What do you do when you need to sell your home fast, but extensive repairs are out of the question, either because they’re too costly or too time consuming? Busy home sellers have a few options in this scenario, including selling as-is, completing just minor repairs, and focusing on only the big-ticket items most buyers are concerned about.
Selling a house by auction is the fastest way to get market value when you sell your home as is. It’s the only way to get potential investors bidding against one another to drive your profit to its highest level. Cash offers from cash for homes companies often give less than the full market value you’d get at auction. Selling by agent or by owner can bring higher profits, but also may take more time.
There are the four main options in selling a house as is:
• Real Estate Auction
• Cash Quick Companies
• Using a Real Estate Agent
• FSBO (For Sale By Owner)
Making a profit selling the home can often depend on factors outside of your control; housing and mortgage rates, if it’s a buyers or sellers’ market right now, even the effect location has on the value.
Who Are Possible Buyers Of Fixer-uppers?
Unlike the conventional home buyer who wants to purchase a property that’s move-in-ready, buyers of fixer-uppers will look at your home’s potential, rather than its perfection. These are people able to put the effort and time in to repair it, to eventually sell or live in it. Someone could see your house as an empty canvas for their dream home.
• An Investor: Typically buy homes when they are at lower prices, renovates them, and sells them for a profit. This type of buyer focuses more on your home’s potential, rather than its current flaws.
• Deal Hunter: Your fixer-upper presents these buyers with the ideal opportunity to move into a desired area in which other homes are priced out of their budget.
• Remodelers: These potential buyers are looking for a fixer-upper so that they can remodel, design and add all the features they are looking for. Selling your home as is – presents the perfect opportunity to buy a home at a reasonable price and create their dream home.
Selling A House As Is By Auction
Even in your home’s present condition, home auction is a lucrative option for selling your house in a no fuss manner, while getting the best possible value. Real estate auctions attract a wide selection of bidders, many of whom, are looking to buy a home quickly, perform the repairs and sell it for a profit. Home auctions foster environments that generate healthy competition between bidders, resulting in selling houses as is for the best market value. Typically, buyers are pre-qualified or have cash in hand and the majority of auctions ask buyers to provide 10% deposit and pay the other 90% when their bid is accepted. When a bid is made, the ball is in your court whether you decide to accept it or not.
You’ll also save on avoiding paying a real estate agents’ 4-6% commission. With real estate auction, impact advertising, which attracts the attention of a broad network of buyers, becomes more of an option, and most auctions will successfully sell your home within 21-45 days. The real plus in selling your home as is at a home auction is that you’ll be able to avoid lengthy negotiations with a buyer or agent, insisting that you make repairs before closing.
Selling A House As Is With Quick Cash Offer Websites
Going with a company that offers quick or immediate cash offers has its advantages and disadvantages. The obvious plus is speed. A quick cash offer is useful if you need to sell your home as is, maybe because you can’t afford to keep it or maybe you’ve secured a job that’s far away from home; who needs a tough commute. Perhaps you just need the capital. There are also many homeowners who don’t have the time nor the expertise to sell the home themselves (For Sale By Owner/FSBO). Getting a quick cash offer saves time on lengthy negotiations with a potential buyer. You don’t need to show your home repeatedly like you would with a realtor. Unlike some other options, you won’t need to make any repairs before a sale.
The Downside Of A Quick Cash Offer/Cash Buyer
Before you look up a quick offer company on Google or make a call – you’ll want to consider the potential downsides: You’ll avoid things that delay the sale, but you’ll likely be sacrificing a better price for your home. Having someone evaluate things like your location and how frequently homes sell in your area affect the market value of your home. Even if you want to sell quickly, you want to get a fair market price too. Cash offer companies will typically research the market price of your home and offer you less. Sometimes, they’ll even send someone to inspect your home. If they find anything that could be repaired, their offer can change, and shift to something lower than what you’re comfortable with.
Selling A House As Is With A Real Estate Agent
Hiring an agent who knows the local market can lead you through the steps to a sale, finding necessary repairs, and having a professional evaluate how to price the house to limit closing negotiations. In this case, you’ll want a real estate agent who has experience selling fixer-uppers. The more experience they have, the more they’ll know how to advertise and market your property. But remember, selling your home as is means that it won’t be sold in “turn-key” state (complete with all repairs and upgrades done). Homes that need repairs can be listed for longer than expected, as potential buyers weigh the potential vs. additional work they’ll have to put in to it.
Your agent can help you work out the value of your home, if it were to be remodeled. They can “assess comps nearby” to work this out, and then make a list to calculate the cost of upgrades needed to get your home in prime condition.
As weathered professionals, they’ll be able to tell you which upgrades are needed, which are affordable, and which you can reasonably leave to the buyer. Whatever cost the buyer will have to pay for repairs will likely be subtracted from the selling price of your home. This option is helpful in nailing down a realistic asking price.
