Technology is moving fast. It’s shaping the way we live. Revolutionizing the way we interact and communicate. In fact, there’s little that’s been untouched by technology. Industries have been razed and new ones have been erected in their place seemingly overnight. Titans in business have collapsed and folded at the hands of technology. Blockbuster. Toys ‘R Us. Kodak. Yahoo. Nokia. Xerox. Names that once meant something have now disappeared into thin air.
Today, they’ve been replaced by companies like Uber, Netflix, Amazon, Facebook and others that are leading the charge in the wake of a new era. They’re embracing change, reshaping and disrupting business as we know it. Yet, with all the technology and all the change, one industry has been left largely unscathed. Real estate. The truth is that selling your house is still such an antiquated process in this country. It’s based on an old model. One that relies on an endless array of friction.
Can you sell your house fast today? It depends on your definition of fast. Is it as fast as ordering an Uber or renting a vacation rental on AirBnB? Heck no. Can you sell your house as quickly as you can get a mortgage to buy a new one on a site like Lending Tree? Nope. Unless you want to put your home out there on a fire sale for pennies on the dollar, you can’t sell it that fast by any measure. Today, you need to jump through hoops and hurdles. Endless streams of red tape. Agents. Commissions. And never-ending fees. These are the norm. Not the exception.
Unlike transportation, commerce and entertainment, real estate has been slow to change. The legalities and complexities are endless. Sure, there are quicker ways to sell your home. They involve going to companies that we call iBuyers. Meaning, they buy the asset themselves. Companies like OpenDoor, OfferPad, and even, Zillow, have all entered the fray. And for good reason. But does that enable you to get top dollar when selling it direct? Certainly not.
Anyone who knows me knows that I am obsessed with technology. As an engineer, I pour over bits and bytes, bending and prodding them to my will. I spend countless hours crafting intelligent code. Then countless more debugging and optimizing it. And for the past two years, I’ve been trying to solve this problem. It’s a big problem. The question is, how can you create a platform and a marketplace to sell your home in lightning speed and still get top dollar? And how do you do all of that without actually using a real estate agent to navigate the entire process?
That was the genesis of Kribbz, the real estate company I’ve been building for the past couple of years. It’s a platform that uses blockchain, the safest and most secure way to store data — transactions are immutable and indisputable. In the near future, my hope is that it will remove all necessity for forking over a 6% real estate commission just to sell your home.
But today, right here and right now, there are other ways to sell your home quickly. No, it’s not instantaneous like the platform we’re building. It’s a bit slower than that. Yet, if you play your proverbial cards right, there are methods and techniques you can use to get the most bang for the so-called buck. Again, it all depends on your definition of fast. Can you sell your home as fast as you can order an Uber? Not yet at least. But you can sell it moderately quickly. Here’s how.
There are some factors when it comes to selling your home that simply cannot be changed. These impact the speed of the sale. They’re things like location. You hear it all the time. Location, location, location. If your home is in a highly desirable neighborhood or located directly on the water, you’re probably in luck. It will most likely sell fast. Also, market forces. Is it a seller’s market? Or is it a buyer’s market? You can’t really change that aside from waiting it out. But you never know how long each will last.
So how long does it typically take to sell a property? According to Zillow Research, the national average number of days a home spends on the market is 68 days. Of course, that depends on location and whether it’s a seller’s or buyer’s market. But it also depends on the price. If you’re looking for top dollar, expect to wait. And, if your home is in poor condition, don’t expect top dollar. For example, Zillow says that homes in Palo Alto, CA spent an average of 36 days on the market. In Peoria, Illinois? 136 days.
What most people don’t understand is that nearly 40% of all real estate transactions that happen in this country happen using all cash. That means there are no banks involved. It also means that most of the traditional hurdles of underwriting are gone. But wholesalers do something a bit more unique. They help middle man your house. Not for top-dollar. But you’ll get a fair amount. That’s for certain. They’ve lined up cash buyers on their end who tell them what inventory they’re interested in.
All the wholesaler does is put your house under contract and flip it to a cash buyer. Often, this involves little to no money out of their pocket. So why would you flip it to a wholesaler? Well, it’s fast. Certainly faster than attempting to list it with a traditional agent. Now, how do you find a wholesaler? That’s a bit more complicated. They often find you. In their search for distressed sellers, they look for signs that properties are ready to sell at a deep discount.
