So as I sit down to write this, we’re in month 4 of Harris County’s on again off again “Stay Home Work Safe order” or what everyone likes to call quarantine or shelter-in-place due to the coronavirus or COVID-19. There are more articles about the current state of the real estate industry and what is going to happen than you can shake a stick at. One thing they all agree on though is that some people will need to sell their house in these less-than-ideal times.
Now, there was some help in the form of federal aid money that was sent out. Also, there was a moratorium on foreclosures and evictions to give people impacted some time to recover and get back on their feet. If however, you are still in a situation that you need to sell a house, there may be some useful things to remember.
If you haven’t already, you may want to talk to the lender or bank that gave you the mortgage loan. Despite what some people think, banks really do want you to succeed and keep your house. They want this because it is how they make their money. Their business is in loaning out money and collecting interest, not buying and selling of the real estate itself. You may be pleasantly surprised at some of the payment plans, loan modifications, or other options that a bank can offer you, especially if this is your first time needing financial help. Your lender should know also, if there are any special options because of recent events that you may not have heard of yet. If a loan modification will help your situation, talk to your bank about how to request that. One note of caution however, if you request a loan modification, make sure you are educating yourself on backup plans in case it is denied. There are too many people who assume their loan modification request will be approved and when it is not, they do not have time enough to do anything else. Another thing to consider is that a loan modification can help you even if you are already decided to sell your house if it will help to stave off foreclosure or heavy back payments.
When you are down to the decision of how to sell your house, there are a few options. The most common and well known is to call a real estate agent so they can help you to get the best price, get it listed on the MLS and start advertising it to potential buyers. Real estate agents have a responsibility to help you get the best price and get your house sold. Also, they get paid only when your house sells so they have motivation to work hard for you. Make sure you find the best real estate agent for your area and not just a friend or family member. The additional money you will make with a great realtor will usually more than compensate for losing the discount your friend was going to give you.
Selling your house through a real estate agent may take some time however. Aside from making your house show ready, doing as many repairs as you possibly can and showing it to potential buyers, the new buyers will usually need to apply for financing of their own which takes perhaps a month or more. You might speed up that process by restricting buyers only to cash offers but that will reduce your buyers pool considerably. Add to that the current situation and having strangers visiting regularly through your house and the stress goes up even a bit more.
Another route could be to sell using owner financing. This is essentially where you act as the bank for the new owner and they make monthly payments to you. There are pros and cons to this method if you are currently still paying on your mortgage and it is recommended to speak with someone knowledgeable on the subject such as a real estate attorney to set everything up properly. Among the cons may be a smaller buyer pool than an agent on the MLS might have and a bit more challenge advertising your house is for sale. On the bright side however, there are a growing number of potential buyers, including real estate investors who are comfortable with buying with owner financing and are avidly looking for your opportunity. Also, there is potential that you collect a higher payment each month than you owe to your bank turning your house into an income stream rather than a money pit.
Lastly, don’t be afraid to talk to an investor. Find one that has been doing business for a couple years and is willing to talk you through their process. They should be willing to give you an offer without requiring any commitment from you and talk to you about benefits they may be able to offer like a fast closing or making a cash offer.
So in summary, I hope that this COVID-19 or coronavirus passes as quickly as possible but if you find yourself impacted and needing to make adjustments to get life back on track, start sooner rather than later to educate yourself on your options and make plans. Everyone stay safe and take care of each other!
Thanks for reading and please contact us if we can help with your real estate needs!