The Downside Of Selling Your Home As Is Through A Realtor
Chiefly, when you’re selling your home as is, the realtor’s commission of 4-6% may be more than you’re comfortable giving up. Additionally, how quickly you can sell your home as is depends on your agent’s schedule and their priorities. If they are busy -like many of us are- or if selling your home isn’t high on their priority list, it won’t get sold as quickly as you might like. Unlike selling your property as is at a home auction, buyer’s agents may want to call a home inspector to make sure that there are no surprise costs. It’s best to disclose everything that needs to be repaired on a listing. This will create a realistic expectation for the buyer and other agents that see your listing. There are also things that you’re obligated to disclose such as:
• Lead Paint: if your home was built before 1978, both parties need to sign a lead paint disclosure. This applies in every state and is federal law. Even if you think lead paint was removed, you still need to get the document signed.
• Property Drainage Issues: if you’ve experienced flooding in your basement, you need to disclose it. Even if the issue was caused by one of your neighbors making an extension or a one-time incident. The responsibility to disclose any property drainage issue lies with the seller.
• Pests: If you have any infestation which could be as minor as mice or as major as termites, buyers need to know about them.
Selling A House As Is For Sale By Owner (FSBO)
You could have any number of reasons to sell your house on your own. One of the advantages of selling directly for sale by owner is the saved cost of a real estate agent’s 4-6% commission. With an agent out the picture, you can be in control of how much you list your home for, what repairs you’ll offer, and pretty much everything else. You can also decide on the most convenient time for when to host showings of your home to prospective buyers. You’ll also get to personally give potential buyers perspective on what it’s like to live in your neighborhood. If you want to go down the route of selling your house as is yourself, it’s a good idea to have clarity of your bottom line price and what concessions you’re open to making. It’s also a good idea to be open to feedback from prospective buyers, focusing on selling, and not letting sentimental value cloud your view.
You may not know what your home is worth in its present condition. One way of working that out is looking at other homes similar to yours. This involves doing a bit of research. One tool that may help is pricing scout.
This software estimates your home’s value based on nearby similarly-sized homes. It’s not ideal, as other homes may be in a different condition than yours, but it still gives a rough idea. You can also pay $7.00 a day to list your home on some multi-listing sites. Even if most of the people on those sites will be realtors, they might have buyers who are looking for fixer uppers.
The Downside Of Selling Your Home As Is Through FSBO (For Sale By Owner)
The real drawback is the amount of time and effort selling directly by owner takes. As the owner, you’ll have to do everything from advertising your house, running open houses, scheduling showings, legal paperwork, and negotiation. You might end up feeling like you have a new job on top of your current one. To sell your home as is on your own, you’ll need to know the ins and outs of the realty industry. You’ll need strong negotiation skills and will likely end up paying buyer agent’s commission fees.
Buyer agents are very likely to insist on a home inspection before their client considers buying your house directly. If there are any needed repairs, it may take longer than you’d like selling your property. You have to ask yourself if you’re willing to put up with that stress.
On top of that, during the selling process, you’ll need a trustworthy attorney to double check everything. This can add up and be a pretty big expense. At the end of the day, without the experience of a realtor or someone who understands the state of the housing market, you could end up with a house in listing purgatory.
A Short List of Tips for Selling Your Home As Is
• Landscaping: You don’t need to spend a fortune of money on landscaping design. Simply by cleaning up weeds, mowing the grass and planting a few flower pot plants can make your home curb appeal skyrocket. Research shows that landscaping can add as much as 12% value to your home.
• Clearing up clutter: Research shows that the first place that potential buyers look is inside your house. As much as 95% of them look inside your windows. Simply clearing your windows and window sills make a huge difference.
• Add to the resale value of your home: Research shows that doing a deep clean of your house can add nearly $2000 to its the resale value. It’s wise to consider when thinking from the buyer’s perspective.
• Make sure you’re in good standing with property and state taxes.
• Reverse Mortgages: If you plan to sell your house as is, and have a reverse mortgage, there are some complexities that go into selling your home
Other inexpensive changes that can increase value dramatically can include:
• Repairing broken doors and hinges
• Fixing leaking pipes
• Replacing knobs on cabinets
• Treating carpet stains.
While cash-offer companies, real estate agents and selling directly by owner can work well to sell your house as is, home auction is likely to be one of the better choices if your house is still a work in progress.
Avoiding foreclosure? Facing divorce? Moving? Upside down in your mortgage? Liens? It doesn’t matter whether you live in it, you’re renting it out, it’s vacant, or not even habitable. Wasatch House Partners have a history of helping owners who have inherited an unwanted property, own a vacant house, are behind on payments, owe liens, downsized and can’t sell even if the house needs repairs that you can’t pay for. And yes, even if the house is fire damaged or has bad rental tenants.