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I'm getting ready to sell off a property that we started remodeling. Whats the best way to maximize the cash from a sale?
I can low ball the property to sell it fast, but since the property is paid off, I'm in no hurry. Just getting ready to move out of state and dont want the property vacant.
Would I be better off charging more and do seller assist and repair credits to the buyer, or a lower price with me offering to take a 2nd on the property. (yes I realise the ramifications if they dont pay the 1st). Any thoughts?
There will always be a demand for a fixer/handyman special. Realtors usually refuse to show them. Most buyers want a red ribbon home. But there is and always will be buyers wanting a fixer.
The first buyer you will encounter will be professional flippers. They will usually low ball your offer. Many times these are cash buyers too.
The next buyer will be young couples with some basic construction smarts and just want to buy their first home. Limited funds will make this an attractive buy.
The fact that you said you started doing repairs actually hurt you. I buy fixers and what I see is that when sellers put some useless improvements into the home they seem to think they built a castle and want double the cost back. People buying a fixer want to do all their own work from scratch.
Fixers in many cases are not mortgageable. There are some programs like the 203K which I used and are great. Some buyers find this loan hard to obtain.
You might have to be prepared to owner finance but do it on a short term like one year so the buyers will have some pressure to finish rehabbing and obtain their own financing in short time. The owner financing will also make the property much more easy to sell.
Allow me to add one more thing. In better times when I am on the hunt to find a flipper I see this all the time.
If you know every home on your block is worth $100K and you also know your home needs $20K in improvements, you can not list the house for $80K. This way you are telling the buyer that their labor is worth nothing. You must factor in labor. I would say in this example your $100K house needing $20K in inprovements should be listed around $70-75K and neg from there.
The fact that you said you started doing repairs actually hurt you. I buy fixers and what I see is that when sellers put some useless improvements into the home they seem to think they built a castle and want double the cost back. People buying a fixer want to do all their own work from scratch.
I agree with you completely here. I have hired some people to come in and finish the repairs that we have started. All of thse mechanics of the house has been updated, all new electrical, furnaces, central air etc. Part of me is thinking I should just bring in a crew to knock out the house, get it done.
I agree with you completely here. I have hired some people to come in and finish the repairs that we have started. All of thse mechanics of the house has been updated, all new electrical, furnaces, central air etc. Part of me is thinking I should just bring in a crew to knock out the house, get it done.
There is a thought. If you have the will power to put up with all the crap you will have to endure then in the end you will have a red ribbon house and you can charge top dollar for it.
Just know what you are getting into. So many contractors are bad, unreliable, stupid, rude, crooked did I say dumb as a box of rocks? This is why I grew up learning to be a master of all trades. Now no one can put one over on me from the slab to the ridge.
Based on the above, I'd suggest you get it liveable or your next buyer can't get financing. Once that's done if you offer downpayment, closing cost assistance, points buy down, etc., it should again help the borrower. The lenders today are charging more interest and requiring more $$ toward down payment. Just my USD.02.
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