Traditional Listing with real estate Brokerage, Lone Star Luxury. Note: Investor friendly Brokerages can assist in creative financing selling strategies on the retail MLS market with homestead/owner occupied type buyers.
The most common way to sell Texas property, that is not in a stressed, nor difficult situation, and looks magazine ready, is on the global retail market, the MLS. A Lone Star Luxury Real Estate Agent can facilitate a traditional listing for your property. Lone Star Luxury has helped thousands of buyers and sellers to buy and sell property on the MLS. When listing on the MLS your property needs at least 10% equity and it must be able to show to potential buyers.
Lone Star Luxury can market your property through the MLS (multiple listing service) which is where over 90% of people go to look for a property to purchase. All other major real estate marketing websites syndicate from the MLS. The MLS is the most powerful marketing Multiple Listing Service on the planet for Real Property. Lone Stary Luxury Agents have great experience in pricing and marketing properties to sell for the higher sales price point than one would get on a wholesale market or an investor offer. Deciding whether to sell with a traditional listing service or an Investor depends on the property, the financing and the seller’s situation. Mike is the designated Real Estate Broker of Lone Star Luxury and he can help you decide if your best path to sell is through a traditional listing.
Traditional Listing Example:
Here’s an example breakdown of the typical closing costs involved in a Traditional Listing when selling a home in Texas with a sale price of $300,000. Please note that these costs can vary and are subject to negotiation between the buyer and seller. This example assumes a June closing date.
1. Title Company Costs:
– Title search fee: $250-$500
– Title insurance policy (seller’s portion): Approximately 0.5% of the sale price, so $1,500
– Escrow/closing fee: $300-$500
– Recording fees: $100-$200
– Document preparation fee: $100-$200
2. Real Estate Agent Costs:
– Commissions for Buyer Agent and Selling Agent are Typically 5-6% of the sale price, so $15,000
3. Survey Company Costs:
– Survey fee: $500-$1,000
4. Other Typical Prorations:
– Property taxes: Depending on the county and timing of the sale, you will have to prorate property taxes. Let’s assume an annual property tax of $8,000. If the closing is in June, you would owe about half of the annual property tax, so $4,000.
– Homeowners association (HOA) fees: If applicable, the seller may need to prorate any unpaid HOA fees for the month of sale. Let’s assume $100 for the monthly HOA fee, so $100.
Total Closing Costs:
Title Company Costs:
– Title search fee: $400
– Title insurance policy: $1,500
– Escrow/closing fee: $400
– Recording fees: $150
– Document preparation fee: $150
Real Estate Agent Costs:
– Commission: $15,000
Survey Company Costs:
– Survey fee: $750
Other Typical Prorations:
– Property taxes: $4,000
– HOA fees: $100
The total closing costs for this example would be $21,550 (or only $17,550 if you’ve already paid half the year’s property taxes)
Remember, these are just rough estimates, and the actual costs can vary based on the specific circumstances of the sale and the agreements made between the buyer, seller, and service providers involved. Consult with Mike or a title company to get accurate and up-to-date information regarding closing costs in your specific area.
In this tradition Listing example, you hired Lone Star Luxury, a Texas Real Estate Brokerage, to put your property on the MLS and marketed to buyers (who mostly found the property with the help of other realtors looking in the MLS). Several buyers looked at the property until one negotiated an offer resulting in a fair market value. The process likely took 40-90 days, marketing efforts, negotiations, etc. but did result in a sale at a price approaching full market value.
Real Property Hero can recommend one of our Texas Realtors to you if this is an option you wish to explore. We are part of a national network that buys and sells large volumes of properties. Our network has gone through the painstaking process of interviewing and even hiring scores of realtors, to determine who the VERY BEST ONES are, and we would be happy to refer these to you at no charge.
Advantages and Disadvantages of selling real estate with an Investor versus selling as a traditional listing with Lone Star Luxury
Selling real estate with an investor or selling through a traditional listing with a real estate agent each has its own advantages and disadvantages. Here’s a brief overview of the pros and cons of both approaches:
Advantages of Selling with a Real Property Hero Investor:
- Speed and Convenience: Selling to an investor can be a faster and more convenient process compared to a traditional listing. Investors are often ready to make creative financing offers or cash offers and can close the transaction quickly, which can be beneficial for sellers who need to sell the property promptly.
