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Old 06-30-2013, 08:44 AM
 
Location: San Marcos, TX
2,570 posts, read 7,038,073 times
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A friend of mine is asking me for advice. I don't know why she is asking me, since I'm not in the real estate business but yeah.. maybe she figures I can research for her, I don't know.

Anyway, said friend and spouse are living in a house the friend inherited from her recently deceased mother. They would like to sell the house and move out of state. There is no mortgage; it's been paid off for at least a couple decades. It's an older house in a decent (not great but not bad) neighborhood, with similar homes selling in the 80s. There's nothing structurally wrong with her house or with any of the major systems; all plumbing, electrical, roof, foundation, etc., is good. The house is cosmetically dated (one room has ugly wood paneling and the bathroom tile is very obviously 1960s but not in a good way) and the one "biggie" negative is that it's in Texas and has no central air/heat.

She has contacted a "We Buy Ugly Houses" type of company and was quoted a price of about half what homes in that area of similar age/size go for. So my question is, based on that, doesn't it make more sense to do what can be done inexpensively (paint and so forth), then list it as a house needing some TLC and expect to get a price somewhere between the Homevestors offer and what the average home sells for in her neighborhood?

Not meaning to ramble on -- I suggested she call a real estate agent before she does anything else but told her I would try and get more info also on what these home-vestor types are offering vs what it means for what she'd likely get selling it normally. Seems like the best plan, if someone is not in a hurry, and the house is not in shambles/needing a TON of work to be liveable is to sell it traditionally.. am I right?
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Old 06-30-2013, 09:11 AM
 
Location: Mostly in my head
19,864 posts, read 60,031,215 times
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Contacting a realtor is the best option but unless her town is mostly in that price range, many will not spend a lot of time on a $50K house. How much would a/c cost? What about bringing the attic up to R-49, the latest standard? The paneling can be painted a neutral color, doesn't cost too much. She can ask at the store what she needs to use to prime it first.
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Old 06-30-2013, 09:15 AM
 
Location: The Triad (NC)
31,376 posts, read 69,795,705 times
Reputation: 37464
Quote:
Originally Posted by Sally_Sparrow View Post
...living in a house the friend inherited from her recently deceased mother.
They would like to sell the house and move out of state.
There is no mortgage; it's been paid off for at least a couple decades.
Then that is what they should do: sell out and move on.

Clean it up and sort it out so it LOOK's nice enough that people will come in.
Don't spend on anything beyond the level of bleach, paint, grass seed and mulch.
Then sell it for what it's worth AS IS and do so quickly.

Quote:
She has contacted a "We Buy Ugly Houses" type of company...
Which may indicate the actual AS IS value vs the market nearby.
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Old 06-30-2013, 09:21 AM
 
Location: NJ
17,579 posts, read 42,177,617 times
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Of course it makes more sense to try and sell it normally. You know that. Your friend knows that.
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Old 06-30-2013, 09:34 AM
 
Location: Phoenix, AZ > Raleigh, NC
16,862 posts, read 21,916,448 times
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Quote:
Originally Posted by manderly6 View Post
Of course it makes more sense to try and sell it normally. You know that. Your friend knows that.
Respectfully, I disagree.

I'm thinking this house is going to have hidden structural or wiring or plumbing issues. I'd certainly hire a GREAT inspector before I put a dime into it.

And no a/c or heat? I seem to remember that a house with no heat cannot get a mortgage. How much is THAT gonna cost?

Call the realtor, get some ideas from him/her. Then call another. Then call an GOOD engineer qualified inspector and pay the $300. Then decide.

And don't forget the value of the friend's time and energy. Sometimes, the value of that exceeds the dollar amount of the return.

I don't know the friend's financial situation, but unless it's a very significant difference money in her pocket, after expenses and commissions and costs to fix it up, I'd let it go an move one.
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Old 06-30-2013, 10:09 AM
 
Location: The Triad (NC)
31,376 posts, read 69,795,705 times
Reputation: 37464
Quote:
Originally Posted by manderly6 View Post
Of course it makes more sense to try and sell it normally.
Quote:
Originally Posted by Jkgourmet View Post
Respectfully, I disagree.
Normally... as in sold to a private party (even at way low price)...
vs to a bottom feeder at an even lower price (even if it can be done fast).

