We’re betting that you have spotted the signs all over your town that have been stapled to telephone poles or staked into the ground. They say things like “We Buy Ugly Homes” or “We Buy Any House.” These signs are there to tell you that there are companies willing to purchase your house despite how old or run-down it is. These people are generally investors who keep an eye out for homes that they can buy and flip to make a profit. Many real estate investors are now using house flipping as a lucrative way to up their profits, quickly and easily.
When you are trying to sell your home, you may be interested in hearing what these companies have to say. Unfortunately, house flipping investors may not be the right solution for your particular situation. Before calling and inquiring after one, it is important to learn more about what they do.
Remember, the “we buy any home” company has one major goal in mind- buying homes for as cheaply as possible. Many target desperate homeowners who have been attempting to sell their house for months. They may offer 50% to 70% of how much the actual value of your home is depending on your eagerness to sell. House flipping means that the investor is out to purchase a home for much less than what it is valued at, repair it, and then sell it for a big profit. It is known as a “flip” because it is usually done quickly.
Before you sign away your home to one of these companies, read the pros and cons first.
What are the pros of selling your home to a local house buying company?
1. It’s a lot easier to sell your home
This is especially true when your home needs a lot of work done to it before you can actually make a profit off of it. By choosing a house flipping company you are avoiding the headache of trying to get a good price on a home that needs repairs. It also quickly frees you from owning the home, especially if you are desperate to sell.
2. There is only one decision to make
You only have to decide which house flipping company you will be selling to. You won’t have to worry about how you are going to make repairs, what real estate company to use, and who you want the house to be sold to. The house flipping company will give you an offer and that will be that if you decide to accept it. Since most of the companies pay cash, the closing process is also much easier.
3. You do not have to worry about getting the best real estate agent
With the influx of real estate agents, especially all over social media, finding the best one can be tricky. You don’t want to just hire someone because they have an ad on your local park bench! When you go with a house flipping company, you won’t need to worry about finding a reliable agent.
4. You won’t have to do the “sale by owner” offer
It’s not easy trying to sell your home without a real estate agent. Sure, you may save on the commission, but is the extra hassle worth it? In order to sell a home on your own, you will need to take your own excellent pictures, market your home online, be available for showings at times that may not be convenient to you, and deal with the actual financing part yourself. Selling your home to a flipping company avoids this whole ordeal.
5. Your home is likely to sell no matter what
If your home has deteriorated over the years, selling it yourself or through a real estate agent is going to be hard. You may even be living in a house that is nearly uninhabitable. A company that buys houses like Seller’s Advantage will not care about how poorly kept up your home is. They will likely offer you money for the house, even if it isn’t very much. They may even be after the lot the home is sitting on and not the house itself. If the house itself is in terrible shape, it is often more lucrative for the buyer to tear it down and rebuild.
In an ideal world, every real estate agent would be like a Fairy Godmother of home selling. Their industry expertise would take care of every hurdle, from repairs and staging to finding the perfect new family that is eager to buy your house. But in the real world, things aren’t always so easy or nice.
As someone motivated to sell a particular house, you are expected to trust your real estate agent completely. They are supposed to guide you through the complicated and obstacle-ridden path to a successful sale. They are supposed to fully grasp the logistical, legal, and marketing requirements to complete the sale and. And part of the reason you pay them a portion of the profit is because a real estate agent, supposedly, can save you from the headaches and setbacks of trying to handle the process on your own.
But it doesn’t always go as smoothly as we’d hope. Sometimes, your luck just turns and your agent did their level best to help. And sometimes the agent themselves fails to come through. But they still want their commission whether the sale was easier or harder with their help.
Today, we’re here to talk about some of the most common ways that a home sale can go downhill, even when a professional real estate agent is supposedly arranging everything for success.
Buyers Can’t Back Their Bid
By far the most common reason that a home sale falls through is inexperienced buyers combined with less-than-thorough real estate agents. Remember there are two agents involved in every sale, and technically both of them should ensure that a buyer is financially capable of completing a home purchase before entering the negotiation stage. But it often gets missed.
First-time buyers usually don’t fully understand how the finances work when buying a house, and will make a bid based on what they think their personal finances can afford. However, if they have not had this amount pre-qualified recently buy an available bank, then their bid means nothing. Some sellers see months wasted to negotiating with a buyer who, in the end, can’t get a bank to actually provide the mortgage to them. So the sale falls through and your back marketing for potential buyers again.
Competitive Bidding vs Bank Appraisal
But even if a bank has pre-qualified a home purchase within the buyer’s bid range, the bank might not actually approve the purchase of your house. Why? Because they only back mortgages for homes they feel are worth the buying amount. Before approving the mortgage, the bank will likely send an appraiser, someone who estimates what your house is really worth, not just what your buyer is willing to pay.
If the appraiser decides that the house is not worth the amount of the mortgage, the bank won’t feel that ‘owning’ the house is reasonable collateral for the amount of money they are putting up. And, in effect, the buyer will be denied a mortgage and your sale will fall through.
Buyers Back Out After the Inspection
A home bid with an inspection contingency is a lot like a job offer with a reference-check contingency. It’s like saying “I like everything about this house and will take up your time with negotiations and final-sale preparations. But if my inspector sees a spider, I’m out.”
