Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
I have a $399K home for sale. Several agents have told me that it is a good price, but because it has an in-law suite it is going to be the right house for just a limited number of people. I would like to get a chunk of money out to use for down payments on investment properties. Since it has not had a showing in a month of being listed, I accept and understand that a price reduction is in order. But do I drop to my lowest now (would that appear desperate?) or should I do fairly quick incremental drops? What strategy is most likely to a) get me a quick sale and b) get me the most money possible without waiting too long.
I am also thinking of accepting a seller financing deal for over 30% down and the right buyer, but need to look into legal and tax issues first.
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
12y
Is that your residence now? Dodd Frank has an exclusion for Home Sellers 1 per 12 month period.
Understand the the exclusion below.
The person provides financing for the sale of only one property in any 12-month period. The property must be owned by the seller and serve as security for the financing.
The person has not constructed, or acted as construction contractor for, a residence on the property in the ordinary course of business of the person. (This is the same requirement as applies for the 3- property exclusion.)
The person provides seller financing that meets the following requirements:
The financing has a repayment schedule that does not result in negative amortization. A balloon mortgage is permitted. (NAR sought relief from the prohibition against balloon mortgages.)
The financing has a fixed interest rate or an adjustable interest rate. If it has an adjustable rate, it must have reasonable annual and lifetime limits on rate increases and provide for the rate to be determined by the addition of a margin to an index rate based on a widely available index such as indices for US. Treasury securities or LIBOR. CFPB’s Official Interpretations note that an annual rate increase of up to 2 percentage points is reasonable. A lifetime cap of 6 percentage points, subject to a minimum floor and maximum ceiling up to any applicable usury limit, is reasonable. (This is the same requirement as applies for the 3-property exclusion.)
Furthermore, there is a bill pending in the U.S. House of Representatives that would allow all seller finance transactions to include a balloon payment. The bill, HB 245 sponsored by David Schweibert, is currently in committee.
This information is not legal advice and is deemed reliable but not guaranteed.
Get a lawyer for Dodd Frank and a RMLO for your Buyer.
House Flipper · East Stroudsburg, PA · Member since 2013 · 1k+ posts · 205 votes
12y
Before I would reduce the selling price of the house, assuming you priced it correctly to begin with: I would think of offering a bonus or incentive to the selling agent who sells it at full price within 30 days; you might also consider spending your own money on advertising your house in the local real estate magazines. You could buy a full page for less than the price drop it would take to move your house. Most real estate agents don't spend a lot of money on any particular house; if you promote only your house I would think you would get some action. I would discuss your plan with the listing agent so he/she doesn't feel your attempting to cut them out. Food for thought.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
The problem with overpricing is that you taint the listing. Everyone sees that it's overpriced. Then, most on the MLS will skip over you listing and regardless of dropping the price.
If you're serious about selling you need to price it right starting off. Don't play games.
Otherwise, drop the price in increments until it sells. Let the listing show that the price will drop until it's sold as that motivates buyers.
Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
12y
I was told by several agents that this is a valid price, but kind of like what happens when you try to sell a duplex. It is a SFH, but part of the value is that it has an in-law suite. That limits the potential buyer pool.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
12y
You can either sell it for "top price" and wait for that elusive buyer, OR you can sell it fairly quickly for a lower price. You have to choose one or the other.
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
12y
I would jump at these type of properties!!!! Value add is easy to sell. A lot of families have seniors in high school going to college or community school who would rather not be woke up at 3am when they come home. Lots of buyers!!! Also an income property!!!
Put your own ad up on eBay real estate on Craigslist. Put several ads on cl with different subject lines. I believe you could sell this for MORE than list as I mentioned.