Posted by Jim Gilbert on Friday, November 22, 2019 at 4:43 PM By Jim Gilbert / November 22, 2019 Comment
As time goes on you may one day realize that you are the owner of a home you're tired of!
You may catch yourself daydreaming of a different situation. Frequently this happens unintentionally, through inheritance, a partnership gone awry, surprises from tenants, or events within your family. This article highlights the advantages and disadvantages of your various available options.
Your last, and most obvious, option is simply continuing with the status quo. The downside of this is that the carrying costs - in the form of mortage payments, taxes, utilities insurance, upkeep and management - tend to increase. And situations involving tenants, partners, or family members are usually not entirely within your control. Maybe there's a better way?
Or perhaps you started a renovation project that got out of hand (or quit being fun). Your partners aren't participating quite the way you expected and it may be turning into a grind. Or maybe you've reached a decision point part way through a renovation and the next step may require upping the risk capital you have invested?
Perhaps you could induce someone who is part of the problem to take ownership of the entire problem. Maybe your tenants or business partner want to buy you out. Maybe your family members want to become the way you wish they were. Dream on.
Sometimes the property has been vacant for some time and has accumulated significant deferred maintenance. Particularly with inherited property that is not nearby the heirs may have simply not decided what to do yet. Vacant property attracts problems. Empty homes get used as free shelter by homeless people, party houses by teenagers, and parking or unpaid storage by neighbors. The grass keeps growing, the rain keeps falling, the bills - for taxes, insurance and utilities - keep coming, and every winter brings a risk of water damage due to frozen pipes. Building materials and tools on site are at risk. Furthermore, the homeowners association or encompassing tax jurisdiction may deliver you a cordial letter requesting timely resolution of untended lawns, broken windows, fallen trees, and so forth. What to do indeed?
Letting the home go into foreclosure by not paying the mortgage, or letting it go into tax sale by not paying the property taxes is never the best approach. Either of these will leave scars on your credit lasting far longer than your ownership of the home.
You could choose to invest in cleaning up the property and rent it. Allowing a stranger (or worse yet someone you know!) to take occupancy of a property is a very serious decision that is not easily undone. Unless you are an experienced landlord with other properties under management by yourself or a third party we do not recommend becoming a landlord as a way to solve another perceived problem. Although being a landlord may offer long term benefits to your net worth this step is best undertaken with full knowledge of the extent of the undertaking. Selling the property would likely enable you to walk away more cleanly.
Selling is an option. You can "fire sale" the house to someone who advertises they buy houses for cash, or "we buy ugly houses." In some market areas known, trusted institutions like Zillow, Opendoor, Keller Williams or others may offer to buy your house outright for cash. These so-called "i-buyers" (think "Car-Max for real estate") can help you resolve your situation by offering you quick cash that is well below fair market value.
Or you can try to sell your home by owner. Learning how to offer it for free on CraigsList.org and Zillow's by owner sections is possible. You will, however, have to deal with pricing, marketing, open houses, showings at unexpected times, and a bewildering array of agents offering to help simplify your life. Since sellers pay real estate commission for the buyer's agents most buyers find it most convenient to homes listed by agents in the MLS. Those who take the trouble to find, view and offer to buy non-MLS, by owner, homes expect to pocked the commission savings in the form of a lower price. Selling by owner rarely gets you full fair market value. Maybe using an agent is worth it after all?
Certainly listing a home for sale with an agent who puts it in your local MLS exposes it to the broadest market quickly so that you may get the lion's share of fair market value. You can use mom and pop shop local agents, a notorious national-branded discount brokerage known for having a great many less experienced agents working on salary instead of commission, or other options up to agents associated with major branded franchises such as Keller Williams, Coldwell Banker, Berkshire Hathaway, Century 21, or RE/MAX. You should expect outstanding full service marketing from the big-branded agents. Working with established professionals should provide you with orderly, proven plans for progressing the sale of your property with minimum stress or surprises.
The Gold Homes Team has handled many sales of bank-owned, foreclosure avoidance, estate, landlord, vacant, or damaged properties in addition to hundreds and hundreds of new construction and normal resale properties. Due to this experience we are in regular contact with a number of investors who are seeking to buy problem properties. Our customers come back over and over. For a free, no-obligation consultation on your options and opportunities just call us.
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