We’re used to thinking of our homes as a financial asset, but there’s a real possibility of being in a position when you can neither afford not to sell nor afford the costs of selling. While an estate agent’s commission and the closing costs are covered by the sale itself, your costs begin before you call a property agent.
Yes! We’re talking about those grudging renovations that you absolutely have to do to give your home the appeal that makes it a winning choice for home buyers. And, even if you decide to skip “packaging” your home to sell, some home repair costs could be necessary if the things you must attend to would make a bank balk at helping your buyer with a mortgage.
That’s particularly true of older buildings or those with a less-than-standard approach to construction. If you’re already struggling to get insurance, you can bet that your prospective buyer won’t be able to get a mortgage either.
Your Renovation Expense Could Cost More Than You Gain
When your property needs a lot of renovation to attract possible buyers, you’re faced with a pretty old conundrum. Will the increased ease of selling a house in good condition, and the better price you hope to command for it, actually make all the time, effort, and expense worthwhile?
Even before we entered the troubled year that is 2020, realtors were warning homeowners to limit the investment in pre-sale renovations to the necessary basics. But that can come to a hefty bill. While the owners of newer homes might get away with a lick of paint and a basic sprucing up, older homes may not be as easy to get market-ready.
If you’re selling because you desperately need the cash, you’ll be pardoned for wondering how you’re going to afford painters, electricians, plumbers, roofers, and whoever else you need to add to your home-patching-up crew. And, of course, since all of this happens before people even start looking at your home, you have to fork out the cash before you get anything back from the sale itself.
Selling When Time and Money are Both in Short Supply
If you were thinking that this article would eventually touch on the global Covid-19 disaster, you’re right! The pandemic has changed a lot of things, and the value of your house, the speed with which you want to sell, and the ease with which you find a buyer are among these.
Let’s get this ugly picture out in the open before we look at a solution. First up, you are quite possibly one of the many Americans who have suffered from temporary or permanent loss of income. Businesses are closing – some of them permanently – and people are defaulting on rentals and mortgage repayments. Sure, there’s talk of various forms of relief, but Time Magazine reports that up to 40 million Americans won’t be eligible for government-sponsored help.
This disaster is still unfolding, but there are fears that homeowners and tenants could find themselves in a situation similar to the one they experienced during the Global Financial Crisis of 2007-2008.
For those eager, or even desperate, to sell a home, the consequences are clear. They’re facing a market that’s cash-strapped and that may not be able to access credit. If you’re selling, expect to realize rather less than you would have had you sold last year and more difficulty in finding a buyer with the necessary means.
The Solution? Cut Out The Renovations and Sell for Cash
There is a solution that may sound impossible but isn’t. If you can cut out the renovation process before selling, you don’t need to have cash on hand to cover all the materials and labor you’d otherwise need to spend on. Yes, you’ll get a lower price, but when the repairs cost more than the increase in selling price you can command, you just saved yourself a whole lot of time and money.
There’s still the “small” matter of your buyer needing a mortgage – but what if you can find one who pays cash? If your home’s problems include issues like mysterious leaks from a worn-out roof, short-circuiting electrical wiring, and plumbing that goes bump in the night, you might just find that the lower price that an “as-is” cash buyer gives you is worth it. Plus, you don’t have to worry about adding a lot of time into the equation. You can sell up and go.
They Buy Ugly Houses
While TV programs may make “flipping” property look easy, it isn’t. Nevertheless, there are companies that will take their chances with your less-than-desirable residence. They do have the cash, they absorb some of the hidden costs home sellers often overlook, and they have all the time in the world to turn the property around. In short, they aren’t in a hurry and thay aren’t as potentially short of cashflow as you and private individuals who would be interested in buying your house may well be.
The final question you have will be “How much can I get for my house?” That can only be answered after an assessment. An interesting franchise that may have what you’re looking for is named “We Buy Ugly Houses.” It has franchises in many major US cities, and you can find them by searching the name plus the city you live in, for example, “We Buy Ugly Houses Minneapolis.”
So, if you’re looking at selling in the current housing market and want to get it done quickly, it’s possible to do just that. And you can do it even if you skip fixing up your home before it goes on the market. The downside? You’ll get less for the sale. On the upside, you don’t have the presale costs and you save a lot of time and hassle. Our verdict? Well worth checking out. You can always say “no” if you don’t like the deal.
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