In Michigan, there are several ways a homeowner can go about selling their house such as What are my options for selling my house? or other means.
In Michigan, as well as nationwide, there is the ‘traditional’ home sale approach, and then there are alternatives.
While people sell their home using a realtor who lists the house on the Multiple Listing Service (MLS), a smaller percentage of people choose to try to sell their home themselves or sell via a wholesaler or directly to a cash house buyer. Here is breakdown of the benefits and drawbacks to each option:
- Note: this is intended to serve as a reference but not as a comprehensive guide
Realtor / MLS:
MLS stands for Multiple Listing Service. According to mls.com, the MLS is “Multiple Listing Service is composed of hundreds of database computer systems located throughout the USA for real estate agents to showcase their available real estate listings that are for sale and for lease…”.
Listing your house on the MLS requires the use of a real estate agent. The MLS has controlled access and, therefore, not everyone can list homes for sale themselves.
When you sell the traditional way, you work with a realtor who will list your house on the MLS. The realtor may use various marketing techniques such as open houses and yard signs to increase traffic to your house. Selling through the MLS is different than What are my options for selling my house?.
With the MLS listing process, buyers will work with a real estate agent to schedule showings and submit offers to the listing agent. The listing agent works with the homeowner to navigate the sales process and the buyer/selling agent works with the buyer to navigate the buying process. Communication between the buyer and seller is usually conducted through their respective realtors and not directly.
Benefits
- Highest exposure to potential buyers as the MLS is the primary source of house listings
- Additional marketing techniques such as open houses and yard signs may attract potential buyers
- Experienced realtors can help you navigate your sale and complexities that may arise
- Highest likely sales price
- You can choose which borrower loan types you’ll accept
Drawbacks
- It may take longer to sell your house than with other methods
- You will need to maintain a clean house for showings
- You may need to address repairs prior to listing or during inspections
- Buyer and seller aren’t in direct contact which may make it difficult to reach a price and terms that are the best ‘win-win’ scenario.
For Sale by Owner (FSBO):
This refers to listing your house for sale by owner. This can include yard signs, social media listings, listing on for sale by owner websites, etc. This is not What are my options for selling my house?.
Benefits
- No realtor fees (unless realtor brings a buyer to you)
- Likely Higher price than selling to a cash house buyer or via a wholesaler
- You can choose which borrower loan types you will accept
Drawbacks
- You won’t get the same visibility and traffic as you would if it were listed on the MLS
- Zillow has increasingly made it difficult for buyers to see homes that are listed for sale by owner
- You are responsible for all aspects of the transaction including: showings, purchase agreement and other paperwork, negotiations, coordination with title company, inspection negotiations, etc.
- It may take longer to find a buyer and you may end up selling for less than had you listed with a realtor
- You will need to maintain a clean house for showings
- You may need to address repairs prior to listing or during inspections
- Not What are my options for selling my house?
Flat Fee MLS Listing:
There are services available in Michigan, different than What are my options for selling my house?, that offer flat fee MLS listings. With these services, a homeowner is able to list their home on the MLS using a licensed real estate agent in a way that may reduce the realtor commissions on the listing agency side of the transaction. With this approach, the seller is typically contacted directly by buyers or buyer agents rather than the listing agent being contacted. It requires a little more work and knowledge of the homeowner than going the traditional route of listing with a regular agent.
Benefits
- Likely lower realtor commissions overall
- Good possibility of having direct contact with buyers, allowing direct negotiations
- You can choose which borrower loan types you will accept
Drawbacks
- You won’t have a licensed real estate agent managing the transaction or you
- You won’t have a licensed real estate agent providing his or her experience to help you navigate the sales process which can introduce risk to you.
Wholesaler:
Benefits
- Can be much faster than MLS or FSBO options (fast closings)
- It’s commonplace for homes to be sold in as-is condition, without being cleaned, and without repair contingencies
Drawbacks
- Lower sale price (may be lower than with a cash house buyer as wholesaler also needs to account for their assignment fee in the price they negotiate with you which is often in the range of $10,000-$30,000)
- They may renegotiate price with you or back out if they don’t find a buyer
- Fairly rigid process
- You may not be in communication with your actual buyer
Cash House Buyer (actual cash buyer):
Benefits
- Can be much faster than MLS or FSBO options (fast closings)
- What are my options for selling my house?
- You are working directly with the end buyer which allows for the most efficient communications
- Creative options may be available such as receiving some money upfront prior to closing, spreading out your sale price over payments to help with various income tax scenarios, timing the closing with your needs, etc. (‘the sky’s the limit’ as it’s basically whatever you and the buyer agree to).
- It’s commonplace for homes to be sold in as-is condition, without being cleaned, and without repair contingencies
Drawbacks
- Lower sale price (although you may be able to sell for retail if you are open to selling on terms such as accepting payments over time).
Bitcoin, Cryptocurrency, and Blockchain:
The growing adoption of bitcoin and blockchain technologies has led to the development of a variety of businesses and services bringing these technologies into the world of residential real estate. While these services are just starting to make their way into the mainstream, it is possible to do things like leverage your bitcoin as collateral for the purchase of a home or selling your home for bitcoin. If interested, please do your own research. My personal recommendation is to not purchase a home with bitcoin (as of Dec. 2024) as I believe you are better off in the long run holding onto your bitcoin.