We get asked this a lot. How to sell a distressed property. In fact this is a lot of the business we do in Connecticut. We work with homeowners that have a hard time selling their house with a realtor. So they come to us with a house that that has a few problems and need some repairs but they don’t have the money to do it and don’t wan tot take out a high rate loan to fix things if they know that that they will end up spending more on the repairs to get the house sold. They are desperate to sell a distressed property.
For everyone who need to know how to sell a distressed property in Connecticut, we’ll cover the options you have available. Traditional listings for this type of property are not a good idea because they don’t attract most buyers, take far too long, and are too costly for most owners of a distressed property.
Life can bring unexpected changes that leave you searching for solutions. Homes can fall into states of disrepair that are far beyond the owner’s capacity to handle. There could have been a death, divorce, illness, or job loss, leading to lost income or a forced relocation at play.
Lots of people bought into houses that they couldn’t afford. The high monthly payments eating into their paychecks along with taxes, insurances and utilities can be too much to handle. The first thing people do is not make the necessary repairs on their house. It might be something simple like not replacing a roof shingle, fixing a gutter, or spending money to run a dehumidifier in the basement. These things are called deferred maintenance and they cost a fortune to fix what happens when you avoid them.
So. what is a homeowner to do? Let’s dive into some of the options to sell a distressed property in Connecticut.
Professional Buyers
There are always two sides to everything and this holds true when considering how to sell a distressed property in Connecticut. Let’s look at using the service of a professional cash buyer when you’re selling. Due to the nature of cash sales, you’ll benefit time-wise because of the ability to perform extremely quick closings. It really only takes about 7 to 10 days to close when the buyer is paying all cash, the title is clean and the attorneys are communicating.
Additionally, the sale is as-is and there won’t be any downtime waiting for the right buyer. Nor will you be required to make the investment of your precious time and money in repairs. Another advantage is you’re not carrying any legal risk, as with selling on your own. If you are wondering why its because it is an as is sale. It means that the buyer is buying it without doing an inspection. They are willing to accept the problems with the property based on pictures, video, or a walkthrough. Since most professional buyers pay all of the closing costs, you’ll save even more.
Now, because the professional buyer is taking all of the risks, and offering the advantages of cash sales, their offers are below the prices being realized in the current real estate market. A word to the wise, do your research on who you’re dealing with. Regrettably, there are lots of unscrupulous buyers who may try to take advantage of time or financial constraints they learn you’re up against. This happens all the time if you are being foreclosed on and the auction is coming up. There have even been lawsuits because some cash buyers lock up a property preventing any other cash buyers from entering an agreement with you all the way to the auction where they buy the house for pennies on the dollar.
Do-It-Yourself
Selling a distressed property in Connecticut on your own may sound appealing because you’re in charge. Additionally, you won’t be responsible for an agent or auctioneer fees, which can negatively impact your bottom line on the sale. If you’re knowledgeable on marketing and all of the legalities involved, while you may need to invest a great deal of time, you can save money by handling everything yourself.
Conversely, inexperienced in marketing and the legal details, selling on their own often leads owners to failure. It’s not as easy as just listing it For Sale By Owner (FSBO) or on Facebook Marketplace. You have to be able to advertise the property hard. Every day talking with people going to where real estate investors are and making connections to find the buyers that are willing to look at the property. Its a lot of skill and hard work that you have to develop to get that best price. Not only don’t homeowners realize the highest profit on their property through their errors, but they could also end up in a legal nightmare with no way out.
Professional Auctioneers
Property auctions rarely imitate art, where fantastic prices are realized in movies and on television. Avoiding the headaches of showing your property is one of the favorable aspects of auctions. Additionally, these properties close within 30 to 40 days and sell as-is, so you won’t need to continue to pour time and money into repairs and upkeep of your distressed property in Connecticut.
While there are advantages to using a professional auctioneer, keep in mind the usual fee for their service is a rather high 10 percent of the final purchase price. That is a whole lot more than a real estate agent who usually asks for 5-6%. Should the bidder be responsible for the auctioneer’s fee, lower bids overall are incentivized. Otherwise, you’ll be responsible for their fee, and absorbing additional costs.
Due to the nature of auctions, the outcome isn’t guaranteed, you may be up against the issue of low attendance. There is also the innate competition when a high volume of properties is up for auction at the same time, leading to lower bids. People who buy are auctions never over pay.
No matter which you choose, make educated decisions by taking the time to understand all of your options. Would you like to learn more about how we can help you sell a distressed property in Connecticut? Just call Next Door Properties today at 860-704-9513 or send us a message any time!