fine” and that they would be happy to cross that bridge when/if we came to it (meaning they would let a buyer find any issues during their home inspection, and then address them at that time).  So, we listed the home for sale.

Fast forward 8 weeks – after a ton of showings on their home, we get an offer from a buyer.  The sellers are so excited.  We go through the inspection process, and guess what…there is a foundation issue.  In fact the buyers didn’t even ask to have it repaired; they simply terminated their offer and bought a different home.

Of course the sellers are now aware of an issue so they have the foundation company out to do the repairs.  At the conclusion of the repairs, the plumbing test is done…but there’s still a leak.  So we run more tests – and make more repairs – and test again…but there’s still a leak.  So we run more tests – and make more repairs – and test again…but there’s still a leak.  So we run more tests – and make more repairs – and test again…but there’s still a leak.  FINALLY, we get the last leak fixed and we are ready to go.  However, it took approximately 3 months to get all of the repairs done.

AT THIS POINT WE HAVE SPENT MORE TIME OFF THE MARKET THAN WE SPENT HAVING SHOWINGS…ALL BECAUSE THE SELLER DIDN’T WANT TO CHECK INTO THE POTENTIAL PROBLEM BEFORE LISTING THE HOME.

I do understand that in today’s economy people don’t want to spend a ton of money making repairs to a home they are going to sell.  However, in today’s real estate market you have to be competitive and your home has to be in tip-top shape if you want to sell for top dollar.  In this case, the sellers not only had to spend the money anyway…but they lost a buyer and delayed their entire moving process by several months.  The sellers have been on an emotional roller coaster for months.

The morale of the story is:
Take the time to really evaluate your home prior to putting it up for sale.  Consider having a home inspection done and making repairs before anyone even knows you are selling.  Listen to the advice of your real estate professional, they are not emotionally attached and they understand the reality of the current real estate market in your area.  If you address the problems up front it will save you so much time and trouble in the long-run.

This post is part of our "Single Stories" series. Want to read more stories about the life of a REALTOR and what to do or not to do when buying or selling a home?  Follow our blog to read more at https://www.northtexastopteam.com/blog/

Once Upon a Time….a REALTOR decided to write down some of the things that were found in the day to day business of real estate.  Some days were filled with happiness, great deals, and funny events. Other days included hard times, foreclosures, and heartbreaking moments.  These are all true stories. The names have been changed, but the stories are real.

Oh Happy Day

When you first pass that real estate license test, you are SO EXCITED!  After all it was a long road to get here.  Before you can ever help a client, you have quite a process to go through.  You are required to take real estate specific classes such as Law of Agency and Real Estate Finance.  Once completed, you must apply with the state and take your test.  Then you must get your fingerprints done and pass the background check. All of the hard work you have put in studying real estate concepts has finally come to the point of actually getting a real estate license.

So now you have your license!  Are you prepared to help clients?  Absolutely not!  You have learned the abstract concepts of real estate, but have zero practical knowledge.  You have no idea what to do next, so you choose a Broker to work for and do whatever they tell you to do.  Hopefully they point you to some further education and training. Then they point you to your cell phone and say “go find some clients to help.” 

No one tells you about the adventure you are about be on – no one tells you that you may someday help a family with the exciting purchase of their first home, but the next day you may help a grieving family who has lost a loved one and needs to sell the house to pay for the funeral. No one tells you how good it feels to find the perfect house for someone.  No one tells you how sad you will feel when you have to help someone who is facing foreclosure.  No one tells you that buying or selling a house can make a sane person make crazy decisions.  That, my friends, is what Single Stories is all about.  It’s a collection of single stories about what happens in the life of a Realtor.

Follow us to read more: https://www.northtexastopteam.com/blog/

It's that time of year - the Collin Central Appraisal District has sent out the 2019 Notice of Appraised Value to home owners all across Collin County.  This notice to home owners, let's them know how much the tax assessor is valuing their home and therefore how much their tax bill will be at the end of the year. NOW is the time to protest your value and reduce your tax liability if you choose to do so.  We have been getting a lot of calls from residents asking for advice. If you want to know more about Property Tax Protests in Collin County, then this information is for you.

Here are a few helpful tips:

1. If the house is your primary residence, make sure that it shows you have a "homestead" exemption on the property.  If not, you can file that for FREE.  Click here to access the form.
2. You may want to look up your neighbors home values at www.CollinCAD.org.  If your house is not in line with your neighbors, you can use that information from the County in your protest.
3. Ask a Realtor to send you some comparable sales data.  The data should be pulled from 10/1/18 - 3/31/19 since the tax assessor is determining the value as of 1/1/19 for your property.  You can request that from our office by emailing Melissa@NorthTexasTopTeam.com
4. The time frame to protest is 5/15/19 or  30 days from the date of the notice.
5. You can protest online, on the phone at 469-742-9200, or in person at 250 Eldorado Pkwy, McKinney, TX 75069.  If you go in person, it's 1st come, 1st served. You may have a 30-45 minute (or longer) wait to be seen, but you do get an answer that day.
6. You will want to start with an "informal review" where you can present your information to a staff member. They have the ability to change your value (which lowers your taxes) or make no change. Bring all of your paperwork with you to this appointment.
7. If the staff person makes no change, you can file a written protest for a formal hearing with the Appraisal Review Board.

