Rough Properties Can Be Moved Quick; There Are Trade-Offs

Imagine you’ve got a property that is only considered to be worth about $4k a year in terms of taxes—in a lot of big cities, that’s a house worth $100k or less. Maybe as a bank you’re moving a property where previous owners abandoned a mortgage.

Maybe you own the house, and it’s time to cut your losses. Sometimes good neighborhoods dry up—economies can be volatile. A really decent house may have its value cut into a fraction of what it should be if some vital industry dries up.

But sometimes, the neighborhood is alright, and the economy is doing fine locally; the property in question just isn’t in good shape. Maybe there was a small fire in the basement. Maybe you manage it as a rental and the tenants tore it up.

Whatever the reason, houses in bad condition are out there, and they need to be sold; if only for the land beneath. In this writing we’ll cover a few things you definitely want to consider when trying to move sub-par property.

Little Fixes For Curb Appeal Are Advisable If Feasible

Some properties are so far gone, you’re basically selling the land beneath the house and letting the new owners decide whether to demolish the property or fix it up. Others are in a spot where you could replace lightbulbs, refinish floors, mow the lawn, mend the fence, and do a hundred little “honey-do’s” over the weekend.

It will depend on how far gone the property is. The better it looks, the quicker it will sell; generally. If there are serious foundation issues, that’s going to make potential buyers get cold feet. Then again, some buyers are real estate investors simply looking for a property that’s marginally presentable and can be used as a rental.

If your property could be used as a rental for five or ten years, then flogged off, you might as well fix up the little issues and present the structure’s “good side”. If curb appeal facilitation isn’t feasible, then don’t worry about it and just list the thing low. Buyers who come will likely be more interested in the land beneath than the structure above.

MLS Solutions Can Expand Property Visibility

Multiple Listing Services put a property in front of, potentially, the whole country—perhaps even some foreign buyers. Many MLS options today are entirely digital, though there are local print publications which may work with MLS solutions in some areas of the country. Regardless, for a small and “flat” fee, MLS services can make selling a house a lot easier.

Compromises: As-Is Agencies

There are “as-is” buying agencies which will pick up your property, but they’re definitely going to “low-ball” you. They have to. Either they’ll fix up the property to a more profitable minimum on their dime, kind of how a used car dealer makes trade-ins salable, or they’ll pay to have the home demolished and sell the land. Either way, it’s their “dime”.

So you can sell homes that are “imploding” to such agencies; however, they’re not going to give you the full potential value for it. That said, there’s a mild “hack” here: you can get the property appraised through such agencies, see what they’re willing to buy it for, then mark-up for the reduced bid they pitch; perhaps even selling for more than you thought.

Full Disclosure: Tell All Issues To Any Buyers

If you’re selling the property personally, fully disclose known issues. A realtor will. Should a property have a bad foundation, the original tenants leave, and a bank tank over, then the foreclosure agency managing the property on behalf of the bank will send realtors who tell potential buyers the complete story on a property, as they know it.

That’s in the event such sellers are “honest”. But smart realtors know that screaming “deals” will make investors suspicious. Accordingly, they’ll reveal the issues of the property to potential investors up front.

The end result will be, usually, multiple bids from multiple investors; the seller can then take the highest bid. It’ll be lower than the listed price, but likely higher than expected. Certainly, all selling situations differ.

If Personally Selling, List High And Let Them Talk You Down

This concept was alluded to in the previous post. When you’re selling a “rough” property, have its best sides shown on MLS services, but expect to be “low-balled” when potential investors actually review the property.

If you have something worth $40k in reality, list it at $60k to $80k, and explore offers. Usually offers will be higher than 50% of listed value, so if you listed at twice actual value, even after being “low-balled” you’ll see more money in the end. Just be ready to entertain low-ball offers.

Getting Difficult Properties Sold
Be flexible in pricing, disclose known issues, consider as-is agencies, explore MLS solutions, and fix what you can. Guidelines like these will at least help get you pointed the right direction. Here’s a short list of some more tips to further enable sale of such properties.