The Current Market
Are you ready for the market to calm down a little bit? I know I sure am and it has actually. For the past two years I am sure all of you have heard about multiple offers and how people have been getting into bidding wars. That has calmed down a bit, especially over the $300K price range. There are a lot of opinions out there; different markets, different house conditions, different schools zones, etc. All of these factors play into the 'days on the market' for a particular property. One misconception (out of many) is that all agents are just "killing it". Granted, most are busier now, but the thing the general public doesn't consider is how much time goes into a deal and "if" it doesn't work out, the agent gets paid nothing.
Here is an example. I show my buyers 5 houses, they make an offer. They are one of 8 offering parties. They don't get the house. We go out and look at another 5. Same thing happens. Same thing happens. Same thing happens.....until maybe after the 5th try or so, we get the house! Well, we just worked 5 times as hard for the same amount of money. So in my opinion, agents aren't really making that much more money, but are definitely working much more.
Different Business Models
So you have all seen by now at least 4 or 5 companies enter the marketplace...I will not name them, but feel free to call me to discuss them in particular. Let me say this straight away....we live in a free and open-market society and all business models have a right to compete. I will go a bit further and say that some of these business models are "indeed" a better fit for certain types of consumers....I'll go into that later. So, please know I am not bashing any company out there, but some do offer non traditional business models and you need to know what they are before signing anything.
There are 5 companies that I see a lot of commercials for now. All of them offer buying your home (at fair market value) and a few may offer to help you move into a new home before selling your current home. Let me first point out that fair market value is very subjective, so if you get an offer, by all means ask around and see if the offer is indeed in line with other opinions. The appeal with selling your home to these companies is that you do not have to put your house on the market. You do not have to deal with showings, keeping the house clean, putting the pets away, painting the dark brown walls or cleaning the dog hair infested carpets. You bypass all of this by selling directly to these companies.
This is very appealing to people for the obvious reasons. The caveat is that you will likely lose a lot of money. To some people it is worth it and that is why these companies are around. If you have young children and 3 dogs and the house smells like an animal farm, you may just say "forget it", it's worth x amount of money to walk away with a lot less money than to clean it up yourself and go through the traditional process of selling. The majority of homeowners out there are probably not willing to take a huge financial loss though. I did submit my own house to one of these companies and they offered me $30K less than a 'month old' appraisal I paid for when I refinanced my mortgage. They had a certain percentage fee on top of that as well. So, if I were going to sell it to them I would have essentially taken a $60k loss.
Then there are the companies that will offer to purchase your house and buy a new house for you. The details are not fully known to me, but you can look on social media and see reviews about how you will pay them back for the "new" house with a daily interest fee included when you buy it back from them. This type of service eliminates you from having to submit a contingent offer on a home. A contingent offer is a whole other blog post. Again, this is a legit way to buy and sell, but it is very complicated and it may not be for everyone because you are trading convenience for cash.
So you may wonder why these companies are so willing to buy your house for market value. What's in it for them? It has to be profit right? These programs may work for you, but you have to do your homework and do the math.
What Should I do now?
You should know as a homeowner that there are a lot of options out there for you and you have every right to contact any company/agent you wish to discuss your needs and wants. Some people may call these companies directly and say, okay...let's do it. Some people may call and get their proposal, then talk to other folks, get theirs, then make a decision. Some consumers may just want to go the traditional route with a super large firm. Most people will call an agent that a friend or family member has recommended. Just remember, you as the consumer have choices. You are in the driver's seat.
My personal opinion; from selling real estate for almost 15 years is that real estate is more of a personal business matter than a straight up business transaction. There is a lot of emotion that goes into buying or selling a home. I think someone needs a partner to help them through a transaction, not just "being 'the' transaction". I have always put on my marketing materials that Real Estate is about Relationships and Representation. Make sure the next agent you speak to has a similar philosophy.