As IS: The Worst Way to Sell
A Month of Chores May be Worth $50,000
By: Scott Pearson, Pearson Realty
October 2013, ENDEAVOR News Magazine
You’ve seen the signs around town. They’re yellow and hand drawn declaring, “We Buy Houses,” in a style that reminds you of a garage sale poster. So, what’s the deal? Who are these buyers? Are they legit? Depends on your definition.
The real estate market has several as is buyers lurking within it. They take out ads in the Golden Gazette, the County’s publication directed at seniors. And potential sellers who answer these ads are usually folks of limited means or physical ability. They are sellers who are convinced that they simply do not have the means to properly prepare a house for sale.
You can probably guess the pitch that as is buyers use. Quick sale, no cleaning, no open houses to disrupt your life, no repairs, and no real estate agent commission. However, if you take their deal, chances are you will be selling your house for far less than it’s worth.
So what does the seller pay for the convenience of a quickie sale? Likely, the price the seller gets will be up to 20 percent less than they would have gotten in a regular sale. On a property that would appraise at $350,000 in a regular sale, that’s $70,000 less. That’s serious money.
And what do these as is outfits do with the house after purchase. Well, they flip it of course, and usually in a short period of time to investors who will give the initial as is buyer a small premium of eight percent as a finder’s fee. Then, the investor will clean up, re-freshen and prepare the house for quick sale at market prices.
Now, there’s nothing nefarious about this corner of the residential market, but to a real estate agent that is trained to obtain the best selling price for their clients, it’s a little disturbing. Preparing a house for sale does not have to cost an arm and a leg. Often its just a cleaning crew, a couple of buckets of paint, and a little care to the landscaping. And, even if you hire people to do all the work, the cost is most often under $5,000.
Good real estate agents can recommend reliable workmen and will even check to assure that the work is performed correctly. We also work with out-of-town owners who may need to sell the house because the resident has died. Our goal is to maximize value while minimizing the chores associated with selling the home.
As for a quick sale, most houses are under contract within 40 days after listing and often are sold within two weeks. Therefore, once the house is spiffed up, the sale usually occurs rapidly in this current market of low inventory.
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