In other words, inspection contingencies have a huge potential to waste your time. If you are going to sell through the usual channels, your real estate agent needs to make sure that buyers get their inspection before negotiations even start. If they fail to enact this step and inspection becomes a sale contingency in the contract, this is a great way to waste months and see a sale fall through when a known maintenance issue is ‘discovered’.
Simple Cold Feet
And some buyers just plain back out of a deal. This is often known as cold feet, or buyer’s remorse. Most home sale deals allow buyers to back out within the first week or two after the final papers are signed. This is to ensure that if there really are shady issues that are revealed or their finances suddenly take a turn for the worse, that buyers are not trapped in a purchase that will financially ruin them.
However, most of the time when buyers back out, the reason is just emotional. It turns out, after a month or more of negotiations and financial preparation, that they’re not really ready to commit. A good real estate agent can save you from this wishy-washy kind of sale failure, but it takes a real expert to predict when seemingly good buyers are going to bail at the last minute.
Home Sale Contingency
Another really serious problem with home sales, even ones that seem to be a sure thing, is the buyer’s home sale contingency. It’s not uncommon for people to plan on buying a house with the profits of the house they’re about to sell. This is a complicated financial and logistical maneuver and, in theory, it’s not a bad idea.
But no good real estate agent is going to put a home sale contingency into your selling contract. What this means is that no matter how motivated and ready the buyers are, they won’t be buying until their seller’s agent gets their home sold. So your entire process is now held up on someone else’s dubiously successful home sale. And you can’t even find new faster buyer because now you’re contractually bound to wait.
Negotiations Keep Falling Through
With a truly bad real estate agent (and there are a few out there) you may not even reach the contract phase for things to fall through at the last minute. Some agents can’t even get through the negotiation phase where everyone agrees on a price, terms, and a few reasonable contingencies.
You know you’re in a bad spot if your selling process keeps getting to the negotiation phase and falling through because you may never actually see closing documentation at all.
Property Title Complications
And even if you get to the closing paperwork with banks on board and everyone ready to sign, things can still go wrong! If your agent hasn’t done their job, there could be unknown liens or other restrictions on the property itself. Your agent should have either checked the title status for you or walked you through the process of doing it yourself
Title complications are especially common when you inherit a house that you didn’t buy and haven’t been managing financially. So it’s easy to officially own a house that also has liens on it that you had no idea about. Interestingly, buyers can also be stopped by this phase in the process. If they have outstanding debts or court orders that put liens on their finances and prevent the completion of the sale. Which their agent should have known about.
Real Estate Agent Wants a Bigger Cut
Finally, even if a sale goes all the way through, it might not be as profitable as you’ve been hoping for. Traditionally, your seller’s agent will want about 5% of the final selling price as their commission for helping. And if they really have facilitated a fast, profitable sale, most sellers don’t mind paying the cut. But 5% isn’t mandated by any agent or broker regulations, it’s just standard.
There is always a possibility that your agent will ask for even more than the traditional cut, even if they weren’t helpful and allowed obstacles to cause problems at every turn. You might even find that that bigger cut has been in their contract the entire time, unmentioned in small print, to catch you at exactly this moment.
Selling a house through the usual agent-run channels is not always the best choice for a homeowner eager to get a house off their hands. Especially if you don’t want to invest in repairing, repainting, and staging the house the way real estate agents usually recommend.
If you really just want to get an unwanted house sold with no delays, hassles, or unexpected fall-throughs then we have the answer for you. Here at Seller’s Advantage, we will be happy to buy that troublesome house quickly and for cash. No drama over mortgage approvals, no buyers with cold feet. And you won’t have to pay utilities or property tax for every month it sits on the market.
For a no-obligation inspection and consultation on the house you want to sell, contact us today! We’re ready to check out your house and give you a cash offer. No setbacks. No problem.
When thinking about selling their home, homeowners may have this question in the back of their minds. With all the other responsibilities in life that need their attention, this is a valid question to ask before selling a home. In an effort to help, let’s discuss the process of selling a home and examine whether or not it’ll be an overwhelming experience for homeowners.
Variables and Perspectives Involved with Selling a Home
These are some of the variables that could make selling a home an overwhelming process for homeowners. The specific situation and perspective of each homeowner will ultimately determine whether selling a home with traditional methods is worth it for them or not.
How Long Does It Take to Sell a Home?
The National Association of Realtors says the average is three weeks, according to a CNN Money article, which explains:
“Low housing supply has pushed up home prices and created multiple offer situations and bidding wars throughout the country.”
The overall time it takes to sell a home with traditional methods can be from weeks to years; a safe estimate for most situations would be a few months. If homeowners don’t have the time nor the inclination to spend this time and effort selling their home, they should consider other options, such as selling as is for cash.
How Much Effort Does it Take to Sell a Home?
Time and effort are similar, yet the effort aspect is what will make the process of selling a home with traditional methods overwhelming. While the variables and perspectives of homeowners will differ, each must consider whether they’re willing and/or able to put the effort needed into selling their home.
Basically, there’s a lot of steps involved in the traditional home selling process, which may prove to be an overwhelming experience for homeowners not prepared or able to spend the time and effort needed to navigate and manage the complexities.
