With inventory at record low levels, buyers are pulling out all the stops to find a home to buy.
We’re seeing an increase of private party transactions. These are real estate transactions where the buyer buys a home that’s not even on the market. The most common scenarios we’ve seen over the last year are the seller casually mentioning to a friend they were thinking about moving and boom their whole social network knows and next thing you know the house is sold before the seller fully thought it through. The other one is a change in family structure whether this is an impending separation or a move to a nursing home. Word gets out from the family to their friends to their social network and the house is gobbled up.
This can be a win-win for both buyers and sellers because there’s no worries about getting the house ready to go on the market, nor a long drawn out listing with strangers traipsing through your home. Plus the commission savings can be huge depending on how much the fees are to draft the contracts.
The only real downside is that the seller could be leaving money on the table if the private-party transaction goes below market or the buyer could overpay if the friends and family deal turns out to be over priced.
Since, we’re a real estate brokerage, this is where you expect us to say you need to list it on the open market to get the best price and you need to pay a real estate agent to help you through this process because it’s too scary to do on your own. But you’d be wrong.
Our recommendation is to engage an agent, like Bushwick, but not in the traditional sense. You want someone who will help objectively give you a market price for the home. Sure you can use a site like Zillow to get a Zestimate, but they advertise their margin of error is =/- 20%. That’s a lot of money to both the buyer and the seller.
Once you have the market price, the buyer and seller are free to sell at whatever price they think is fair, but at least this way nobody will have regrets.
An agent is licensed to practice a limited subset of real estate law. We can take care of the contracts on most transactions and since this is a private party transaction, the rates are similar to, if not less than a lawyer.
There are many other benefits, but the takeaway here is that 1 -You need someone to help with the contracts, 2 – Lawyers know a lot about law, but not much about the real estate market, 3 – Agents add more value to private party transactions and cost the same as lawyers.
Bushwick is happy to help with these types of transactions. Call or email today.