Quote:
I'm thinking this house is going to have hidden...
Not that you're wrong to suspect such... but the OP did address those concerns:
"nothing structurally wrong with her house or with any of the major systems;
all plumbing, electrical, roof, foundation, etc., is good.
"

Last edited by MrRational; 06-30-2013 at 10:35 AM..
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Old 06-30-2013, 11:15 AM
 
28,461 posts, read 76,229,870 times
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Default The "we buy ugly houses" route is a huge mistake...

There are some folks that it might make sense to sell to the professional flippers but 99% of such situations will result in a much worse net than either selling as-is or sprucing the place up a little. Even basic paint and clean-up, which even some disabled folks can handle, pay off big!

Last edited by chet everett; 06-30-2013 at 11:31 AM..
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Old 06-30-2013, 12:20 PM
 
Location: Florida -
9,858 posts, read 12,388,160 times
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You haven't said what other comparable houses in the area are selling for or what the average listing-to-sale time is, but, the 'We Buy Ugly Homes' offer probably gives you some insight. They intend to buy the house, invest a very nominal amount of cost and 'elbow grease' and then sell the house quickly for about 85-90% of what other houses are selling... for a 70% ROI. (Assumes $50K buy of $100K house with $5K clean/paint investment and quick sell at about $85-90K.)

Given that scenario, your friend would clear about $45K after closing costs. Optionally, your friend could hire someone to come-in and do a very nice clean/paint etc. job ($7-8K) and sell the house through a local Realtor for $90K ($85K after fees... OR $40K more than option 1). Optionally, they could list the price "As Is" with a $5K 'clean-up/paint allowance.'

It's simple math and common sense, not rocket science. Would your friend rather have $45K now --- or $90K in 3-6 months?
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Old 06-30-2013, 07:48 PM
 
28,461 posts, read 76,229,870 times
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Default Mostly true!

Quote:
Originally Posted by jghorton View Post
You haven't said what other comparable houses in the area are selling for or what the average listing-to-sale time is, but, the 'We Buy Ugly Homes' offer probably gives you some insight. They intend to buy the house, invest a very nominal amount of cost and 'elbow grease' and then sell the house quickly for about 85-90% of what other houses are selling... for a 70% ROI. (Assumes $50K buy of $100K house with $5K clean/paint investment and quick sell at about $85-90K.)

Given that scenario, your friend would clear about $45K after closing costs. Optionally, your friend could hire someone to come-in and do a very nice clean/paint etc. job ($7-8K) and sell the house through a local Realtor for $90K ($85K after fees... OR $40K more than option 1). Optionally, they could list the price "As Is" with a $5K 'clean-up/paint allowance.'

It's simple math and common sense, not rocket science. Would your friend rather have $45K now --- or $90K in 3-6 months?
There are some "flippers" that will take a dated house like the OP has and do some updating but if, as the OP says, there are no real problems with the mechanical systems and the place has bathroom / kitchen that if not state of the art at least has nothing busted I suspect that most flippers would do the EXACT kind of "clean-up & paint" that jghorton is suggesting. Tile from the 1960's is still better than CARPET or some rotted out subfloor. It almost certainly is smart to just clean it up and sell. I have personally seen a few inexperienced flippers foolishly rip out sound but ugly bathrooms and spend thousands on a house that really did NOT justify the expense...

Perhaps the OP has a little experience with home repairs or even just a "good eye" that their friend is relying on for advice about "what to fix up" and that MIGHT be useful info but in my experience (as someone that has owned rental properties as well been involved in selling real estate) the smartest advice is going to come from a local real estate agent that has experience selling homes in the same price category as the OP's friend. The best such agents may even have a list of buyers that have expressed an interest in buying homes similar to the one condition of the subject property and can help speed along a sale at a reduced commission...
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Old 06-30-2013, 10:01 PM
 
Location: Phoenix, AZ > Raleigh, NC
16,862 posts, read 21,916,448 times
Reputation: 28100
Chet everett - a much better response than mine.
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