Selling Duplex without a realtor (Purchased using REC)

[Gilbert Vigil]

Hi everyone I am currently entertaining selling a Duplex I purchased in Albuquerque a few years back using owner financing. Currently paying down the note and was wondering how difficult it would be to list the property myself. In the event of a sale I assume Escrow and title company I am paying note through would essentially be transferring everything to new owner and note holder gets paid. I take the delta. 

Are there some things I should consider or might run in to or do you think its best to hire an agent.

Thank you for any insight. 

[Robert Carmody]

Your real estate contract should say whether or not there is a prepayment penalty, and most likely there is not any penalty for paying off the note before the call date, or end of the loan term. The payment on the REC is most likely amortized over 30 years, but loan term for some amount of time less than that. Either way, there most likely is not a penalty for repaying the seller or person holding the note before the end of the loan term. You'll want to review the contract to see if there is a due on sale clause. If so, you have every right to sell the property, but must completely payoff your loan at the time of the sale. Typically you would not be able to sell to a new buyer using owner financing without the permission from whoever holds your note first. 

Currently our market is very strong and there is very little inventory across the board. This is especially true with duplex, triplex and fourplex buildings, that are popular for investors, along with buyers that plan to occupy one of the units and secure financing at owner occupied rates, and/or lower down payment programs, like FHA. Therefore, owner financing is not as much of an essential or helpful tool when it comes to marketing the home to prospective buyers as it might be in a softer market, or one with less favorable financing terms and options. If the property is not eligible for mortgage financing, either due to condition or nonconforming zoning, you may need the previous owner or lienholder's permission to resell via owner financing/REC.

When compared to agent assisted sales, FSBOs do consistently sell for less, and the difference is significant and would suggest that the benefit to most sellers is greater, or their net proceeds are higher, when they hire an agent to sell their property compared to doing it themselves. In today's market, which favors sellers heavily, the way to get the best possible price and terms for the property is to list it for sale, on the open market and available to all ready, willing and able buyers to offer on. It's a difference of something like 16 or 18%, I believe. Of course, as an agent, my opinion is from the perspective of one. However, I will say in all seriousness, that I've recently worked with a couple different customers that were attempting to sell on their own, or about to attempt to, and in both instances, they were very pleased that not only were they leaving closing with more money in their pocket, but also with a lot less time and effort involved, than if they had stuck with their plan to do it on their own. I think the assumption is that it will save money, as the commission typically accounts for the majority of the closing fees. I'm sure there are many examples where the seller did save money, but the overall statistics say otherwise. And, despite all of the different resources and sales data that individual consumers have access to these days, the % of FSBO completed sales has gradually declined every year since 2004, and there are fewer FSBOs today than any time in the last 40 years.