We have inherited a home. The home has several issues that will take time and money to fix. Our area has a pretty hot market right now. We want to sell the house as is. Is it better to do that with or without a realtor? We have a good idea what the house is worth. We have interviewed realtors and they believe we should fix the house. I believe for their benefit. The house constantly reminds us of the occupant. So, we find the situation emotional and difficult to do any work on it.
We have inherited a home. The home has several issues that will take time and money to fix. Our area has a pretty hot market right now. We want to sell the house as is. Is it better to do that with or without a realtor? We have a good idea what the house is worth. We have interviewed realtors and they believe we should fix the house. I believe for their benefit. The house constantly reminds us of the occupant. So, we find the situation emotional and difficult to do any work on it.
I buy from people in this kind of situation all of the time and I've learned a few things along the way:
1. Yes, you can sell it yourselves by using escrow and an attorney
2. Real Estate agents want a sale to go smoothly and pass inspections. When a property doesn't pass inspection, the loan doesn't close, the sale fails and it's a waste of everybody's time. Therefore they require a finished house before they offer it to the public. (I am not a real estate agent, just to be clear)
3. You need a buyer who pays cash and isn't concerned about inspections and you need to be realistic about the pricing or it will never sell. A house that can't pass inspection isn't worth as much as a house that can pass, in any market.
4. People who inherit emotional properties, and I've bought plenty of these, tell me that they just don't want to deal with it. Sometimes they don't want to be the ones to empty the house, don't have money or time or expertise to fix it up and unfortunately the house becomes an unwanted burden rather than a blessing. Owning a house is not always easy on a person and it can take a toll.
5. Sometimes there are other issues that the heir doesn't know about that complicate the sale (unpaid taxes, liens, other heirs, the probate process, etc) and it helps to have a buyer familiar with the processes that clear those matters up.
6. Time is also a factor sometimes. They want cash and they want it now. Some people who say they will buy the property are actually not able to and are relying on trying to find financing to make the deal work. You have to sort through that. Again, a big waste of time for the sellers.
So, whichever way you choose to go, sit down, make a list of what you want to accomplish, what time frame you want it done in and make as best a list of steps to take as you can or contact someone that can help you with those lists.
Inspector · Orlando, FL · Member since 2016 · 21 posts · 12 votes
5y
@Amanda Gustafson go find a home inspector to inspect the home for you and give you a factual bon-biased representation of the condition of the property…….this removes the sentimental factor and can also help show you things about the property that you might not have realized before…..then you have a ground zero to build from….. hope that helps…
Rental Property Investor · Colorado Springs, CO · Member since 2020 · 433 posts · 284 votes
5y
Amanda, Where is the house located what are the particulars? Finding a cash buyer will result in less total sales amount, but quicker and easier transaction. Shouldn’t be hard to do in this market. Best of luck, cheers
I am a Real Estate Agent and Investor here in the Tampa, Florida area. I have dealt with this many times. I do agree that the agents are telling you this to benefit them. You need a Realtor that has experience with investment properties. Not all of them know what they are doing when it comes to investment property. I would handle it like this, the market is so hot right now, I feel like you will get much more money from a bidding war on the MLS than a cash off market buyer. Like those we buy ugly houses types. You have the agent list it "AS IS". Cash purchase only. You can have the agent require "NO CONTINGENCIES WILL BE ACCEPTED" which mean that you will not accept any offers with an inspection period. This will bring your REAL cash investors that don't play around. They know the process and the value. I would list the property at a price that reflects the repairs needed. If market value is $150,000 then deduct commissions and known values to repair. Make sure you have a Net price in mind that you need to get. It does have to be within reason. You can't list a house at market value when you know it needs a new roof, plumbing, ect. If your market is like mine right now......YOU WILL get an offer fast and close fast as well. That's how I would handle it. I feel like you will get more money this way. Let the buyers fight over it. Hope that helps! Best of Luck.
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
5y
@Amanda G. You're better off selling with a Realtor because they'll get you a lot more exposure.
They're most likely telling you to fix so you'll have access to a larger pool of buyers. While there is a tendency here on BP to attribute absolutely everything to the "greed of the Realtor", the increase in commission for minor-moderate repairs isn't all that important to the agent. Much more important is the likelihood that the sale will close given its current condition.
Any of the government-backed loans (FHA, VA, USDA) loans require a very strict inspection for condition. A little peeling paint, cracked window, uneven sidewalk, wobbly handrails and a thousand other little items will cause the loan to fail. The exception is an FHA 203K construction loan - but that's additional complication for the buyer and a slower transaction for you.
Conventional loans require only that all major systems are functioning normally. HVAC, plumbing, electric, etc. But with a larger down payment required, there are fewer buyers using these loans. Actual cash and HML buyers are even more rare, though for an as-is property, these and a 203K buyer are the most likely to succeed.
The bottom line is that if your property won't survive an FHA, VA or USDA appraisal, you're ruling out the majority of buyers because they will most often use one of those loans.
That doesn't mean you can't sell as-is. When I was selling real estate, I'd market a house like this as Rehabber's or Handyman's Special and include a statement in the description that said "Not suitable for FHA, VA or USDA loans".
One thing you might consider is paying up front for a home inspection and provide that report to buyers. You might even attach it as a disclosure in the MLS listing. That will discourage some of the tire kickers (time wasters) and encourage the rehabbers and handyman types you're looking for.
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
5y
You have to separate what someone is asking you to fix because it will "look" better and what someone is asking you to fix because the house will be hugely discounted, even as-is, without fixing it. In the end, you will always do better with a realtor, but if you want to sell an as-is on the market, you need an agent who gets that and can get a contractor to come in and give repair estimates so when you present it as-is, you have answers that buyers and investors need. I also agree above with getting an inspection done so you know what you are dealing with and what buyers will see. Even in an as-is, people may still do inspections.