While real estate agents and broker companies will handle much of the details, homeowners will still be responsible for hiring contractors and inspectors, making decisions, communicating with agents, preparing the home for staging, etc. Homeowners could have a property management company handle these details, yet this would cost extra money they might not have or want to spend.
While it depends on the variables and perspectives of each situation and homeowner, selling a home with traditional methods, at the very least, requires a considerable amount of time and effort. This may include large amounts of upfront money for repairs, inspections, marketing, and upgrades as well.
If homeowners aren’t prepared or able to spend the time and effort necessary to sell their homes, the process could very well be an overwhelming experience they’d rather avoid. This is especially true if they have a demanding job and other pressing responsibilities in their lives. If this is the case, homeowners may want to look into alternative methods, such as selling their home as is for cash using a quality company with a good track record.
If interested in learning more about selling a home as is for cash please contact Seller’s Advantage online or call at 1-800-208-3243 to get a no-cost, no-obligation quote. Seller’s Advantage purchases homes in AS-IS condition and can give homeowners a cash offer in as little as 24 hours.
Selling a home can be challenging. Though you might think that your home could sell right away, it doesn’t always work that way. Some sit on the market for months or even years before the right person comes along.
Unfortunately, a contract doesn’t necessarily mean that your home is going to sell. If there is a problem with the inspection, you are going to have to figure out what you are going to do. You might be willing to fix some problems but not all of them. You may not want to deal with any of it.
Here are some problems that can quickly stop your home from selling.
Most buyers will walk away from a home that has water problems. They don’t want to deal with flooding in the basement or a roof that is leaking.
Any water problem can lead to even more problems. You may have mold or rot in your home. Water can also destroy the materials that make up your home, leading to all sorts of problems.
Because water can cause damage in all areas of a home, most buyers will pull out on a deal really fast when they hear that you have water problems.
Most buyers won’t touch a house where there are structural issues. Structural issues include problems with the foundation, support system, walls, and other things that hold a home up.
Not only will your buyers worry that they won’t be safe in their home, but they may also worry about it lasting for a long time. They don’t want to struggle to pay a mortgage for the next thirty years when they aren’t sure if it is going to last that long!
The cost to fix structural issues really depends on what is going on with your home. If your foundation and support system aren’t holding your home up right, the cost to fix it could be more than you ever imagined.
Bad or failed septic system.
Septic systems are a necessary part of a home. You can’t sell a home with a septic system that fails inspection unless you sell it to someone who has cash. Nobody will be able to get a loan for a home that has a bad septic system.
Septic systems are very expensive to fix, often costing around twenty thousand dollars (or more) for a brand new one. However, if you don’t take care of the problem, you are going to struggle to sell your home.
Poor water source.
Buyers expect (as they should) to be able to get safe drinking water at all times. They also expect to get as much as they need.
If your home has a well, it is important that it is working properly. It is also necessary to make sure that the water that comes out of your well is safe to drink.
Though some water issues aren’t too expensive to fix, if you have to replace your well, it can be very costly. If you don’t, you will struggle to find a buyer. Most loan officers won’t finance a home without a working well.
Infestation of pests.
Though most homes have problems with ants and other rodents occasionally, people aren’t going to want to buy a home that has an infestation of them.
Termites can do a lot of damage to a home so most people will walk away quickly if they notice termite wings. They can do major damage to the structure of your home.
Rodents, including mice, rats, and bats will also push buyers away. Most people don’t want to buy a home that has critters living in them due to different health concerns.
If your house has a bad odor, you might push some buyers away. People don’t want to smell your dinner for last night so you should be careful what you cook prior to any visitations and open houses.
People also don’t like the smell of pets. If you have a smelly dog or cat, you might want to find somewhere else to keep him or her while you are trying to sell your home.
If you know that you are having an open house, you might want to bake some cookies or pies to give your home a nice smell. Some people try to use candles and air fresheners. However, this can also deter people who can’t handle smells. Others may wonder what you are trying to hide. They might pass just because they are afraid that you might be trying to hide mold or another stinky problem.
Sex offender who lives nearby.
More and more parents look at the sex offender list before they decide where they want to live. They don’t want their children anywhere near someone who is a convicted felon, especially one who was charged as a sexual offender.
Unfortnealy, there is nothing that you can do about this, and you just might lose out on some great buyers due to the neighborhood that you live in.
Two of the most common reasons that buyers walk away are water problems and structural issues. Water problems can cause mold, rot, and other problems. Structural issues often make people feel like they wouldn’t be safe in their new home. They may worry that your home wouldn’t stand up in a bad storm!
If your septic system fails inspection, you don’t have much choice in what you do. Nobody will be able to get a mortgage for a home without a septic system. You will either need to fix it or accept cash offers only.
Smells can also deter people. Make sure that you are careful with what you cook before any showings or open houses. If you have pets, you may want to keep them somewhere else to get rid of some of their smells. You also want to be careful if you use candles and air fresheners to freshen up your home. The smell may bother some people, and they can’t enjoy your home because it gives them a headache. If you have too many candles going, many people will worry that you are trying to hide something so they will walk away.
Contact us to sell your house fast! We pay cash for homes in any condition in as fast as seven days.
