With the development of the real estate market, more and more investors choose to buy investment homes for rental income or capital appreciation. However, when it comes to selling investment properties, some owners prefer to sell by themselves rather than hiring a real estate agent. Selling investment homes by owner has both advantages and disadvantages. This article will analyze the feasibility of selling investment properties by yourself, and provide suggestions on how to successfully sell investment homes as an owner.
Lower expenses by selling investment homes yourself
The biggest advantage of selling investment homes by owner is saving on commission fees. Typically, real estate agents charge 5-6% commission of the sale price. For a $500,000 investment property, that’s $25,000 to $30,000 paid to the agent. By selling the property yourself, owners can avoid this major cost. Owners also save on staging costs and marketing fees charged by agents. However, the trade-off is that the owner takes on more work and responsibilities throughout the sale process. From marketing to negotiations to paperwork, the owner becomes solely responsible for all aspects of the sale. This can be manageable for experienced real estate investors, but first-timers may find it difficult without professional guidance.
Market effectively to find buyers for investment homes
Marketing is one of the biggest challenges for owners selling investment properties themselves. Without the agent’s marketing platforms and connections, owners need to find ways to effectively promote the property. Some options include listing on FSBO (For Sale By Owner) websites, distributing print ads in local areas, posting on social media groups and classified ads sites, and holding open houses. It’s important to highlight the investment potential in listings, such as expected rental income, potential for renovation and value-add, and growth opportunities. Professional photos, 3D tours, and video walkthroughs also help show the property in its best light.
Negotiate successfully on your own with buyers
Negotiating directly with buyers as an owner can be intimidating without real estate experience. It’s crucial to set the right listing price from the start by comparing recent sales of similar properties. Price the property competitively but also leave room for negotiation. During offers, aim for a selling price that covers your investment goals. Be prepared to justify your listing price with market data. Learn negotiation basics like making strategic counteroffers rather than accepting the first offer. Having all paperwork ready for a quick close also strengthens your position.
Navigate contracts and paperwork yourself
Closing the sale as an owner-seller comes with contract requirements. Purchase agreements, disclosures, title transfers, insurance, home inspections, and financing paperwork will need completion. Consider having a real estate lawyer review the purchase contract. Require buyers to provide proof of funds before accepting an offer. Disclose all known defects upfront in the seller’s disclosure form. Be responsive during the closing period to move the process efficiently. Being organized and educated on contracts will help avoid delays or disputes.
Selling investment properties as an owner-seller presents trade-offs between savings and effort. With proper preparation in marketing, pricing, negotiations, and paperwork, investors can successfully sell properties themselves. But first-time sellers or those inexperienced may benefit more from agent representation.