Less Hassle, Faster Sale for Off-Market Sellers
Why should a seller consider selling off-market?
The usual procedure in selling a house involves a real estate agent listing the property on the multiple listing service “MLS.” Selling a property off-market means that it is not listed on the MLS. Off-market sales usually do not involve real estate brokers or agents. Off-market sales have many distinct advantages over traditional MLS-sales.
Sellers do not have pay commissions to real estate agents or brokers. At the conclusion of typical MLS transaction, the seller will pay their real estate agent and the agent for the buyer between 3 and 5 percent of the sale price. By selling off-market, without a real estate agent, the seller will avoid needing to pay real estate commissions. This can save the seller thousands if not tens of thousands depending on the sale price.
Off-market deals close a lot faster than houses listed on the MLS. In an MLS sale, after the seller accepts a potential buyer’s offer, the process to complete the sale takes about 30 days. During these 30 days, the buyer’s lender, insurance company, and the buyer will conduct inspections of the property, complete an appraisal, and often require the buyer to jump through a series of hoops before allowing the buyer to receive the loan and purchase the property. Sometimes, problems come up several weeks into the closing process. For example, the buyer’s lender may determine that certain repairs will need to be made before it will loan to the buyer. The buyer and seller will negotiate who pays for pre-sale repairs. Alternatively, the lender’s appraiser may determine that the property is not worth enough to warrant the originally-proposed loan. These types of obstacles can delay, or complete prevent a deal from closing. Off-market sales can close in a matter of days. Because the buyer typically pays cash, no lenders with untimely demands are involved and the seller will usually not be responsible for any repairs.
Avoid making costly repairs. When listing a house on the MLS, sellers are typically advised to make their homes appealing to the average buyer. Decades worth of personal belongings will need to be cleared out. The seller will probably need to make certain repairs and upgrades before a house is shown by a real estate agent. Most buyers purchasing properties listed on the MLS will run from homes that “smell weird,” have moisture or roof problems, or lack modern updates such as central AC. Fixing and updating a property is expensive and stressful. Picking the wrong contractor can lead to cost overruns, shoddy work that needs to be repaired by someone else, and unexpected delays in preparing a property for sale. A seller does not need to deal with any of those things when selling to an off-market buyer who will typically buy the property without the seller needing to make any repairs.
Avoid paying closing costs. In an MLS sale, the seller will pay about 2 percent of the sale price in closing costs. By selling off-market, the seller can avoid paying some if not all closing costs.
Please be advised that nothing in this blog constitutes legal advice. If you have particular concerns that you wish to have addressed, please contact a lawyer directly so that your specific circumstances can be evaluated.