When it comes time to move into a new home, you may be trying to decide whether or not you want to sell it. You may really be considering renting it out so you can make a little extra income. You may have also inherited a house and, instead of selling it, you are thinking about renting it out.
However, being a landlord is not for everyone. It is not an easy job. It takes a lot of work, as well as time and patience to be a good landlord. In fact, there are times when it is much better to sell your home and walk away.
Here are some reasons why you shouldn’t rent your home (or an inherited one) and just sell it instead.
Many people love the freedom of walking away after their home is sold.
Owning a home is a significant debt. Owning two homes can feel crushing. Because of this, many people gladly sell their home to get away from all of the stress and debt that comes with home ownership.
They also love the feeling of money in their pocket (instead of another home to have to take care of).
Inheriting a home can be a lot of work, especially if it wasn’t something that you were expecting. It can actually feel like a burden instead of a blessing.
Because of this, many people prefer to sell the home and take their cash and walk away. If they use the money wisely, they can pay off some of their debt (maybe even their own home) and have some money in the bank for emergencies.
A large amount of money can go a long way to improving someone’s life.
Most people can’t afford to buy another home until their first one is sold.
The truth is that you are going to need a down payment (and a significant one) in order to buy your next home. Most people don’t have the option of owning two homes because they need the money. They have no choice but to sell their first home in order to have money to buy their next one!
Many people want out now because they are losing money.
The real estate market is constantly fluctuating. Though many people thought that buying a home is a good investment, there are times when holding onto it could be costing you money. If the market is high, you might want to get out before it drops any lower and you lose money on your investment.
You can’t make any money renting your home.
If you are in over your head in your mortgage, you might not be able to get enough with rent to actually cover the cost of your monthly mortgage payment. Your mortgage may be a lot more than typical rent in your area.
Add in other fees, like insurance, taxes, repairs, and other expenses, and you might end up paying your tenants to live in your home, without any of the benefits of owning a home. You have to make sure that it is worth the hassle of becoming a landlord.
Not only are you going to have to make sure that your tenant is paying the bills and the rent, but you are also going to be in charge of maintaining your home. If something breaks, it is up to you to fix it (or find someone who can do the repairs). This can be quite stressful, and the job is not for everyone.
You might be moving away (or not close to the home that you inherited).
It can be hard to rent a home when you live elsewhere. With people who relocate, especially in the military, it can be hard to be a landlord when you are not there. If your inherited home is several hours away, the distance can make it hard to be a landlord.
If something breaks in the middle of the night (or actually any time), you are not going to be able just to drive over and take a look. Instead, you are going to have to rely on your tenants and the people you hire to fix these things.
Renting out your home is not for everyone. In fact, many people can’t afford to even think about this option. They need the money from the sale of their first home so that they can buy their new home. Even if they did try to rent it out, they might not be able to make enough money to even cover the monthly mortgage payment.
If you inherit a home, you might not be prepared to take care of two homes at once. It can feel like such a burden instead of the gift that it was. A cash offer might seem more appealing at this time. It can go a long way to improve your life.
One of the best reasons to sell your home is so that you don’t have to be a landlord. It can be stressful to have to maintain a home that you don’t live in. Things are going to break and tenants are going to mess your home up. In fact, the truth is that many people can’t handle it.
It is even harder when you don’t live nearby. If you are several states away, you can’t just drop everything to see what is going on when something breaks. You are going to have to trust your tenant and your repair people since you can’t see it for yourself.
Most people are much better off selling their home instead of trying to rent it out! Don’t have the time to clean the house up and put it on the market, only to wait weeks or months for it to sell? Don’t hesitate to contact us today. We can get the process started and our company will buy your home out of your hands in less time than you ever imagined. The possibilities could be endless with a cash offer!
Owning a home is a great way to build wealth and equity. Homeownership is a component of the American dream. However, like many investments, there are costs associated with it too. Some underestimate how much home upkeep truly costs. They are unprepared when a major repair comes their way. Suddenly, that home is more of a burden than a benefit. But this doesn’t have to be the case. The key is to not let those repairs take you by surprise. Then you can decide if you want to take the time to make those repairs or, sell your house and have cash in hand to buy something new.
1. A new roof:
Replacing your roof is a large cost for your home. However, it shouldn’t catch you off guard. A new roof should last between 20-25 years. How old is your home? When was the roof last replaced? This will help you create a timeline to budget your repairs. The costs of the replacement will vary. If you have the skills to replace the roof yourself the costs will be between $2,000 and $6,000. If you contract out the work, you will pay between $5,000-$12,000. The size of your home will determine how much you spend.
Don’t ignore the signs it’s time to replace or repair your roof:
Some will wait until the last minute to repair or replace their roof. They don’t have the money liquid to make such an expensive repair. They wait until there are leaks in the roof and their personal effects are being ruined by the water damage. It doesn’t have to be this way. Look at your roof. Are there missing shingles? Do you see weak areas on the roof? If so, it’s time to call a roofer before the damage gets worse.
Eventually, the best roofs must be replaced. But, with some preventative maintenance, you can get a long life out of your roof. Every 5-10 years have a professional come to inspect the roof. This way they can catch damage early before it becomes a huge repair.
