Owning real estate in California is truly as authentic as you can get to the American Dream. However, selling your home can quickly turn into a nightmare if you don’t know what you’re doing. Do you need a real estate license to sell houses? The short answer is no, you do not! That is called a FSBO (For Sale By Owner) listing, and here is how that works.
However, what you do need is some critical information in a few areas. We’re here to help.
Before you put your home on the market, there are a few things you need to know -- regardless if you use a real estate agent or not. We’ve compiled our shortlist of the top 3 things homeowners in the Golden State need to know as they embark on the journey of selling their home.
Mortgage Rates
The first thing you need to know might not come as a surprise -- it is exactly what a real estate investor would be checking. But knowing what the mortgage rates in CA are is critical information for your own home sale. If they are high, then your pool of potential buyers might be tighter, or you need to be extra careful about including a financing contingency in any offer you accept. You may also want to continue to accept backup offers. If they are low, then you may be able to induce a bidding war with a larger pool of buyers. You can also expect to price your home a little higher due to the (likely) higher demand for your property. (Another point to check is if mortgage rates in California are higher or lower relative to the national average, to get a sense of where out-of-state momentum might be swinging). Understanding the composition of your pool of potential buyers is incredibly important. You don't need a real estate license for that!
Comparable Home Sales
A savvy seller also keeps tabs on the sales of comparable homes in their neighborhood. You should be monitoring properties similar to yours (square footage, rooms, amenities, year built, aesthetics, etc), as close as possible to where you live. Track listings and sales over a period of time to learn the range of sale prices and note when they’re increasing or decreasing. You can also get a sense of how many days on the market each home lasts, to help set timeline expectations for your own home. You may also discover what small details makes some homes, seemingly similar to others, sell for a more desirable price — and apply that to your own! You can always contact a local real estate broker and pose as a buyer to gather some intelligence.
Comparable sales are your bread and butter for projecting (and timing and pricing) how your own sale will go. If you do not have a real estate license then you may not have access to the MLS so it may take a little more time, but it's doable.
The Gotchas
The final “need to know” items are the sneaky little issues in the real estate business that can turn a successful sale into a fiasco. You need to understand all of the costs, and how much they will amount to, to sell a home. You can expect to siphon off about 7% of the final sale price in CA, which often comes as a shock to homeowners not well versed in the real estate industry. (It could be less if you indeed forego the services of a licensed real estate agent, but you probably won't be able to capture a higher sale price without a listing agent). There are also risks of a real estate transaction falling through, with a lot that could transpire while your house is under contract. Of course, there is homework on your end that you must see through in order to sell your home. Appraisals, repairs/renovation, staging, disclosure documents, and possibly more steps sit between you and the finish line.
You need to make sure you’re aware of anything that can eat up time, cost additional money, or introduce risks of an unsuccessful sale process — so you can preempt them accordingly. No real estate license prepares you for this, although the insight of an experienced real estate professional certainly would help. It does take some practice to get good at selling real estate, so even the most self-educated property owners should not feel any shame about contacting a real estate brokerage before acting as their own agent.
Conclusion
If you’re ready to take the next steps in selling your California home, we’re here to help. The grand irony of a list of things that homeowners and real estate investors should know (before selling), is that a great real estate agent is already proficient in those topics. Insight into current market prices, deep knowledge of buyer pool composition, and awareness of every hidden misadventure are all things you should confirm a real estate agent is prepared to provide you before awarding them your listing.
At TrueParity, we specialize in helping homeowners like you connect to premier real estate agents. We’d love to help you too. Visit our next generation real estate platform today to sell real estate quickly for top dollar.
Know someone in California selling their own property without a real estate license? Send this to them so they can make sure their property sells successfully!
