How much time does it take to sell a home?
The National Association of Realtors (NAR) says that on average it takes just under a month to get property under contract once you list it for sale. Mortgage data firm Ellie Mae reports that it takes around 46 days to close a home purchase mortgage once the seller accepts an offer.
So if you’re the average seller, you’ll probably have your money in eight to ten weeks if everything goes according to plan.
But I Need to Sell My House Faster!
What if that’s not fast enough? After all, about one in four home purchases fails to close on time, according to the NAR. There are several reasons that a traditional home sale and typical timeline won’t work for every seller, including (but not limited to):
- You might need to move quickly to take advantage of a job opportunity
- A divorce decree might require you to sell your home fast
- You might need cash ASAP
- You could be trying to time a tax break
- Your pets make it hard to show your home
- You value your privacy and don’t want people to know you’re selling
Or maybe you just hate the home selling process all together!
Fortunately, there are traditional and non-traditional ways to speed up the home-selling process and get your money faster. Click on the links below to learn more about each quick home selling strategy:
- Selling your house to a cash buyer
- Working with an iBuyer
- Putting your home on the auction
- Listing with a top-rated real estate agent
Understand that speedy sales require compromises. You could probably sell your home in a day, for instance, if you priced it at half of its value. But you’d be leaving a lot of money on the table.
Each of the four methods listed above has its pros and cons. Once you know what’s involved, you can choose the best way for you to sell your home fast.
Selling Your Home Fast With a Cash Buyer
You might be saying, “I want to sell my house fast for cash!” That’s understandable.
The biggest bottleneck in a home closing is often the mortgage process. It can take weeks for lenders to commission and review a home appraisal, underwrite a mortgage application and prepare the funding and final documents.
But you can close an all-cash deal in less than two weeks. (Note that “all cash” just means there is no mortgage. In fact, it’s not actually legal in the US to close on a property purchase with cash.)
Speed comes at a high cost, however. Most cash buyers are investors looking to resell the property fairly soon. So they need a substantial discount from the fair market value (30% to 50%) in order for the deal to make sense. In exchange for this discount, the buyer usually waives the right to contingencies, inspections, walk-throughs, appraisals, repairs and/or title insurance.
In fact, that’s the major advantage of selling with a cash buyer – poor property condition can be a real sticking point for traditional sales but might not even elicit a blink from a seasoned professional investor.
How to Sell a Home for Cash
There are four steps to accepting a cash offer:
- Sign the contract
- Verify funds to close
- Open an escrow account
- Sign your closing documents
Sign the contract
Note the terms of the earnest money deposit, or how much money you’re going to require upfront from the buyer if the deal falls through. Earn money is usually around 1% to 2% of the sales price.
Consider the following:
- Under what terms is the money to be released to you?
- What circumstances allow the buyer to get the money refunded?
You’ll want to make sure that the closing date is acceptable, and that there are minimal opportunities for the property to fall out of escrow.
Verify funds to close
Because your buyer is paying cash, he or she should document the source of funds to complete the purchase. These can be funds deposited into escrow, or copies of bank statements showing that the buyer’s account contains enough money to complete the purchase.
Open an escrow account
Open escrow with a title/escrow company or a real estate attorney, depending on your property location. With no lender involved, title insurance is not required, although the purchaser may want to buy a policy. The escrow company manages closing documents, transfers the funds, and completes the legal paperwork that records the sale.
Sign your closing documents
Review and sign your closing documents. The transfer will be recorded by the close of the next business day.
Cash buyers’ offers are usually non-negotiable. You might want to have a real estate attorney or agent review any offer you receive to make sure it’s fair and contains no surprises.
Selling Your Home Fast With an iBuyer
The term iBuyer means “instant” buyer. An iBuyer is a specific type of cash buyer – an organization that uses an automated valuation model (AVM) to analyze your property and set the price it is willing to pay.
With an iBuyer, you just say, “I want to sell my house fast. Online quote, please.”
There are no real estate agent commissions, and you can avoid the hassle of listing and the uncertainty of when and if a sale will close.