Your HVAC can last nearly 20 years. Common repairs won’t break the bank either. The average cost for a furnace and air conditioner repair is around $300. Replacement units are a bigger investment. A new AC is a little over $5,000 and a new furnace is about $4,000.
HVAC preventative maintenance:
Once spring rolls around it’s a good idea to have the units inspected. A technician can do a tune-up and cleaning of the units. This will help you get the longest life out of your air conditioner and furnace.
3. Hot water heater:
Replacing a hot water heater is not as expensive as a roof or HVAC. But it will still set you back a bit. The telltale sign it has broken is that cold shower. However, keep your eye out for rust colored leaking and strange noises coming from the tank. These are signs of a problem. Repairs cost around $500 and a replacement tank is around $1,000. Tankless water heaters are also an option. They are more efficient than the standard hot water heater. Yet, they are also more expensive.
Don’t procrastinate with water heater repairs or replacement:
Don’t ignore the signs of a broken hot water heater. If it bursts or begins leaking you will have the water damage bill to pay too. You don’t want to add mold remediation to your list of home expenses.
Hot water heater preventative maintenance:
Every few months check the pressure valve to make sure it’s operating properly. When you are doing your home maintenance during the spring flush the hot water tank. This will get rid of particles and build up that could lead to a burst tank.
4. Foundation repairs:
Do you struggle to close your doors correctly? Do you see cracks in your walls? These could be signs of a foundation problem. If caught early, crack repairs run around $500. You don’t want to ignore these problems as they can turn into safety issues over time. Holding off on leak repairs can lead to mold. A major foundation replacement like stabilizing runs around $10,000-$12,000. A structural engineer can tell you what to do to resolve the issue. Steel beams may need to be installed to stabilize the house.
Foundation repairs and resale value:
Trying to sell a home with foundation problems can feel impossible. But, investing in the foundation can help your resale value. Having the home stabilized makes the home more appealing to buyers.
Budgeting for home repairs:
Your home repairs don’t have to break your bank. But it will require putting aside money each month for potential repairs. Many recommend the square foot rule for budgeting. You should put aside $1 per square foot of home per year for maintenance. If you own a 2,000 square foot home, you should put aside $2,000 per year for repairs and replacements. Another method you can use is the 1% rule. Put aside 1% of your home’s value per year in repairs. These are guidelines for your maintenance budget. But there are other factors to consider.
Age: If your home is new you probably aren’t expecting too many major repairs. If the home is 20-30 years old expect to be making some major repairs soon.
Inclement weather: If you live in a region that is susceptible to inclement weather your repair costs may differ. Heavy snow and extreme cold are taxing on a home. If you live along the coast you may be at risk for hurricane damage. The climate may allow pests to thrive too. If your area has termites consider pest control and prevention in your maintenance.
Flooding: If you are on a floodplain or at the bottom of a hill this will increase your maintenance costs. You may also be required to carry flood insurance on the home. This is a good question for your insurance agent.
Single family home, condo, or townhome: If you live in a single-family home you must pay for all maintenance. But if you live in a townhome or condo your HOA dues will cover several costs. You would be responsible for the interior repairs like electrical and plumbing. The HOA would cover exterior maintenance like roofing and foundation repairs.
Home ownership is a great opportunity to build equity. Yet, you don’t want to be drowning in home repair costs. Home ownership is meant to help you build wealth not bankrupt you. Have a budget, manage your preventative maintenance, and anticipate major repairs or replacements. This way your home will be a benefit instead of a burden.
Contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.
When exploring options for dealing with a fixer-upper home, owners will likely consider the fix and flip strategy. With popular reality television shows making the practice seem easy and the possibility of high profits motivating owners, it’s not hard to imagine how the fix and flip strategy seems like an enticing option.
1. Steep Learning Curve for First Time House Flippers:
Learning the ropes with fixing and flipping a home is much like that of starting a new career. The learning curve is steep and requires commitment, time, investment, and a desire to learn about real estate, contractors, law, marketing, building codes, taxes, and more.
Basically, this isn’t a strategy for those who want an easy way to deal with an existing home or an easy way to make money from an investment. Unless a person wants to make this strategy part of their real estate investment career and is willing to learn the ropes, the fix and flip strategy isn’t likely for them.
“You have to know at least a little about a lot of different things to be able to manage the business. In my opinion, the most important knowledge required is real estate market specifics. You absolutely have to know how to value a home and what the buyers want, which includes popular designs and decor.
…it’s very tough to be successful in this business if you don’t have a good understanding of construction, which includes the dozens of specific trades required in building a home.
…you also need to know real estate and business law, insurance, contracting, negotiations, project management and more.”
2. Large Investment Needed with Unknown Return:
One of the biggest misconceptions about house flipping is the profit margins, at least for beginners. The truth is the fix and flip strategy requires a large investment and doesn’t guarantee a profit in the end. This is especially true with beginners who haven’t calculated the comprehensive expenses involved from start to finish.
The Washington Post article mentioned before explains more:
“Flipping a home is a costly endeavor. It involves the input of dozens of specialists, all of whom have to be paid. No one can do all of this alone. Even if you could, it probably wouldn’t be the best use of your time.
…There are a lot of people between my final paycheck and me.
