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I bought an 800sf 2bd/1ba ranch in Romulus (at wayne border) a little over a year ago and am now looking to sell asap..
I paid cash for it (and have about $4000 balance on a personal loan I used to purchase) and also owe about $5000 in back property taxes... I bought the house from an investor who was liquidating a number of properties and agreed to assume the taxes from 2009 on...
Anyway, what I'm wanting to know is what the likelihood is that I could find a cash buyer willing to take on the back taxes as a part of the sales agreement, ideally without a real estate agent? I'm looking to sell the property for $10k-$12k... (most recent appraised value was $27k, but at this point I don't have the time or resources to complete my planned renovations as I need to move to be be near family as soon as I can, I currently live in this house and based on comps in the area I know I would never get that much, and the timeframe is more important to me than the profit)
The interior needs no repair, maybe some cosmetic work ( i.e new neutral paint / trim which I will most likely do anyway.) The plumbing and electric were totally updated when I purchased, the furnace and water heater were installedby the previous investor (I'm the first to use them), the roof and double hung vinyl windows are in good condition, new black kitchen appliances (fridge and ceramic top electric stove) , new washer and dryer, newer oak cabinetry... brand new carpet in both bedrooms (still rolled, hasn't even been installed yet) hardwood-style laminate flooring in living and dining rooms...
The exterior does need work, but has potential... I just had a new wooden porch built. The aluminum siding has been painted and new shutters added but it is very banged up and should really just be replaced altogether.. also needs a sidewalk poured from porch to driveway.. huge double corner lot, wooded in the back, and although it is in a neighborhood the way the streets run there are no neighbors on either side and an empty wooded lot across the street, very private..
For those of you who aren't familiar with romulus.. its fairly typical of a downriver/metro detroit suburb, has its share of issues but safe and well maintained in comparison to some surrounding areas (inkster, shacktown area of westland, etc) probably comparable to Wayne and Taylor... my actual neighborhood has a lot of newer construction on one side, older but well maintained ranches on the other... quiet area, occasional load cars/music etc but nothing violent or anything.. mostly older people on the older side and families on the newer.. I don't mind the area at all, although some people do definitely have their reservations about Romulus in general.. just far from my job, family and friends and want to be back near them for a few reasons..
I know this is really long (my apologies) but I just want to paint a clear picture of the property and the situation,,,, so back to my original question... would it be possible/likely to find a cash buyer willing to pay $10-12k to purchase the home as is AND assume the back taxes (app. $5k payable over the next three years) or would I have to pay those taxes prior to sale regardless...
Any advice/opinions would be very appreciated! Thanks for your time!
would it be possible/likely to find a cash buyer willing to pay $10-12k
to purchase the home as is AND assume the back taxes...
This really means that the sale price isn't $10-12; it's $19,000- $21,000.
Plus (for the buyer) it includes all the other work the place needs.
So the first question to ask is whether when everything is all done...
will having $30,000+ in actual cash tied up in the place be worth it (or not)
to the investor or landlord that is your buyer.
The answer is gonna be all about the local issues.
If the house it can be rented for $500 a month or more? Probably so.
But if this is some old trailer rather than an actual stick built house... Probably not.
Quote:
would I have to pay those taxes (and lien) prior to sale regardless...
No. If you just don't have the money or even the minimum to get current...
You do what you have to... but they're gonna have to be paid at some point, right?
Not paying them puts you (the seller) into the worst possible position
of being pressured from both ends to make a deal. That's not good.
Quote:
...but I just want to paint a clear picture of the property and the situation.
Any advice/opinions would be very appreciated!
OK; best advice is to get some help with this "paint a clear picture" thing.
You're just not doing that to your best advantage.
The place is what it is... but that *can* be presented better.
Good help with this will cost some.
Oh yeah, and get the interior painted and that carpet laid. Now.
hth
Quote:
Originally Posted by NewAdvert
For Sale AS IS: $21,000...
