You’re excited about the changes life is bringing to you. You just got a promotion at work and you need a new home, or you are going to be a parent shortly and now you need a bigger house. Or bad stuff is happening, like you’re getting divorced or a parent just passed away, and now you need to get rid of the house. Most people reach out to a real estate agent when they need to sell to see what their options are, or they reach out to a cash buyer to sell their house as fast as possible. What if I can tell you about the best way to sell your house that no one is talking about? What if it doesn’t matter what condition the house is in? What if you want to put the most money in your pocket? We can help. Read on below to find out how and why you need to contact an investor agent (or agent investor) like the ones at SILT Real Estate and Investments, LLC.
What Is An Investor Agent?
You’ve probably heard the term investor agent used before. I’d like to think that the way it’s used isn’t exactly correct and sometimes is referred to as an agent investor. We’ll use those interchangeably here, but let me first tell you a story before I define it and you can start to see some of the advantages of using an investor agent. Read on to find out more.
I had a friend, let’s call him Bill. Bill got promoted at work but it required him to move about 2 hours away from where he currently lives. He also bought his house just a little over a year ago. Because Bill just put new windows and appliances in the house, his payment was really low due to historic interest rates, and he didn’t really want to pay agent commissions (since he just bought the house not too on ago and saw some decent equity in the house), we talked through his options. As an investor agent, we could explain numerous ways he could go about selling this one or utilizing it for income to help purchase his next house. Do you know what they are? Read below to find out what options we gave him.
Option 1 – The Lease Option
A lease option is commonly referred to as a rent-to-own. Most people use rent-to-own as an umbrella term for anything where you rent a property with the ability to own it at the end of your lease term. To me, the one thing with this is that it sounds like you are ensuring that they can buy the house, and this may not be accurate for every person who has ever used one. So I’ll only use the term lease option from here on out. So now what is a lease option? A lease option is exactly what it sounds like. It is a lease with a framework included in it that allows the ability to purchase at any time throughout the lease. The big thing with this contract is that everything needs to be spelled out. You can read more about a lease option here.
So how did this help Bill?
Well, with most lease options, there is a fee for the ability to purchase the property and lock in a price well ahead of the end of the lease. Also, in most lease options, the tenant would be responsible for most of the maintenance of the property leaving Bill with lower monthly expenses. Bill would also have a set amount of income during the lease time. So Bill would have the parameters of his mortgage allowing for cash flow from rent with fewer expenses. He’d also have some money for a down payment on a house and could guarantee a good price for the sale of his home if the option is exercised.
Option 2 – List It On The MLS And Sell A House Quickly
This is how most think of selling real estate and many say is the traditional way of selling real estate. The goal here is to maximize the amount your property would sell for by creating demand for it through good marketing. It usually starts by getting a Realtor to help you. With an investor agent like the ones at SILT Real Estate and Investments, LLC, you already have one. They help you prep your house to make it stand out in the market. They provide the tips you need to sell your house faster. Then they market it by listing it on the MLS and other places buyers are looking to sell. Once offers start coming in, they negotiate a contract for your house. They then keep everything on schedule and ensure the sale of your property. It’s almost exactly like what you see on HGTV without the crazy rehab or the crazy locations. The downside to this though is the waiting.
So how did this option benefit Bill?
Though he needed to move and sell the property, he wasn’t in a rush. Because Bill wasn’t in a hurry, he could really prep the house and market it properly. Knowing that the market is still moving positively, he could maximize the sale of his property and use all the proceeds for the purchase of his next home. He would be losing any income, but the offset from the lower monthly payment of his next mortgage payment would become even greater when he refinances the mortgage later on.
Option 3 – Sell To An Investor
Typically you’d think that selling to an investor would mean all cash, lowball offers to purchase. It would be a take-it-or-leave-it kind of offer. Bill would have had to give up his equity to make this happen.
That wasn’t the case. An investor with more creative ways to purchase could give close to the retail price but would have to have a unique way to purchase the property. He wouldn’t be able to give him all the cash right away. He could give him some now and other payments over time to actually create more money and income for Bill. Because he would be financing what was owed to Bill, he’d end up paying more and Bill would make more over time. There would have been an additional $3,000 annually that Bill would have been collecting as an interest payment.
This sounds too good to be true. Now how did this one help Bill?
So this one is a little more complicated, but broken down as simply as possible is that the seller takes over the payments of the mortgage in a process called subject to, and the difference in the sale price and what’s owed on the mortgage is financed by the seller. The seller collects interest payments on that difference and the buyer would generally put something down. In this case, it was a little more needed for the down payment so he wouldn’t have to come up with anything to close on the purchase of his future home. After all, is said and done, he could potentially make more on the sale of his house, as he would be avoiding fees and commissions and would have that monthly income for as long as the difference is financed. There’s a lot to this and would be dependent on your unique situation, but if you want to more about this one, contact us here and we’ll be glad to talk to you about your unique situation.
If you think you have a home that you want to sell on the market but want an opinion from an investor agent who can get you the right solution, fill out this form below.
Sell My Market Ready Home
What Did Bill Choose?
Bill chose to list his property and sell it. Ultimately, it came down to the numbers and time frame before the income would become greater than the difference in savings from his mortgage. He also knew that finding someone who would want a lease option was much harder than either of the other methods. He knew it didn’t need to be sold within a specific time frame and he wasn’t paying double mortgages. He moved in with his sister and brother-in-law in their spare bedroom so that he could save money and not worry about paying 2 housing payments. This allowed him to peacefully decide to list the property and wait out the process.
How Does This Help You?
Really, it comes down to getting options and finding the right option that fits your unique situation. By finding investor agents who don’t have to fit you into a certain box to work, you can walk away with many different options and a more personal formula for you.
Honestly, this is probably where everyone should start when looking to sell their home. And if you think you want to learn about the options you have to sell your market-ready house, fill out the form below to get started. Or if you have questions and just want to talk to us about them, give us a call at (708) 415-3801.