…I have to pay my lenders and investors for the use of their money.
…I have to pay the agent who brings me a buyer.
…I also have to pay lawyers, contractors, material suppliers, inspectors and appraisers. And the tax man gets me about three to five different times for the same deal.”
The author, who’s also a licensed real estate agent, goes on to explain the slim profit margins involved with flipping houses:
“Sure, I might make a $40,000 profit on a project, but that is a really low return if I had to spend $600,000 on it.
…Despite what the gurus tell you, this is a very high-risk business, especially for those who are new. You have to rely on a lot of other people. The biggest risks are in valuing the property, determining the renovations and managing the construction.”
3. The Amount of Time and Effort Needed to Flip a Home:
The fix and flip strategy can work, yet owners must be willing to take the time and expend the effort necessary to make a decent profit. How much effort and time it takes to do this highly depends on the specific variables involved; often for beginners, the entire process takes longer and requires more effort than originally expected.
“A couple of years ago, I bought a house that was in really bad condition…I bought the house on 4/28/14 and sold it on 2/26/16!”
…Time dragged on and on, and the work was not getting done. The contractor had a number of excuses, but then I made a huge mistake. I paid him a partial payment for the work he had done, and then my bookkeeper paid him again because I forgot to write ‘paid’ on the invoice. He got paid in full for the job before he was done. After that, he would almost never work, and I had to threaten to sue him multiple times to get anything done. In the end, he finished the work, but it took him almost a year!”
This is a good example of the type of delays and hindrances owners may face when flipping a house. This story was due to contractor issues, both with trying to find one and then trying to get the one hired to do the work. These aren’t the type of variables owners plan on dealing with, yet they can happen to even experienced house flippers.
Basically, the fix and flip strategy isn’t suited for everyone and every situation. For situations where homeowners want to sell quickly for cash as is, finding a reputable service to deal with is key. Dealing with a reputable service like Seller’s Advantage ensures homeowners get the best price in the quickest time frame.
If interested in learning more please contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.
Being a landlord isn’t as easy as it may seem on the periphery. Sure, with ideal tenants and no big surprises, renting a house can be a fairly easy way to make an income or pay off a mortgage, yet this ideal scenario isn’t generally the norm. In an effort to give potential landlords a balanced view, let’s examine the downside of being a landlord.
1. Dealing with Tenants
Let’s start off with likely the most difficult part of being a landlord, which is dealing with the tenants. Prospective landlords shouldn’t underestimate the difficulty of dealing with tenants in the course of being a landlord long-term.
This isn’t to say all tenants are going to be difficult, dishonest, unclean, destructive, etc., yet it does mean that dealing with tenants requires discernment, patience, resolve, commitment, and perhaps money (if using a rental agency instead of doing it alone).
Tenants aren’t just retail customers or employees who come and go from the store or workplace, rather landlords have to deal with them on a long-term basis. While this can be a rewarding experience, unless a landlord has excellent discernment and an ability to be upfront with people, renting to tenants can be a nightmare as well.
Of course, the type of house and neighborhood will make a difference in the type of tenants attracted to the rental, yet landlords should remember it takes time to get to know who people really are. For instance, tenants can look and sound great in person and on their applications, yet when an issue occurs (theft, flooded sink, neighbor’s dog barking, etc.) or their expectations aren’t met to their standards, their true colors will come through.
The management aspects of being a landlord involve dealing with tenants, yet also so much more. Essentially, being a landlord (even of one house) is like being a business owner; some business aspects can be outsourced to a property management company, yet this is another monthly expense to calculate.
While some landlords may be fortunate enough to have great long-term tenants, most landlords deal with many tenants over the years. Considering the average credit score for renters is 650 and in 66% of housing markets, buying is more affordable than renting (stats from mysmartmove.com), great long-term tenants are not easy to come by.
Paying all the repair and maintenance expenses and spending the time to coordinate, hire, or DIY, are big downsides to being a landlord, especially with an older house. Even if most of the expenses can be deducted at tax time, they’ll require landlords to constantly spend money upfront.
Another downside to renting a home is most tenants won’t treat the home as if it was their own; in other words, they may neglect and treat the home harshly, which may lead to more repairs and expenses that wouldn’t normally occur. And if any late payment fees, evictions, or other issues occur, tenants may thrash and damage the home out of anger and malice – creating more repairs and expenses.
4. Dealing with Vacant Rentals
The rental market may be good now, but even this doesn’t mean landlords won’t suffer from vacancy between tenants. Finding the right tenants takes time, as does the repairs and maintenance done between tenants, and taking the first applicant out of desperation or expediency is a gamble not worth taking.
Hey, “life happens” is the old adage that applies here; applicants may have intentions of staying long-term, yet with job, marriage, and other life changes occurring, they very well may have to move much earlier than expected.
Landlords must deal with these unexpected situations and go through the application process as many times as necessary; in the meantime, rent isn’t coming in and expenses are going out. With enough of these unexpected departures in a short period of time, landlords may have a hard time just breaking even for the year.
What’s the Alternative?
Examining the downside of being a landlord may have some homeowners looking for an alternative to being one. And if being a landlord was an alternative to dealing with the traditional way of selling a home, they may be discouraged all-together!
