How to sell a house?

Question

This *may* be off-topic here, it certainly isn't what people ask about on this forum!! Feel free to move it if there is a more-appropriate group for it.

I'm in California, and I've been renting dad's house out to this family for over 5 years now; they are wonderful tenants... they have two daughters who are in high school, one is getting ready to enter college, so they are planning to stay there for many more years, as they love the house.

My dad passed away in 2018, so I am now full owner of the house. I've decided to just sell the house to them, get out of the landlord business and just invest the money, taking a portion out monthly to cover our expenses until we hit 70 and start collecting social security (assuming that it still exists by then). They've expressed much interest in buying the house, since I brought the topic up.

However, I have *no* idea what I need to do, to do sell a house, I've never done this before!! Do y'all have a guide to this process? If not, can you provide some guidance? I'm hoping to avoid doing the full broker route, since they take several percent off the top. I already know I have clear ownership of the property (I certainly know its history for the past 50 years), and I know their finances inside and out...

Any advice would be very welcome here!!

Hiljin Sabangan · Answer

Daniel,

To answer your question about hiring an agent vs. only going with a title company...

What an agent will do for you is serve as your fiduciary, that is help you receive the best price, terms, and work for your wants and needs during the whole transaction. In addition, an agents duty is to help facilitate the process of transferring title (loan, legal, title) from seller to buyer. In other words, the agent will do all of the heavy lifting and keep you in the loop if there is any issues during that process. If there are any issues, you agent will take care of it.

Now going with a Title Company as a FSBO listing, if there are any issues that comes about during the due diligence period, you as the owner will have to deal with directly.

The good part about your situation is that you have a good relationship with your potential buyers & that you aren't looking to get top dollar for your property. So if you do not anticipate any issues during that process of transferring title, going FSBO route is beneficial.

Hope this helps!

Jonathan Minerick · Answer

@Daniel Miller You  may also want to look into getting a Transaction Coordinator - they will have access to all the proper forms you need and while they will not give you advice, they will often be able to provide general guidance on how things work. Typically they cost ~$450 (slightly more if they are assisting the buyer as well) and you can likely find many in your area.

Forrest Williams · Answer

Do not use the Zillow price under any circumstances. It's accurate MAYBE 20% of the time, and that's generous. Find some similar houses (same number of beds and baths, same square footage, if they both have garages, etc.) and get a price off of that.

If they are serious, you can also try a rent-to-own strategy where you hold the note. That way, it's their house, but you can make more money off of it by having them pay you down over 10/20/30 years or whatever you decide.

JD Martin · Answer

I would sign a deal with a seller's agent and negotiate the buyer that you're bringing in to cap some of the commission. Agents do this all the time with "FSBO" and similar, if the owner brings the buyer. 3% of something is better than 6% of nothing.

I wouldn't think of the agent fee as getting money for nothing. You don't know how to sell a house and you don't want to have to figure out the legality of it, which is why you use an agent. Guess who has insurance if they screw up the documents? The agent. Guess who can be held legally liable for misstatements and other issues? Yup.

An agent (a good one) can give you a worthwhile market appraisal and if these people don't want to buy, sell it to someone else who is qualified.

PS: Don't be surprised if your wonderful tenants won't buy the house unless it's at some steep discount from market rates.

Gina Riccitelli · Answer

Hi Daniel, you and your wife are obviously kind-hearted people but I think your emotions are getting the best of you and potentially your pocketbook.  The proceeds are for your and your wife's financial future. While we all hate change, the renters will fall in love with another house, they'll be okay. I would suggest you contact 3 Realtors for a Comparable Market Analysis price evaluation.  They will want you to list your home, but don't feel pressure as you are just interviewing them to hear what they have to say.  They may have some good input for you.  Either way, I believe you absolutely need a professional advisor protecting your best -long-term- interests, whether a real estate attorney or agent. You don't need to pay full-price but don't penny-pinch either.  All the best to you and your family.

Forrest Williams · Answer

Sounds like you have some serious buyers whom you have a great relationship with. If you don't need every last dollar, I'd go ahead and cut them a deal, since it sounds like you're set for a while and it will save you the headaches of landlording. If you don't want to involve an agent, you can try to get the bank to appraise the property. If the buyers need a loan, this will happen anyway. Ask your bank if you have a good relationship with them, or get a local one to do it for you. It can be tough to estimate a place like that yourself if you don't have comps. It sounds like you're on the right track.