So what do you do if you don’t want to wait for them to find you? Use one of the national companies like WeBuyUglyHouses or any of the others out there. But keep in mind that you’re going to likely sell that asset at 60 to 70 cents on the dollar. Other ways are to source wholesalers on your own is to search on Google for something like “sell house for cash” followed by your state or your city name. You could also use Facebook Groups or LinkedIn to source cash buyers by searching for “cash buyers real estate” or other similar terms.
Okay. There’s a real difference I need to highlight here amongst real estate agents. While I have nothing against them personally, here’s the truth. Most agents are well-intentioned. They certainly have every intention of selling your home for top dollar. And they want to sell it fast. But is that usually case? Not often. Most lament that realtors don’t quite do their job. The whole list-it-and-forget-it complaint seems to take center stage. And rightfully so. You’re giving up 6% of your home price at the end of the day.
In the US, there are 2 million active real estate agents. Roughly 1.35 million of those are licensed agents. That’s according to the National Association of Realtors. But a very small portion of those licensed agents actually make money. And the longer they’re agents, the more likely they become top producers. You develop relationships over the years and over time your business balloons. And those are the agents you want to go after if you want to sell quickly.
So how do you find a top real estate agent in your area? Simple. Just do a search online. Something like “best real estate agent in los angeles” or whatever area you’re in. Look for realtors with hundreds of positive reviews. Find the top producers and see if they’ll list your home for you. Does that mean you’ll sell it overnight? Certainly not. But going with a top producer who’s already developed relationships is the best chance you have for moving that property faster than the average in your area.
Look, you can’t change the location of your home. You just can’t. But you can change the price. And depending on the temperature of the market, dramatically altering your price can seriously speed up the process. I’m not talking about a small price shift here. I’m talking about a major change in the asking price. If you’re listed at $400,000, dropping it to $350,000 is a dramatic change in price. Dropping it by $5,000 won’t do much for you here.
What most people like to do is to remove the home from the MLS and relist it again. That’s well and good, but there is a history created on your property. Anyone can see the number of days it spent on the market. They’ll also know whether you’re a serious seller or not. Rather than removing it from the market and relisting it, just drop the price. Again, price is a huge motivating factor. Keep in mind that people love to things at a dramatic discount.
Also, understand that your property has to be a great deal compared to other properties in the neighborhood. If you’ve dramatically dropped your price and you’re still pricey compared to the other homes, it won’t make a difference. People want a good deal. They would much rather buy the least expensive home in a neighborhood than the most expensive one. All the upgrades might matter to some people. But if you want to sell fast, it’s mostly about the price.
Most of the time, when people want to sell fast, it’s because they’re underwater. We call these properties distressed. Why? Because, oftentimes, the debt owed on the property is more than the value of the home. That means that equity is non-existent. Plus, when you’re going through a divorce, the death of a spouse, or bankruptcy and other financial problems, it compounds the situation. And when you no longer have an income to pay the mortgage, that’s when you risk losing your home entirely.
It’s not a good situation. And if the bank has threatened you with foreclosure, there are things you can do. The most prominent? Ask the bank to do a short sale. What’s a short sale? First, it relies on the debt being more than the value of the home. But it also counts on all the lien holders agreeing to the sale. So, if you have 3 mortgages, they all have to agree on a short sale. If you have one, clearly your chances are better to short sale your home.
How do you do it? You have to contact the primary note holder. That’s the largest mortgage holder on your home. If you only have one mortgage, great. Contact that bank. Tell them about your situation. Then, find out who you need to speak to in order to get out from underwater. Yes, it’s embarrassing and humiliating. But it’s certainly better than a foreclosure. It’s better than being evicted from your own home.
Okay, the last way to sell your home quickly might be to transfer your mortgage to someone else. But it also means that your mortgage must be assumable by someone else. You’ll need to read your mortgage docs to figure this out. But if it is assumable, then you’re in luck. This could even mean that you could stay in your home and rent it. Is this a common scenario? No. Yet it is possible. You just need to do a bit of leg work to make it happen.
Keep in mind that whoever the new “borrower” is, they need to qualify for that mortgage. And that might take some hoops to jump through. And if you’re truly buried under debt and can’t make your payments, it might not be the fastest way to get out of your home. But it is an option. How long does it take? Again, it all depends. Contact your bank and see if this is even a thing. If it is, you’ll also need to find the person who’s willing to assume the mortgage in the first place.