In general, iBuyers offer a higher percentage of fair market value than home flippers. And they may take on more duties and costs than a traditional real estate agent – such as staging and overseeing repairs. But, according to a MarketWatch study, you end up with about 11% less by selling to an iBuyer than by selling on the open market.
How to Sell Your Home With an iBuyer
Here is the process for selling to an iBuyer:
- Request an offer. There are a number of competitive iBuyers with good reputations, and they often provide no-obligation offers in a day or two.
- Compare offers. Your offer is valid for a limited time, usually a few days. This gives you the opportunity to check the value of your home with other AVMs (automated value models) like Zillow, or to see what a cash-buying home flipper might pay, or to speak with a real estate agent about pricing for a speedy sale.
- If you accept the offer (most iBuyer offers are not negotiable), you’ll schedule a “home assessment” for the iBuyer to inspect your property. The iBuyer usually takes care of any needed repairs and deducts their costs from your net proceeds.
- Move out and close on the day you choose – as soon as seven days from the day you accept an offer. There are no surprises – you know exactly when you’ll close and how much money you’ll net.
Understand that iBuyers have strict criteria for the homes they purchase – including the neighborhood, age, home condition and type of property.
For example, Opendoor buys properties only in the $100,000 to $500,000 range, on lots not exceeding .5 acre. Homes must be less than 60 years old, stick-built or condo (not manufactured) and located only in certain cities.
Other iBuyers have similar restrictions and often operate in specific cities. RedfinNow, for instance, only buys homes in Southern California, Denver, Las Vegas, and the biggest cities in Texas.
The Auction: Sell My House Fast for Market Value
Another way to sell your house fast is with an auction house. The NAR says that selling a home at auction offers a few benefits:
- Buyers are preapproved and ready to buy.
- Auctions operate very quickly.
- You can protect your privacy. Your home does not have to be listed publicly.
- Competition from motivated buyers can get you full market value — or more if there is a bidding war.
- Eliminates the aggravation of showings and open houses.
- You won’t have to negotiate with buyers.
- Auction houses market your property aggressively before the sale.
However, selling a home at auction does have its cons:
- Many prospective buyers believe (incorrectly) that auction properties are distress sales. They may expect to pay less than the market price.
- Auction costs are higher (often, much higher) than real estate commissions.
- The pool of potential buyers is limited to people who can close immediately.
- A “no-sale” auction, in which no one buys the property, can damage your property’s reputation with real estate agents.
- If the property doesn’t sell, you still owe substantial fees to the auction house.
- In an absolute auction, an auction without a reserve price, you may get less than you wanted or expected. But you have to take it. You can opt for a reserve auction, but those are much less popular with buyers.
How to Sell a Home at Auction
Selling a home at auction might yield a high sales price – but the charges involved can take a hefty chunk of your proceeds right off the top. Here is a list of costs you may pay:
- Many auction companies require that you have a real estate agent representing you. So you pay a commission to this person (negotiate a low one since this person won’t be doing most of the work).
- You may also pay a commission to any agent representing the winning buyer.
- Then there are the fees charged by the auction house. Your costs for the whole transaction are likely to run between 10% and 15% of the sales price. One firm, Concierge Auctions, represents higher end properties. And its total fees can reach 20% of the sales price.
- While auction houses claim that they charge “no commissions,” they aren’t telling the whole story. They typically charge, in addition to the fees that the seller pays, a “buyer’s premium” of 10%. Naturally, buyers consider the total cost of purchasing, so they bid less when they know they have to pay a premium. For all practical purposes, the buyer’s premium comes out of your proceeds.
If your property doesn’t sell, you still have to pay a “no sale” charge. If your home does not attract bids or the bids don’t reach your reserve price, you’ll compensate the auction house for its marketing costs and efforts, and these charges can run into the thousands of dollars. Concierge Auctions charges a $35,000 no sale fee. But other companies ask much less, so verify this potential cost before listing.
