The Chicago real estate market can be as unpredictable as its weather. For homeowners looking to sell, navigating this landscape may require some out-of-the-box thinking. This article is a no-holds-barred look into the unconventional ways to sell a house in Chicago, shedding light on the benefits, potential issues, and how to navigate those challenges.
1. Selling to a Cash Buyer
- Quick Process: Cash sales are typically faster than traditional methods because they bypass many of the loan approval processes.
- ‘As-Is’ Purchase: No need to worry about costly repairs or even cleaning out the house (if needed). Cash buyers often purchase the home “as-is”.
- No Agent Fees: Without agents involved, you avoid costly commissions and fees that would take a chunk out of your take-home cash.
- Lower Sale Price: Cash buyers will offer a lower price because they’re assuming all the risks and managing a comprehensive and time-consuming renovation.
- The price might seem lower, but when you factor in repair costs, agent fees, and time saved, the net gain often turns out to your benefit.
2. Selling by Owner Financing
Did you know you can become the bank in the transaction? This is a growing trend in terms of unconventional ways to sell a house in Chicago, and for good reason. Highlights are below, but to find out what is owner financing, click here.
- Larger Buyer Pool: This opens doors for buyers who might not qualify for traditional loans.
- Steady Cash Flow: Instead of a one-time lump sum, you receive monthly payments, sometimes with interest.
- Higher Sale Price: With flexible financing, you might get a better price for your property.
- Risk of Buyer Default: The buyer might fail to make the agreed-upon payments.
- Proper vetting and legally binding contracts reduce this risk. Plus, if a buyer defaults, you retain ownership and get back a fixed up house with improved value.
3. Selling Subject to the Existing Mortgage
- Quick Closing: Since the buyer is taking over your mortgage, the process is swift.
- Relief from Mortgage Payments: The buyer assumes the responsibility for the mortgage payments and those timely payments improve your credit score without you having to pay them.
- Lender Might Call the Loan: Some mortgages have a ‘due-on-sale’ clause that could be triggered.
- While there’s a clause, lenders rarely enforce it, especially if the mortgage payments continue without disruption. And even if they do, investors will just refinance the property and not give up on their investment so easily.
4. Selling with a Wrap
- Potential for Interest Earnings: You can charge the buyer interest, which becomes a source of additional revenue.
- Broader Market Appeal: Like owner financing, this method appeals to a broader set of buyers.
- Double Default Risk: You still owe your original lender, so if the new buyer defaults, you’re at risk.
- With careful buyer screening and a proper legal contract, you can mitigate these risks considerably.
5. Other Creative Financing Options
Lease Option Sales
- Non-committal: Both the buyer and the seller can test the waters before a final sale.
- Premium Rents: Sellers can often charge higher than market rent in this arrangement.
- Non-completion: The buyer might choose not to buy after the lease term.
- You’d have earned premium rents during this period and can then choose another selling strategy or relist the property.
- Shared Risk: Both the seller and the buyer share the risk and benefits of property value changes.
- Immediate Relief: For struggling homeowners, this offers immediate financial relief.
- Diluted Profits: If the home’s value skyrockets, you share the increased profit.
- In volatile markets, having someone share the downside risk can be a significant boon.
Chicago’s property market offers various opportunities for the creative seller. While unconventional methods come with their set of challenges, they often provide unique advantages over traditional sales. By understanding these avenues, sellers can make informed decisions that best suit their circumstances and financial goals. Remember, always consult with real estate professionals or legal counsel when considering these options. If you’re interested in selling your house creatively and want to know if it works for you, reach out today for a no-obligation offer.