Real estate sale through an agency and a private investor: pros and cons

The process of selling an apartment or a house is always difficult. There is so much to do: get the necessary documents, bring the property to decent condition and, of course, decide who to choose — a real estate agency or a private investor. Each case has its own pitfalls, but, undoubtedly, there are certain advantages. Let’s try to understand pros and cons of selling real estate through an agency and a private investor.

Specifics of selling real estate through an agency

About 85% of real estate sales and purchases in the United States take place through real estate agencies. The specifics of working with realtors in the country is that experts insist on signing an exclusive contract. Meanwhile, it protects only the interests of the realtor themselves.

For example, if in the future the seller finds a buyer on their own, they will still have to pay a fee to the realtor. The same applies to the buyer. If one of the parties refuses to sign the contract, in this case the realtor will most probably not work with them. Usually the cost of intermediary services is 6%. If the buyer purchases real estate with the same realtor with whom the seller sells, the fee may be reduced, although one way or another it will be at least 3%.

Why most deals in the US are made through agents? Because buying real estate without using the services of an agency or a private specialist in the United States is quite difficult (as well as selling real estate on your own).
Realtors have an exclusive access to the database of all available real estate for sale. In the USA it is called the MLS list. It is a global database that contains information from all states about buildings and premises currently being sold. Therefore, the only option is to use the services of an agent to gain access to this network.

After you’ve made the decision to sell your private property through a real estate office, you should proceed to choosing an agency. There are a lot of companies in this market. You can cooperate with a large and well-known company or a small “family” one. Each agency uses a different method of sales and customer service.

One important point that unites all real estate offices is that, as a rule, only one specialist works with customers. 80% of the success of the real estate sale will depend on this person.

Pros and cons of selling an apartment through a real estate agency

The pros include:

• exact formal fulfillment of the terms of the contract: things stated there will be done (however, there may be exceptions in terms and prices — in this case changes are allowed);
• the property is subject to verification by the legal department and the security service;
• structured agent control;
• the specialist supports clients throughout the entire process (agents accompany sellers from start to finish — stages of finding a buyer, official assessment and inspection of the property, negotiations, signing a contract are accompanied by experts);
• 24/7 consultation (specialists answers all questions that a seller might have — about documents, costs, any specific necessary tasks).

The agency takes care of the correct drawing up of the sales contract. Due to the fact that specialists have deep knowledge of the market, it will be possible to get an accurate assessment of your property. Plus, they use sales strategies that an average house owner is unlikely to know about.

Now let’s move on to the cons. The biggest drawback is fees. Of course, you have to pay for everything, including the services of a real estate agent. The fee will depend on the price at which the house or land is being sold. The fee is a percentage of the final sale price. Some agents often indulge in selling quickly at one decent price, rather than waiting for another, better one. It’s simple — they get more out of a quick sale. The price is lower than expected — it means you are missing out on profit, because you need to pay them a fee.

Other disadvantages of such cooperation are:

• no control — that is, there is no flexibility at all in the execution of the terms of the contract. It is impossible to make the agency listen to your wishes, because it has its own plans and ideas regarding the sale, so you will have to make compromises;
• overloading with work. Really good and effective agents have a lot of clients who need their attention, you definitely won’t be the only one for them, so get ready to wait for a call/meeting;
• increase in costs. In addition to fees, it is likely that you will have to spend money on the home renovations (all agents want houses to look as nice and attractive as possible in the eye of buyers). Legal costs are not excluded either if there are problems with the documents.

Selling real estate through an agency has its advantages and disadvantages. It is up to you to get into it or not.

Sale through a private investor

Selling property to an investor is not such a rare case. Despite the popularity of working with agents, working with private investors is also in demand among sellers. Real estate attracts investors much more than a potential home buyer for one simple reason — its current state. For example, a house may be in a very poor condition and require huge costs to improve. Repairs sometimes cost tens of thousands of dollars, which a seller doesn’t have. In this case, the only way out is to contact private investors.
Another common reason why people choose this option is that it’s much faster. If you need to move quickly and there is no time to look for buyers, fiddle with paperwork and all formalities, contacting investors is a perfect way out of a situation. Selling through a private investor is much more profitable and a 100% correct solution in such situations.
In comparison with selling through an agency, it will bring a bigger profit. In the first case, you will have to spend a lot of time, from paperwork to receiving money into your bank account. On the other hand, a private investor will close the deal as quickly as possible so that the client receives money within 3-5 days.

Advantages and disadvantages

The pros include:

1. High speed of work — you will be able to sell quickly and not wait many months before closing the deal.
2. No additional costs — no need to make mortgage payments, or pay ridiculously high fees. You will keep your savings.
3. Peace of mind — no need to worry about vandals entering an empty house and causing damage. You will quickly get rid of your property.
4. No repairs — no need to do it if you are dealing with an investor. It saves you both money and time.

The disadvantage of selling to an investor is that you won’t get a lot of money and are unlikely to come close to your desired price. This means that you won’t know how much the investor will offer you.
Having studied the pros and cons of such cooperation, you can now choose the most suitable option for you.