Don’t worry, there’s good news; the alternative to both is to use Seller’s Advantage to sell the house quickly and without the hassles. Seller’s Advantage has purchased thousands of houses, has an A+ rating with the Better Business Bureau, and has many positive reviews online from past customers.
For homeowners wanting to sell quickly and for the best cash price possible, Seller’s Advantage is the best alternative around. If interested, contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote. We purchase homes in AS-IS condition and can give homeowners a cash offer in as little as 24 hours.
You own a property. You can sell it or rent it. You are not going to live in it yourself so, apart from leaving it empty, you only have those two choices.
It is a big decision. Many people make what they see as an easy decision based on how they came to be the owner. They may have inherited it, so it may have some emotional ties for them and their family. They may simply have had a job transfer and moved out of town. They may have received it as part of a divorce settlement. Each situation brings different factors into the decision. And each situation also brings its own hassles, pressures, and emotions regardless of property ownership.
It feels like an easy decision, “to rent it out until we are sure.” It is also easy to look ahead a little and see possible interest rate increases coming down the pike. When mortgage rates go up, fewer people can afford to buy, so they are more likely to rent, so renting the property looks like a good idea. If mortgage rates go up, home prices go down, so renting it makes sense until the market picks up. They are easy decisions and they are decisions that owners often regret. It is as true of being a landlord as it is of many things – the devil is in the details.
Rent it Yourself or Use an Agent Again, you have two choices. Many owners take the “do-it-yourself” route because they have heard the horror stories about agents who “did not do their job properly.” Real estate is a complex line of business. It is erratic in terms of demand from would-be buyers or tenants. It is filled with buyer and tenant emotion because it is potentially their new home they are looking at. And it is a business filled with part-time agents who, no matter how well-intentioned they are, can only be available to find a tenant, interview them, handle the background checks and the walk-throughs, and everything which property management involves in the evenings and weekends.
So, many people decide to become their own part-time property manager. You do not need a real estate license to rent out your own property, and “if we find the right tenant, all will be OK” as many owner-landlords say to themselves.
Learning on the Job Advertisements go into the press, websites sell well-designed rental property pages, neighborhood websites get read by folk looking for somewhere to live, so it is not too long for potential tenants to raise their hand. The new landlord knows there is a process to follow, so reads up on the subject. It is important to meet the prospective tenants, show them the property, discuss it with them, do a background check, download a rental agreement, and all should be well.
Advertising the Property for Rent Advertising the property is the first potential pitfall. The Federal government and State governments have laws that say what can go into an advertisement or, more precisely, what cannot. Not knowing the law is no excuse. The Federal Fair Housing Act makes things very clear about what a landlord can and cannot do, but is less clear on how to do it.
Meeting Mistakes Meeting with tenant applicants is the next potential pitfall. Let us say the landlord meets the first tenant applicant at the property and begins the tour. As part of the “getting to know you” conversation the landlord asks if they have children. They do, and the landlord says the neighborhood is great for kids. They view the property, and say the would like to take it further.
The next tenant applicant arrives. It’s late, the landlord feels thirsty from all the talking, so offers to make this visitor a coffee. The first visitor did not get offered a drink. The conversation begins, and the landlord follows on from the previous conversation and says that the neighborhood is great for kids. This tenant does not have children.
The landlord has now possibly contravened the Federal Fair Housing Act twice. Really? Yes! Telling the second tenant that the area is great for kids could be interpreted as “discrimination based on familial status.” The first person was not offered a drink, but the second one was. Was it just because the landlord was thirsty, or did it have something to do with the fact that the first visitor was from a foreign country and had just moved into town?
But it was just conversation! To the everyday person, yes it was just conversation, but the Federal Fair Housing Act says it may be discrimination. Now here is the problem, the property cannot be rented out to both applicants, and if the unlucky applicant felt disappointed, then they may hire a lawyer to pursue their case for compensation.
Background Checks It is essential for landlord peace of mind to carry out background checks on tenant applicants. Landlords have a right to choose a tenant they believe will pay their rent on time, look after the property, and not behave in ways that may anger other residents. To learn enough about applicants, they carry out background checks.
The checks include such things as: • Credit score. • History of paying debts on time, not having any liens against them, not having any forced account closures, etc. • References from previous landlords, current employer, etc. • Any criminal history (both state and federal.) • Any history of drug or alcohol dependency.
Landlords must seek permission for such checks, must complete the requests correctly, and must handle the responses correctly. In some states, for example, it is forbidden to seek the source of income. Knowing who can be told about the results of criminal or other history is also essential. By not following the rules, the landlord is liable for a claim. It is illegal to discriminate against someone with a previous drug addiction, for example, if that applicant has completed or is actively involved in a rehabilitation program. Worrying that the applicant may fall back into old ways and wanting to charge a higher rent to cover any potential damage is against the law. Not renting the property to that person but renting it to someone else is a landlord’s right, but all of the correct steps must be taken to avoid a potential claim for discrimination.
The Takeaway Being a first-time landlord may seem like an easy decision and an obvious route to follow. But the route has pitfalls. There are successful landlords who never took a misstep, and others who learned from their mistakes. The details set by federal and local laws can be cumbersome, and finding the right property manager can be difficult. The best decision, therefore, may be to sell quickly, simply, and for a fair price. Click here to contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.
