As I had previously shared, the family made the decision early this year to explore the potential to sell our home and rent another while we decided what our next steps would be here locally or elsewhere in the world. Given my awful previous experiences with Real Estate and timing, I had been growing very cautious about the current housing market and having a property with some equity made me consider alternatives to improving our overall financial condition by reducing debt and becoming less dependent on banks in the future. I had seen how hot the local market had been recently as prices had seemingly increased with little inventory available at any point in time.
I started my research online with all these data points and after exploring with a real estate agent in 2018, my initial concern was the amount of commission needed to be paid to sell a home. 6% of the selling price seemed pretty high and a relatively large part of the equity that would be better spent elsewhere. My first step was to weigh my options in this front. I had read about alternatives where the commission was reduced significantly for less services provided to market the property. I thought that the market was hot enough to make a good sell without these services. However, after researching more closely, I had read some bad experiences of not using the traditional model.
I then found an option that a famous online provider would actually evaluate your property and make you a cash offer within days. Given the avoidance of using an agent, I thought it would be interesting to explore so I signed up and requested an offer. I knew it would be lower than market value but my thought process was that I could give up to 6% off the value and still save on commissions. However, not only did the offer come in 10% below what I would ultimately list the property (7% less than selling price) but they also wanted almost 10% for fees on top of the underpriced property! I understand that the risk they bear is large given the lack of diligence on the deals but I thought that was way too much.
As I considered the last alternatives of just calling an agent to go through the process, I actually got an email from my lender which provided a “discounted” selling service with agents. Since I had not yet gone through the process, it was worth a try to save up to 2% through their agents instead of the ones I have seen in the area. I immediately got an appointment to discuss the process and assess the market and home to start the selling process. Only a few days later, we were on the market with some awesome pictures done to update the listing!
Within 24 hours, we had 7 appointments setup to visit our property which were done only 2 days after listing. No further proof of the hot market came for us when a day after the appointments were made, we received three offers. This is when the journey got interesting as they were all different. One was at full price with a 30 day close while another was for $5k below listing. The last was $10k below listing. We obviously went with the highest as all were pre-approved although the timing was concerning given we had no place to really go as we had not thought it would be so fast.
Our process had just been accelerated so we started our own search for a place to live which was even more eye-opening. The inventory of homes in the area we were looking were extremely limited with less than 15 options available the first day we started and only about a dozen more added to the market in the weeks we were searching. In addition, it was clear of how hot the market was as many of the attractive ones were getting offers just as aggressively as we had saw in our own home. We saw ourselves stuck in the middle of selecting whether to wait for something better or risk losing something that was sufficient for the family.
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