How do I sell my home for fast cash?

Wondering how you can sell your house for some fast cash? Do you feel like you bought a money pit and just want out from under it? Think you cannot possibly sell your house in this economy? Don’t fret!

We have solutions for you. We can help you if you are in the metro Oklahoma area- contact us! If not then this article is for you. Forget about listing your home as “for sale by owner” unless you want it to sit on the market forever. Ditch the Realtors who say they will list your home for a flat fee to get it on the MLS and then do nothing else for you. Those are not the best ways to sell your home for the cash you want or need now.

Read more to learn your options for selling your home quickly to get cash within a month for your home without sacrificing what equity you do have in your house.

Listing on the Open Market

This is usually your best bet if your home is nice and your market is good. Nice is subjective, but also objective. What is pretty to one, may not be pretty to another. However, nice objectively is a well-maintained and cared-for home. A nice home for the market has good bones- the foundation, the walls, and the roof are all good. A nice home for the market has curb appeal- a well-maintained yard with cut grass, green plants, and stately trees. A nice home for the market has already packed up its non-essential items and is ready for photographs to be shared with the world.

Presently homes in Guthrie, OK range from 0 days on the market, meaning they sold the same day or before the agent even placed them on the open market, all the way to 288 days before being sold. The average as of April 2023 for the past 90 days is 55 days. Nice homes sell within a week of being on the market. Homes in need of repair sit on the market- usually because they are overpriced or they are not being properly marketed to their niche audience- investors or first-time home buyers who cannot afford a lot but have time to invest in DIY work on their home.

Be proactive with your life!

Getting behind on payments? Avoid the embarrassment of foreclosure by selling your home for cash now! If you live in the metro of Oklahoma, we will help you find a more affordable home too and help you move. Contact Us!

Open Market versus Investors

Your two best options for selling your home are open market or wholesaling. You can list on the open market with a Realtor who should market your home and ideally sell within the first month of it being listed. When the market is hot homes sell the same day or weekend they are put on the market.

OR you can sell to an investor through wholesaling with a local Realtor who handles wholesales or a Wholesaler. This means that they don’t take a commission from you, rather they give you an After Repair Value (ARV) offer on your home that will also be comparable to the local market of homes in need of repairs. They then take that contract to their group of investors to get the best offer. Those investors pay them for the contract. The difference between the price they negotiate with the seller and the investor is their assignment fee and it’s how they get paid.

On the open market, you will be expected to pay a commission to your agent. You will pay closing costs and sometimes buyers request you pay their closing costs as well. If this occurs you can deduct 12% off the top of your sale price. Then you subtract the amount you owe on the property to get how much you will receive at the closing table.

Not sure which category your home falls into? Take an inventory of your house:

1.      How does your roof look? Are there missing shingles? Do they curl up on the edges? Is there sagging in the roof line? Do they appear damaged? If you said yes to any of these then you likely need a new roof- patch jobs work but only if you can get the same shingles again- matching is not always easy. The average cost of a roof replacement is $9,081. If your roof doesn’t have any of these characteristics, it is likely okay. A home inspector can give you a definitive answer if you aren’t sure.

2.      How does your exterior look? Are bricks chipped, cracked, or falling apart? Is wood exposed to cracking or missing paint? Is the paint peeling? Are the gutters falling off or missing entirely? Are the downspouts directing water away from your foundation? If you said yes to any of these you may be able to DIY these projects yourself EXCEPT for the bricks. When it comes to deteriorating bricks you will want a mason to come in and do repairs to ensure it is done correctly. Masonry repairs, including chimneys, can cost an average of $500- $2500.

3.      How does your foundation look? If you see large gaps, shifted cracks, missing foundation, crumbling, or have an uneven, sloped house- these are all signs you should have a foundation inspection performed. Lenders will not lend to a house with a broken foundation. Many times homeowners who cannot afford these repairs find it easiest to sell to investors who will then rent the properties out because renters don’t care about foundations like lenders do.

4.      How does the inside look? Are there holes in the walls? Can you see daylight through exterior walls? Are there holes in the floors? These are more expensive repairs but all potential DIY projects to save money. Stained carpet? Offering money for replacement at closing often pleases buyers. Need to refinish the hardwood floors or uncover them from the ugly carpet? Go ahead and rip out the old carpet to expose hardwood floors- always a crowd pleaser then offer money to buyers for refinishing the floors themselves- again, buyers like the idea of choosing which stain their floors head up.

If you answered yes to many of the questions above, you may want to consider wholesaling between a wholesaler or Realtor and an investor. If you answered no to many of the questions above, then consider listing on the open market. Read more on choosing a Realtor in my Seller’s Guide.

Listing on the open market with a good Realtor will fetch you the best price possible. However, not all homes belong on the open market. Fixer-uppers that can be DIY projects do well on the open market also. However, fixer uppers that need structural repairs or over $50,000 worth of work are better off being sold off the market to investors- this is where wholesaling comes in.

Fixer Upper?

