Selling your home on your own can be a long and tedious process. It, however, is not impossible, and many people have managed to succeed in doing so. Being an FSBO (For Sale By Owner) individual means you get to keep all of the cash earned during the sale. It also means that paperwork can be overwhelming and challenging to understand.
Saves Costs in Selling your Home
The majority of home sellers close their deals using the help of realtors. While they substantially make the process easier and more convenient, they also charge significant money to close the deal. These charges include a 6% to 10% commission of the sale price plus closing costs.
Assuming your home’s selling price is $500,000, then your realtor will earn between $30,000 to $50,000. If you took out a mortgage loan of $300,000, the total amount payable as the commission would have to come from the $200,000. A house sold for half a million dollars earns you back about $150,000 only. This can be very frustrating to an individual, hence why most homeowners choose to close the sales independently, therefore saving themselves some cash.
FSBOs also need to know a few essential things when deciding to sell. The sentimental value does not equate to its market value; hence a cheaply valued home might give you low returns, while an expensive one might take way too long to sell or not sell at all. Websites such as Zillow and Trulia can be used to help assess the fair market value for your home or instead employ an appraiser. The process should also be handled carefully as it is major financial and legal work.
The entire process of selling a home requires an awful amount of legwork which might interfere with your daily schedule. Since most homeowners have other obligations, such as a full-time job or a family to raise, they might find it frustrating to handle the sale. In this case, a realtor is the next best option to help you maintain a balance in your current life.
Selling a home involves more than just placing a ‘For Sale’ sign on your lawn. You also need to put up an ad on real estate websites, stage the home for an open house visit, take the time to meet potential buyers, carry out the necessary repairs and improvements, and find appraisal companies and lawyers for sale on top of carrying out your everyday work. Handling all of this on your own is possible but not easy, and you might be prone to errors that might lead you to miss out financially.
A mortgage is a loan used to purchase or maintain a home, land, or other types of real estate that use an immovable asset as collateral in the event you default from your monthly payments. Mortgages can be tough to pay back since most have a long payback period.
Most individuals take a mortgage on their home to help them carry out the necessary repairs and maintenance that come with selling. It will also require you to employ the skills of an appraiser who charges $300 to $500 for a complete evaluation report. This, however, does not guarantee that you will receive a loan from your bank or lender.
Veteran Mortgage Loan
A veteran is typically a former member of the armed forces; active military, naval, or air service discharged or released under conditions other than dishonorable. Being a veteran has its perks in that you, your spouse, or your immediate family members are eligible for a particular type of loan called a veteran affairs mortgage loan.
The advantages of this type of loan are unbeatable in that there is no down payment necessary, no private mortgage insurance, has forgiving DTI ratios (Debt to Income), and curbs closing costs. Some VA home loan requirements include an active service of 90 consecutive days during wartime or 181 consecutive days of active service during peacetime.
Selling your home can be an empowering learning experience depending on how you decide to look at it. While it helps you cut costs, it is also tiresome to endure and hence the reason most states recommend the presence of a real estate lawyer or a title agent in the event you decide to forego a realtor.