- Certainty of Sale: When dealing with an investor, there is typically a higher level of certainty that the sale will be completed. As investors are experienced in real estate transactions, they are less likely to back out of a deal due to financing issues or other contingencies like a retail market buyer would.
- As-Is Sales: Investors often purchase properties in their current condition without requiring inspections, extensive repairs or renovations. This can save sellers time, effort, and money that would otherwise be spent preparing the property for sale. FHA and VA loans need a property to be in good condition in order to fund.
Disadvantages of Selling with a Real Property Hero Investor:
- Lower Sale Price: Investors typically look for properties at a discount to ensure profitability and cash flow. Consequently, sellers may receive lower offers compared to listing with a real estate agent who market primarily to homestead type buyers which can often pay more, and who would aim to maximize the sale price through marketing and negotiation. Although often this is a wash given the savings on real estate agent commissions and other typical traditional listing costs.
- Limited Market Exposure: When selling to an investor, the property is not widely marketed, which can limit the pool of potential buyers. This may result in fewer offers and potentially a lower chance of securing the best possible price if you are selling to a homestead type buyer.
- Limited Negotiation Power: Since investors are primarily motivated by profitability and cash flow, sellers may have limited room for negotiation in terms of price and terms compared to the negotiation process in a traditional listing. If you are in a hot seller’s market, you may even deal with multiple offers that will get you a higher sales price also.
Advantages of Selling with a Lone Star Luxury Real Estate Agent (Traditional Listing):
- Maximum Exposure: Listing a property with a real estate agent exposes it to a wide range of potential buyers through marketing strategies such as online listings, open houses, and print advertisements. This broader exposure can attract more buyers and potentially lead to higher offers.
- Expertise and Guidance: Real estate agents possess market knowledge, negotiation skills, and experience in handling real estate transactions. They can guide sellers through the selling process, assist with pricing the property, and help navigate legal and contractual aspects.
- Higher Sale Price Potential: With the increased market exposure and skilled negotiation, a real estate agent may help sellers achieve a higher sale price compared to selling to an investor, especially since homestead/owner occupied type buyers are willing to pay more.
Disadvantages of Selling with a a Lone Star Luxury Real Estate Agent (Traditional Listing):
- Longer Timeframe: Selling through a traditional listing can take more time, as it involves marketing the property, scheduling showings, negotiating offers, and potentially dealing with contingencies during the closing process.
- Preparation and Costs: Sellers may need to invest time and money in preparing the property for sale, such as staging, repairs, or upgrades, to attract potential buyers and maximize its appeal.
- Uncertainty of Sale: While a traditional listing offers the potential for higher sale prices, there is also a risk that the property may not sell within the desired timeframe or at the expected price due to market conditions or other factors that come with h.
Ultimately, the decision between selling to a Real Property Hero investor or using a Lone Star Luxury real estate agent depends on the property’s condition and financing, and the seller’s specific circumstances, priorities, and timeline. Mike is a seasoned Investor and a 20+ year real estate broker. Mike has fiduciary duties to give you honest and based advice when deciding whether to sell real estate directly to a Real Property Hero Investor or as a traditional listing with Lone Star Luxury.
Finally, most REALTORS are trained on a specific way of doing things and do NOT think outside of the box when the seller or buyer is faced with a difficult situation. For example, most REALTORS think that the only option for a seller with little, no, or negative equity is a short sale or worse a foreclosure. And most REALTORS think that most buyers with a below average or non-existent credit score can’t buy houses. They are tied to the traditional model of get a listing with equity and sell the home to a buyer who gets a traditional loan. Unfortunately, that’s not the world we live in today. Many realtors have not yet caught on to that yet. Here at Real Property Hero we know both the sides of wholesale market (selling to an investor) and the retail market (traditional listing with an Agent/REALTOR).