The big conundrum- to list on the open market or to wholesale?

Should I Wholesale My Home? What Does it Mean to Wholesale or Assign My Contract?

When a wholesaler comps your home it is the same process that a Realtor does when listing your home for sale on the open market. They choose similar homes to your house that are within 250 square feet of your house and 10 years of build date or the same era of architecture. Similar homes are also going to be similar in looks- this means that if your home is a fixer upper it is going to compare to the other fixer-uppers in the area- not the nice homes.

You cannot expect buyers to pay a premium price for a house that needs a lot of repairs. Usually, a wholesale offer will come in around 60%-70% of the After Repair Value minus repairs.

Then the Wholesaler or Realtor will assign the contract to an investor- whoever gives the best bid for the contract. The best bid for the contract is not always the highest bidder, the Wholesaler or Realtor will also look at their ability to close on time or early, any contingencies they have, and the expectations of the investor versus the expectations of the seller.

For example, if the seller has tenants or is living in the property but one investor wants to send in contractors to bid work immediately, then this would not be a good fit, even if the investor has the best bid. Most investors work with a few Realtors or Wholesalers and they will pay more for the contract because they don’t have to handle any of the paperwork and they didn’t find you, the seller.

A lot of time and money goes into prospecting buyers and sellers which is why Realtors and Wholesalers get paid by the Investors above the contract price. Once your contract is assigned to the Investor and you have signed off on it, then the Realtor or Wholesaler will make sure that the Title Company where closing occurs has all of the paperwork they need to bring about closing.

How exactly does the wholesaling deal work?

Most investors follow the formula of 70%- 80% of the After Repair Value minus repairs equals the offer amount. That is how they make their money for the time and money spent up front flipping a house.

You, as the seller, may not think this seems fair for them to pay you so much less than what you think your house is worth. But remember, you could list it on the open market after doing the repairs yourself or sell it “As Is” and let it sit there for months and potentially never sell.

Once they are assigned a contract by a Wholesaler or Realtor they will deposit with the Title Company. Should they pull out of the contract, that deposit and the initial Earnest Money deposit will be given to you, the Seller for the breach of contract. If however, they discover something they did not know about when entering the contract, such as title issues that will take more than 2 months to clear up, or extreme issues with the house that were not seen when initially touring the house then they can contractually get out of the contract. So make sure that the house remains in the same condition during the closing process.

Usually, the investor brings in their team that will assess the property further for repairs needed so they can determine how much they are willing to pay for the property. If the Realtor or Wholesaler is good at what they do, the contract price they negotiated will not need to be renegotiated. Sometimes renegotiation does occur though- unseen damage is usually the culprit of this.

If the basement door was blocked the day the Realtor or Wholesaler came in they couldn’t include any repair estimates in their price point, but then the Investor comes in and sees $20,000 worth of work in the basement alone- expect a price renegotiation to occur.

How do I know if I am pricing my home correctly?

Your Realtor should run a Comparable Market Analysis (CMA) to ensure proper pricing for your house. Once you know what similar homes in your area are selling for, you can price accordingly.

Remember to compare apples to apples, not apples to oranges.

A 2500 square foot, two-story house with a big yard and pool does not compare to the 1200 square foot ranch house with 5 acres down the street nor to the 5000 square foot home on the corner. All three of these homes have different qualities and will all sell at different price points even though they are in the same neighborhood.

It does not work to tell your Realtor or Investors that the house down the street sold for $1.5 million so you want that too. You have to justify your price. If the house down the street is updated with all the bells and whistles while yours is the original Formica countertops from the 1970s and the walls were once white but now look dingy yellow, your house is not going to sell for $1.5 million.

Be reasonable in what your expectations are for your agent and your house.

At the same time- don’t underestimate your house either. Just because you have grown tired of its style and hate cleaning the pool or see no reason to have 5 bedrooms when you can easily do with 2 does not mean your home should be a steal for an investor.

Let’s use the above house as an example of the pricing approach and net profit for listing on the open market versus wholesaling.

The key to a fast sale is pricing!

If you price too low people may wonder what is wrong with the house and you aren’t getting what its worth. If you price too high, no one will want it. A good CMA is worth its weight in gold- use it to be your guide when pricing. If your Realtor did not create a CMA when meeting with you- find another Realtor! This shows they didn’t take the time to do their research and this is not beneficial for you. The market is always changing therefore your price point changes.

Selling on the Open Market versus Wholesale Scenario #1

Subject property: a 3500 square foot, 5 bedroom, 2-story traditional home built in 1920 with a pool and shed in the back yard in a well-taken care of neighborhood. Issues: needs a new roof (see pic below) that is estimated to cost $12,500 and the HVAC has quit working- and it gets up to 105 most days in the summer upstairs- so it’s going to cost $4500 to replace it.

Buyers definitely will not like being unreasonably hot in the home so it needs to be done before putting it on the market. The roof damage is unseen to most, but an inspector will easily catch it- so you can choose to fix it now or offer money at closing to cover the cost of a new roof.