Daniel Miller · Answer

Just for some background for all of you here, regarding the reliability of these tenants, as well as my goals for selling the property...They have lived there for 5 years already; they are from Germany, where they themselves own several properties that they rent out, so they understand the value of a property, and maintaining it.  They *love* the house!!Anyway, last year when I visited the house to deal with a fence repair issue, I chatted with them for awhile about things, and Silke (the wife in the family) was talking about all their plans, the older daughter is graduating from high school and is going to community college for a couple of years, then planning to go to U.C. Davis (I don't recall what field); the younger daughter is still in high school, but plans to go to college as well.  I asked "so you're planning to stay here for a *long* time, eh??" to which she replied "Oh yes, we love this house, the girls don't ever want to go elsewhere!!"...Wow... ever since my dad passed away and I inherited the house, my plan had been to let these folks stay as long as they wanted; we retired last year and paid off *our* mortgage, so the $3300/month that they are paying for this house is *easily* paying our bills now; we aren't even collecting social security yet (waiting for 70).  Anyway, once they moved out someday, I was going to sell the house at that point.  It is 30 miles from my home, typically with nasty traffic both ways, and I don't really want to deal with it any more.But that conversation got me thinking... if they're going to stay there for many years anyway, why not let *them* buy it, and stop dumping money into rent.  So I made that proposal to them; I emphasized that it's *just* a proposal, if they want to keep renting, that's fine with me.  Of course, I *know* what he earns, from when they first applied!!  They can *definitely* afford it!!  So the whole deal is very low pressure; I'm not intending at this point to consider anyone else to sell to.  And I have *no* need to squeeze every last dollar out of the house; it is likely to appraise at roughly $1.5million, and it will all be "found" money for me... That doesn't change the other facts, though; I still don't know anything about how to do everything legally, so I will need other advice, as you have all recommended...

Daniel Miller · Answer

The problem that I'll have estimating price on this house, is that it is *far* larger than other houses in this area; I think I mentioned this previously; when I had the appraiser provide an assessment for me, in October 2018, he wasn't able to find comparable properties anywhere in the area; he ended up using properties in other areas of the city for comparison.  Also, this house has solar, and has low-maintenance yards (no lawns), both of which probably increase the property value to some extent, and are not common in the area.I think that if I decide not to go with an agent, it may behoove me to get a new, current appraisal; that will be a pretty un-arguable price to work from.could y'all comment on hiring an agent, vs only retaining a title company??  What *won't* the title company do, that the agent will??

Brian Garlington · Answer

@Daniel Miller

You can actually have more money go into your pocket by listing with a Realtor. Here's the analogy;

Have you ever bought a watch in a jewelry store Daniel? Did you expect to pay a fair price? You expected to pay a fair price because a salesperson was involved. Anytime a salesperson is involved, you expexct to pay a fair price.

Now let's say Daniel that you bought that watch. It's a good looking watch. You never put it on. It is in the original packaging. You have the receipt; it is in the jewelry store bag. You put it up for sale by yourself at your garage sale. Do you expect to get the same price as the jewelry store?

No? Why not? Because there is no salesperson involved! Anytime people buy directly from an owner Daniel, they expect to pay less! We just can't change that.

Let's say you put the watchin an auction, and I could get you a couple of bidders. Perhaps lots of bidders. What do you think would happen? Would the price go up or down? Up, Right. Do you think it might even go for more than at the jewelry store? It could, couldn't it?

Ultimately, you'll have to make the choice that's best for your situation Daniel. As a Licensed Realtor that works primarily here in the East Bay I had to speak up when I saw this thread my man.

Brian Ellis · Answer

Im am selling one of my houses, I put an ad on facebook and let everyone know I will not be paying any agent commissions. Had a full price offer a week later after showing it to multiple people.

You just need a lawyer who is willing to represent both parties in the transaction.

This probably saved me 30k in commission fees.

Also, I would think twice about the tenants buying it. I just had a scenario where they expressed interest for months and when it came time to sign and put the deposit down they backed out. Fortunately it worked in my favor because I received a higher offer from someone else. So my suggestion would be to make sure you have your market value correct before you list it.

Im not against using a realtor, especially if you have no experience. But personally, I wont use one.

How to sell a house?

Most Popular Reply