Collin Central Appraisal District will be open late between now and May 15, 2019.  To see their extended hours schedule, click here.

I hope this information is helpful as you plan to protest your property taxes.  If you want more information about how TEXAS REALTORS are fighting for property tax reform, read this.

Texas Realtor Day at the Capitol 2019

The Texas Realtors, with over 125,000 members, had a coordinated effort to meet with Texas Legislators on March 26, 2019 during the 86th Texas Legislature.  Thousands of Realtors from all across the state made their way to Austin Texas that day to meet with Senators and Representatives of their districts.  We call this "Texas Realtor Day" at the Capitol.  When Realtors speak, legislators listen because many of the Realtor issues affect so many of their other constituents. The goal of the Texas Realtors is to ensure Texas remains a great place to do business, raise a family, and buy/sell/lease real property.

Some of the topics covered this year include:

Property Tax Reform/Relief

Texas Realtors support legislation that promotes honesty and transparency in the process local governments follow to set property tax rates.  We want public engagement in the process for all property owners (residential, commercial, and land).  Texas Realtors oppose mandatory sales price disclosure and oppose efforts to weaken equal and uniform appraisal protections.  This means that Texas Realtors support SB2 and HB2.  Both of these bills enhance transparency and give voters a voice when local governments set the tax rates that determine Texans' property tax bills. 

School Finance Reform

Texas Realtors support improving the public school finance system to increase the state's contribution to fund schools while decreasing the burden on local property tax payers. We support SB4 and HB3.  Senate Bill 4 provides comprehensive restructuring of the system to increase state funding and creates a system for giving raises to deserving teachers and staff. House Bill 3 transforms the school finance system with increases in state funding and reduction in school property tax rates by 4 cents.

Annexation

Texas Realtors supports legislation to extend the right for impacted residents to vote on whether their property is annexed into a municipality. Forced annexation directly impacts residential & commercial real estate as well as land owners.  When a municipality forcibly annexes property, the affected property owners are subject to new taxes and regulations without their approval.

Other issues Realtors across the state are currently fighting for includes Disaster Response, Eminent Domain, Home Equity, and the Texas Real Estate Commission's Sunset Review report.  To learn more about what Realtors are doing to fight for YOU, contact the Texas Realtors in Austin Texas or visit www.TexasRealEstate.com/Issues

When you need a Realtor, make sure that you hire a Texas Realtor who knows the issues and gets involved.  They are better able to assist you with your real estate needs.

What is the difference between Instant Offers or iBuyers and selling with a traditional REALTOR?

With advances in technology and new ways to utilize data, some companies have sprouted up to create different ways to sell your property. Generally speaking, these companies are real estate investment companies such as Open Door, OfferPad, and Zillow; just to name a few. They are sometimes referred to as Instant Offers or iBuyers for your house.  Basically, these companies utilize automated valuation models (AVMs) to make a quick offer on a house. This, coupled with their ability to pay cash for the house, allows the investor company to close quickly. Then the investor company resells the house.

From a seller's standpoint, it seems appealing to eliminate the hassle and uncertain time frame of selling a house (you pick the closing day). However with high transaction fees ranging from 7% to 14% plus closing costs, and the likelihood that they will sell the home for more than they paid you for it, you are simply exchanging that smooth and quick transaction for a portion of the equity you have in your home. Most sellers don’t realize that by working with a REALTOR, they can save money and still have some general certainty of the time frame to sell based on historical data for how long other homes took to sell.

These companies operate by having homeowners complete a questionnaire with information on their house. They feed that data into their AVM, which kicks back an offer price. They make the homeowner a cash offer to close quickly (usually 7-10 days) and they specify what the fee will be to proceed through to closing. Sometimes the investor company even requires the seller to make repairs to the home before they will buy it. Generally if a seller will consult with a REALTOR, they will find that they can sell the house for more money with lower fees. This means more money in your pocket when you move.

Once the investor owns the house, they may repair and/or do some minor updating. Then they will list it for sale on the open market (generally through the MLS, and generally with a REALTOR). It may be tempting to consider such an offer, but keep in mind that this is a straight numbers play. They are determining a price that allows them the room to cover the costs of the transactions as well as the repairs/updates, while still making a profit. Their profit will either come from the fee you've paid or from acquiring your home at a below market price - although it could possibly be a combination of the two.

An analysis on one company's transactions showed they were selling homes at an average 5.5% appreciation, on top of their transaction fee. That's a lot of money to leave on the table for a little bit of convenience. There are other companies beginning to test alternative listing models as well, utilizing technology and AVMs to make 'instant offers' on homes. As always, it's important to read the fine print and understand what you are agreeing to.

If you want to talk to a REALTOR to get another option for selling your house – and you want to know more about a realistic market price and time frame to sell on the open market – give the North Texas Top Team, REALTORS a call at 469-759-3899.

Our agents can help you navigate the home selling process and get you top dollar for your home.