Traditional Strategies to Sell Your Home Quickly
One way to sell your house fast is to do it the old-fashioned way – by using a traditional real estate agent to market your property and get it into escrow fast by pricing it very competitively. A top-rated agent who specializes in your neighborhood could bring a few advantages.
- He or she is probably already working with buyers who might be perfect for your home.
- An experienced neighborhood agent knows how much you’d need to discount your home to sell it fast.
- Your agent can screen buyers to make sure that they have cash to close or mortgage preapproval to close quickly.
- A top agent has an aggressive marketing plan for your home and can achieve high visibility. Note that this might not be the best approach for those who want to leave town without publicity.
When there is demand for homes in your neighborhood, a top agent should be able to sell your home fast if it’s competitively priced.
How to Sell Your Home Fast With a Top-Rated Agent
Selling with a top agent can get you a fair market price (or better if your market is heating up). You’ll have help with items like inspection, repairs, negotiating, price setting and more. Real estate services range from DIY listings to full-service selling. To move a home fast, you’ll probably want a full-service provider. Your agent can then take on most of the headache-inducing activities associated with selling a home.
Here’s how you sell with a traditional real estate agent:
- Find an agent. If you have lived in your neighborhood for a few years, you probably already know an agent or two who is very established and specializes in your area. Or you can easily locate a top agent here, using Clever’s trusted real estate agent network. Clever pairs sellers with top local agents who give them a full service selling experience, including everything they’d receive if they paid a full 6% commission – at a significant discount.
- Get an inspection to get ahead of repairs. Home inspections typically cost $400-$600, but give you the opportunity to address major issues before you begin the selling process.
- Take care of any quick repairs and minor cosmetic work to increase your home’s curb appeal. Clean and de-clutter to make your home look larger and airier.
- Stage your home to maximize your home’s impact and sales price. 31% of buyers increased their offer on a home by 1-5% because it was staged. Your agent may include staging in his or her services. You might want to negotiate this and other services when you set the commission.
- Price your home competitively. This is where an experienced agent who knows your area well can be really helpful. He or she can help you hit that sweet spot – pricing for a fast sale without giving away too much.
- Receive offers. Counter until you reach an acceptable compromise. Pay special attention to earnest money, closing dates and extensions (many contracts include automatic extensions when buyers miss deadlines, and you want to avoid this).
- Your agent will open escrow and handle the selling paperwork for you and hold the buyer to all deadlines and commitments.
- Sign your closing documents, receive your sales proceeds and transfer the property.
The downside of listing the old-fashioned way is the uncertainty. Homes fall out of escrow because of property issues, unqualified buyers, or just life being unpredictable.
Selling a Home Fast: Best Strategy for You
There is no right and best way to sell a home fast. But this quick rundown should help you find the most advantageous way for you.
The cash buyer might be the best method when your home needs too much work for a quick sale. There are mortgage programs that allow buyers to finance a home purchase plus repairs, but these loans are slow to close. If you know your home won’t pass an inspection, the cash buyer might be your only viable option.
The iBuyer costs more than selling your home on the open market, but iBuyers do take the gamble out of selling. You know how much you’ll get and when you’ll close. And the iBuyer costs, a discounted price and service fee, are much less than the extreme discount a cash buyer is likely to demand. For those whose homes meet the strict requirements of an iBuyer, this might be the best compromise of speed and selling price.
Real Estate Auction
Real estate auctions are costly and risky. But niche sellers with high end properties, specialty homes or distressed homes can unload their houses fast and in some markets get better than fair market pricing.
Traditional real estate agents come in many guises, from seasoned professionals to newly-minted licensees. To sell a home fast, you want the best and most experienced agent available. Someone with many contacts among agents and potential buyers, an agent with a strong work ethic and reputation. If you can afford to gamble a little with your timing, you can achieve the highest price with a traditional set up.
Clever’s full-service experience means that, unlike with other discount brokerages, there won’t be any “service gaps” you have to cover yourself. Other discount brokerages don’t oversee open houses, and may even conduct all business online.
Even better, sellers who list with Clever pay just $3,000 or 1% in listing fees — helping you save thousands without compromising on great service!