Either way, it will cost you $17,000 in repairs. The Realtor negotiates the contract for 6% of the sales price for a commission which will be split between themselves and the selling agent- the one who brings the buyer. That commission includes the cost of marketing, photography, contract negotiations, walking you through the entire process, and the $99 Supra key box they place on your front door to keep you safe while your home is on the market.

Then you can assume roughly 3% of the selling price for closing costs. Let’s say you place this home on the market for $315,000 (yes you can buy homes like this in Guthrie, OK for these amazing prices!)

Let’s look at the breakdown:

·        Listing price= $315,000

·        Repairs needed= $17,000

·        Estimated Commissions= $18,900

·        Estimated Closing Costs= $9450

·        The amount owed on the property= $125,000

·        The amount you receive at closing for your house= $144,650 (if repairs are billed to close)

Selling to an Investor via Wholesaling

Subject property: a 3500 square foot, 5 bedroom, 2-story traditional home built in 1920 with a pool and shed in the back yard in a well taken care of neighborhood. Issues: needs a new roof that is estimated to cost $12,500 and the HVAC has quit working- and it gets up to 105 most days in the summer upstairs- so it’s going to cost $4500 to replace it.

Now those issues are not for you to worry about. You sign the contract with the Realtor or Wholesaler for, let's just say 65% for our example purposes of ARV – repairs= $204,750- $17000= $187,750.

This means that at the closing table after paying off the loan of $125,000 you walk away with $62,750 in your pocket. Why would you do that? This scenario is far worse than listing on the open market. In an ideal world, you would not agree to the second scenario. However, sometimes life gives you lemons.

This deal would be good for those experiencing financial hardship who cannot afford another month in their home. Those facing foreclosure may agree to this to avoid court and a wrecked credit score for 7 years.

Selling on the Open Market versus Wholesale Scenario #2

This second scenario house is a bungalow with a cracked foundation, the paint is peeling, and the kitchen and bathrooms need updating as well as the knob and tube electric from the 1930s. The hardwood floors need refinishing and the rooms need fresh paint. The gardens are overgrown. You cannot afford to make any changes. Open market or wholesale?

Let’s look at the breakdown for Open Market sales:

·        ARV Listing price= $250,000

·        Repairs needed= $45,000

·        List on the open market (because it comps to fixer uppers- 70% ARV-repairs)=  $130,000

·        Estimated Commissions= $7,800

·        Estimated Closing Costs= $3,900

·        The amount owed on the property= $50,000

·        The amount you receive at closing for your house= $68,300

Same scenario but Wholesale deal:

·        ARV Listing price= $250,000

·        Repairs needed= $45,000

·        65% ARV – Repairs= offer to the seller

o   $162,500 - $45,000= $117,500

·        The amount you receive at closing for your house= $117,500

Do you see how this could be a win-win situation if your home has a lot of repairs needed? You come out ahead by wholesaling your home rather than selling on the open market if your home is a true fixer-upper and not just minor cosmetic issues.

NOT ALL REALTORS CAN WHOLESALE OR EVEN KNOW WHAT IT IS! This is more specialized knowledge and requires further education than a typical real estate license requires. You will need to find Realtors in your area that know about wholesaling. If you are in Oklahoma- contact us! We can help you and have a group of investors waiting to buy!

What about selling to those companies who advertise that they buy ugly houses?

It can’t hurt to call them, but you may find that they will waste your time. Many times those places offer you around 50% ARV – repairs. So now your $315,000 house is worth $140,500 netting you $15,500.

They tend to have stricter guidelines they follow and are not as negotiable as Realtors, Wholesalers, and individual investors.

Why do both Realtors and Wholesalers do these contracts? What is the difference between them? How are they similar?

In Oklahoma, wholesalers are required to get their Real Estate license. In most other states, no license is required. This means that the laws that govern Realtors apply to any wholesaling methods they employ. However, those outside of Oklahoma do not have to adhere to any specific real estate laws and are only bound by what is in the contract.

What does this mean for you? If you are not in the state of Oklahoma, then protect yourself! Have a lawyer go over the purchase and assignment contract with you if you do not understand all of the jargon. Many wholesalers likely use their state’s uniform purchase contract as provided by their state real estate commission, however, not all will.

Make sure everything is in writing. You cannot get scammed if you are savvy and educated. If it isn’t in writing there is no proof- spoken word cannot be proven in court and becomes a “he said, she said” scenario.

Both Wholesalers & Realtors are likely to market in the same fashion- online, direct mail, door knocking, and maybe even phone calls. Most are steering away from phone calls because rarely do people answer their phones anymore for unknown callers.

The Big Takeaway

Doing your research can help you decide whether or not you should list your home on the open market or wholesale to an investor. Assess your house objectively- people buy houses, not your memories. Understand the local market and determine how long you can wait to sell your house. Partner with a knowledgeable Realtor who has specialized knowledge of what you need. If you would like to sell your home quickly, without a hassle then contact us!