Investor · Arcata, CA · Member since 2015 · 89 posts · 12 votes
Hey BP,
I'm considering selling my rental property to the tenants that I know and trust who currently live there. I mentioned I would offer them the discount of 5% based on agent fees.
Not having the slightest idea of HOW to actually sell the house, are there any fees or people I should consider getting involved to complete necessary paperwork, etc? As I mentioned, I trust the tenants so I don't expect them to have any funny business, but is selling the home as simple and having them secure a loan and heading to an escrow company?
Any advice/warnings/steps/resources would be greatly appreciated!
Eli
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
10y
Are you saying you reduced the sell price to the tenants by 5% because there are no agents involved? If that is the case, that is giving away money in my opinion assuming the house is worth what you are selling it for. Given the fact you admit you have no experience selling a house, you probably would have been better off hiring an agent if you gave away 5%. A good closing attorney or title company (whatever they use in CA) will be able to guide you in regards to the transaction process. When you remove seller concessions, repairs, and agent fees, the costs to sell a home are relatively minimal for the seller. You need to make sure your tenant has their finances, credit, lending in order otherwise you could be wasting your time. When you say you don't know how to sell the house and have questions about paperwork , fees, etc, I wonder how you came up with the price to sell the home? How do you know if you are selling too high or too low. Too high and the property will not appraise (assuming normal buyer financing is in play). Too low and you are loosing money. How were you able to get the sell price right but not have any idea about the other pieces of selling a house?