When it comes to hoarding the first thought is someone with a messy home. A person who can’t or won’t clean up. But, it’s more complicated than what meets the eye. Cleaning the house will not automatically solve the problem. Hoarding is a mental illness and must be treated with compassion. However, swift treatment is key due to the hazards that come with hoarding and selling the home of a hoarder.
Common symptoms of hoarding:
Hoarding is a mental illness. But, if you can spot the signs early you can encourage the person to see a doctor before things progress.
1. Excessively purchasing unnecessary items.
This person may buy items they don’t need nor, can they store. They may believe this item will have a use in the future and is unique. That is their justification for the purchase.
2. Emotional attachment to their belongings:
This goes beyond one or two items which have sentimental value. It also does not include things they use daily or would have a legitimate use for in the future. They are emotionally attached to a vase they never use. Or, a broken appliance that is beyond repair. For the hoarder, these items may remind them of better days or of a loved one they have lost.
3. Saving unnecessary things:
Hoarders will become attached to empty detergent bottles or empty boxes. Things non-hoarders would throw away when they are consumed. A hoarder will justify this because they don’t want to waste anything.
The clutter that accumulates due to a hoarder’s behavior renders rooms unusable. This problem extends beyond an inconvenience or messiness. This kind of clutter creates a fire and trip threat for the hoarder. If the mess is blocking windows and entrances, it becomes a fire hazard. Yet, the clutter makes the hoarder feel safe and secure. Despite the safety problems is causes.
Who is at risk?
There are some risk factors common among hoarders. Those who are indecisive are more susceptible to hoarding. If the person has a family history of hoarding they are a high risk of becoming hoarders themselves. Unhealthy coping skills can result in hoarding too. If the person has had a divorce, eviction, or job loss recently they may revert to hoarding.
There are numerous health and safety risks associated with hoarding. Anyone assisting a hoarder needs to understand these risks and prepare accordingly.
Excessive clutter makes proper cleaning difficult. This also becomes a breeding ground for germs. Living in this environment compromises the hoarder’s health and immune system. Rotting food that is left indoors becomes food for germs which can make the occupants sick. If the person hoards animals, it creates more problems. Decomposing carcasses make go unnoticed and attract bugs and rodents. The germs that cling to animal’s waste can make everyone in the home ill.
The litter, rotting food, and waste create the perfect environment for pest and mold infestations. Bedbugs are attracted to clutter as they can hide in small crevasses. Rats and flies will flock to the rotting food. Since there is so much clutter they can hide from the person living in the home. These pests are far from harmless. Many are carriers of parasites. Their waste in your home puts you at risk for E. Coli and salmonella.
3. Respiratory issues:
Junk can fall into vents obstructing air from properly circulating. The rotten food becomes a magnet for mold, mildew, and fungus. The mold causes several respiratory and health issues.
4. Fire Hazard:
Hoarding is a fire hazard in many ways. First, is the flammable clutter in the home. If some of it were to hit the stove or heater the house would quickly be in flames. The rodents can chew through wires putting the home at risk for an electrical fire. Unsafe appliances make heating the home dangerous. In the event of a fire, the fire department would have a difficult time finding the occupants. The sheer amount of clutter is an obstruction for them. Often, entryways are blocked by boxes and other items making rescue difficult.
5. Structural integrity:
The weight of the unnecessary items compromises the structural integrity of the dwelling. The load-bearing structures become stressed making the home dangerous. The clutter itself may collapse and cause additional damage.
How to prepare a hoarder’s home for sale:
It is possible to prepare to sell a home after a hoarder has lived there. However, you will need to call a few professionals for help.
1. Professional hoarding clean-up:
This goes beyond a regular clean-up job. It will require a team of cleaners and take several days. The team begins by completely clearing out the room. Then, they will sift through the clutter and separate what to keep and what to throw away. Another option is hiring a junk removal service. They clear out the home completely and dispose of everything.
2. Professional exterminators:
You must hire a professional exterminator when selling a hoarder’s home. Pest control will asses the damage and come up with a plan to fix problems like rodents or bedbugs.
3. Trusted contractor:
You want to hire a trusted contractor to fix any structural damage to the home before sale. This is especially important for load-bearing walls.
4. Mold remediation:
The mold growth in the home of a hoarder is hazardous to the health of everyone. You need a mold remediation expert to help. They start by assessing the extent of the damage. From there they come up with a plan that includes isolating contaminated areas, removing all mold infested items, and extensively cleaning and killing the mold. After this is complete, they will make sure the mold issue is resolved.
Hoarding is a serious illness that affects the hoarders mental and physical well-being. The clutter and safety hazards are symptoms of a deeper mental illness. Cleaning the home does not resolve the problem. What you see as junk they see as treasure. Even after cleaning it up the hoarder will go back to their old ways without effective therapy. The hoarder needs the help of a mental health expert while the physical needs of the home are being tended to.
Yet, it is not impossible to sell a home that a hoarder lived in. Once you understand the time and money involved in the repairs you can get to work. Every hoarding situation is different. Many homes can be restored and sold after a hoarding occupant.
Contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.