Located in Romulus MI (at Wayne border)
800sf 2bd/1ba Rancher on ______ acres.
Huge double corner lot, wooded in the back,
Empty wooded lot across the street, very private..
Price includes $4000 lien, $5000 property tax,
and _____ acres of ground.
New kitchen cabinets, refrigerator, range.
Laminate flooring in living and dining rooms.
New carpet for both bedrooms.
Recently painted.
Plumbing and electric updated.
New furnace and water heater
New washer and dryer.
Roof and double hung vinyl windows in good condition.
New front porch.
Exterior needs work.
Last edited by MrRational; 10-19-2011 at 07:33 AM..
Just to clarify; the loan that I have is a personal loan, not at all tied to the house. (I just listed it as info, as I will pay that balance off with the money from the sale... I guess that was really unnecessary info) The only lien on the property would be the back taxes which I am paying about $400/mo towards. This is why I was hesitant to roll them into the sales price, as they will be decreasing over time as the house sits on the market.. I was thinking I could just list the house low, present a potential buyer with the information regarding the taxes and negotiate from there. It wouldn't be possible to list the house higher and settle the tax bill immediately after closing when I had the funds would it, since by that point the house would no longer be mine, the buyer would want a clear title prior to closing?
As for the rental income, it is a stick built house on a double lot in a residential neighborhood. I did list the house as a rental for a short period of time at $700/mo and received a fair amount of interest but decided against it for a few reasons. There is a comparable home that just rented in the neighborhood for $850, it is a 3bd but only 50sf larger than mine. I looked at it out of curiousity.. the interior is very dated and the exterior is not in much better condition than mine. I know that the house would get well over $500/mo as is. I'm in metro Detroit and that is the average rate for older 1bd apartments. Mind you there are a number of houses in the area priced for sale in the 10-20k range that are not selling, however all of the ones that I have looked at have had major repairs needed (no plumbing, bad roof, no furnace, structural damage, etc or are in very undesirable neighborhoods...) My thought is to price my house comparably to those houses but with the advantage that very little work will be needed for a homeowner or investor...
I know that if/when I list the house I will definitely "paint a brighter picture" I just wanted to point everything out in the post to get better feedback on the pricing/likelihood of finding an interested buyer..
I was thinking I could just list the house low, present a potential buyer with the information regarding the taxes and negotiate from there.
Er, no. Your personal finances, your costs, your debts
have no bearing whatsoever in how the ask or negotiated price should be set.
You list the ask price high and negotiate down.
That "price high" being a number slightly above what the property condition
and what the immediate market says is the value. The taxes due can be paid off at settlement...
and unless there is a registered lien there is really no reason (for YOU)
to even mention them until after you have a contract.
Quote:
I did list the house as a rental for a short period of time at $700/mo.
...a comparable home that just rented for $850, it is a 3bd...
Good. Rent rates in the area are what an investor will be looking at.
After an investor buys your place and spends a few bucks to clean and finish fixing it...
they'll end up with about $30,000 invested... they then rent it for $5-600 (maybe $700?)...
that makes a nice return on their investment regardless of how they do their accounting.
Good advice, my only concern with listing high was that the area is so flooded with houses for sale that are sitting for so long priced cheap that if I list high I won't even generate interest. I've had three agents basically tell me they aren't really interested in the listing..
houses... sitting for so long...
I've had three agents basically tell me they aren't really interested in the listing...
No doubt.
They're in the "retail" market which all went south in '06.
You're in the "wholesale" market.
Visit a local landlords association meeting.
"Find one of them."
As to the price number itself...
not *crazy* high... just "slightly above" what the market is...
or as in your case enough to get out from under + a few grand.
You can always come down but you'll never be able to go up.
Be concise of the pricing of the house, so that people who are interested to buy the house will not be doubtful. And it is much better to have a sample pictures of the house.
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