Henderson, NV · Member since 2017 · 2 posts · 0 votes
Hi BP, longtime forum reader first time forum poster. We live in Vegas and we're planning to move into our rental property and sell our primary residence while the market is still up. Word got out about our plans and some friends and a neighbor have shown interest in buying - even if either party doesn't buy our house I'm considering FSBO to maximize profit from sale to reinvest in more rental property. Thoughts?
I did exactly that last August so I could live in the rental for two years before selling. I got a solid contract off the internet and used fidelity national tile on rainbow, they too were awesome.
I didn’t try too hard, I mentioned it to a few friends and they mentioned it to a couple. A friends parents were looking for a single story car garage house with a pool and a deal was struck. I made the price attractive and the deal a little less negotiable by simply stating a “net to me price”.
Honestly I don’t know if I got any more than I would have with a realtor but anything I didn’t save my friends parents saved instead. Unless you price it perfectly and find buyers who aren’t going to want some of that savings, or already have a realtor you might end up saving 1%? Maybe 2% compared to the realtors that will list for 1.5%. If your house is over $400 or $500k and you like meeting new people, give it a try. I don’t think I would have bothered on a $200k house.
Ps. Remember if you’re going to sell the rental eventually, you have to live in at least 2 years and then you’ll save capital gains tax on the percent time it was your primary, not 100% like you would if it was your primary first.
If you have a solid buyer, who will enter into a contract with you to buy, without you paying realtor commissions, great!
But if they're working with a realtor, you may have to pay their agent's fee. Same thing if an agent approach you with their client (assuming you are going the FSBO route)
Now, you still want to talk to several agents to list your house. If you realized that you do not know your market well enough or not experience enough, paying that listing agent's fee may make you more $$, than selling by FSBO. (with less work)
I did exactly that last August so I could live in the rental for two years before selling. I got a solid contract off the internet and used fidelity national tile on rainbow, they too were awesome.
I didn’t try too hard, I mentioned it to a few friends and they mentioned it to a couple. A friends parents were looking for a single story car garage house with a pool and a deal was struck. I made the price attractive and the deal a little less negotiable by simply stating a “net to me price”.
Honestly I don’t know if I got any more than I would have with a realtor but anything I didn’t save my friends parents saved instead. Unless you price it perfectly and find buyers who aren’t going to want some of that savings, or already have a realtor you might end up saving 1%? Maybe 2% compared to the realtors that will list for 1.5%. If your house is over $400 or $500k and you like meeting new people, give it a try. I don’t think I would have bothered on a $200k house.
Ps. Remember if you’re going to sell the rental eventually, you have to live in at least 2 years and then you’ll save capital gains tax on the percent time it was your primary, not 100% like you would if it was your primary first.
I'm considering FSBO to maximize profit from sale to reinvest in more rental property. Thoughts?
Cool. I always sell FSBO after going the traditional route a few times. Horrible experiences having to go over to turn down heat, turn off lights, close wide open exterior doors. Bored and careless realtors browsing wrecked my experience.
I offer mine a la carte. If no agents are involved, it's this price. If you have an agent or want closing cost help, add to the price. To do this though you have to be priced well and have a good handle on what your value is.
Have the PSA figured out. Nothing worse than 2 DIYs not knowing how to transact. I just use the MLS buy and sell customary in my area, writing NA in the agency spots. Good luck!
If your solid buyer sent you an offer and you accepted their offer, would either of you know what the next steps are? Realtors aren't just there to advertise and show houses, they are like little attorneys who take care of a large stack of paperworks with all sorts of disclosures, contingencies, and the like to decipher through. If you have a buyer and need an agent to execute the paperwork and the paperwork only for you, that's a pretty inexpensive proposition. There are also ala carte agents. The more service you want, the more you are charged. I would definitely suggest the use of an agent. Letting the agent take on 100% of the liability for the paperwork aspect of the transaction is easily worth a couple thousand dollars.
In addition, statistically, you will make more money listing with an agent. When you pay an agent, they market your property to more outlets than you will, resulting in more eyes on your property, more showings, and more offers. Having a single buyer gets you (the seller) no leverage. Having multiple buyers gets you all the leverage you need to walk away with top dollar. If you have a savvy buyer, they will write the offer with a bunch of contingencies and terms that may not be so favorable to you. Then there's the inspection/repairs phase (more negotiations) the appraisal (what if it comes in low? What if it comes in high?) and conducting the closing activities. Unless you're already familiar with all of the contracts and disclosures or plan to sink a significant amount of time into getting familiar with the paperwork required as well as the steps of the process, AND you have a buyer, AND you have agreed upon terms for the sale, I suggest you hire an agent. It doesn't have to be 6% if you don't think that's a fair amount but I can assure you there is value in the services they can provide to you.
Thanks everyone for the valuable input. Didn’t know it was possible to pay a 1.5% listing fee, we’ll definitely look into that. We do plan to live in the rental for at least 2yrs to take advantage of “no-capital gains” on the sale.