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Is Selling a Home an Overwhelming Process for Homeowners?

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

 

Essentially, the question is asking whether or not selling a home with traditional methods is too much of a hassle for homeowners. Ultimately, the answer depends on each homeowner’s real estate and mortgage experience, workload, location, situation, and general perspective of the process.

Whatever the case may be, selling a home is always more involved than selling a car or other high-priced items. Simply put, the large amounts of money being borrowed create more red tape with laws and regulations concerning the mortgage and real estate industries. This might make the process of selling a home more complicated and involved than a seller wants to deal with.

Here are some other factors that can make selling a home a hassle for homeowners:

 

    • they’ve never sold or bought a home before
    • their home selling/buying experience was a long time ago
    • their home selling/buying experience was in another state
    • their work is demanding and time-consuming
    • the home is in a distant location
    • the home needs extensive repairs and/or cleaning
    • the home is in a buyer’s market
    • they don’t have the upfront money to repair and market
    • home is being used as a rental
    • commission and fees can cost around 10% of the sale price

 

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.”

 

While three weeks isn’t very long, this only accounts for the time from when a house is actually listed until it’s closed. Homeowners must also consider how long it takes to get a home ready to be listed. The amount of time this takes depends on:

 

    • repairs and upgrades
    • clean-up for curb appeal
    • home inspections
    • hiring a real-estate agent
    • marketing preparations
    • moving or putting items in storage
    • preparing to stage a home for walkthroughs and open houses
    • dealing with any tenants

 

Having an inspection done pre-listing isn’t required, yet is a good idea, especially, if the house is run-down or obviously in need of repairs. Having a pre-listing inspection done will cost a few hundred dollars, yet will prevent any bad surprises from surfacing when buyers have an inspection done before closing.

The time it takes to prepare a home for listing and sell it will depend on these factors, yet is also subject to problems that can occur during escrow and closing processes.

An article on The Balance gives us some examples:

 

No earnest money deposit.

…A bad home inspection.

…A low appraisal.

…Underwriting rejects the file.

 

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.

A second article on The Balance called: “Important Steps in the Home Selling Process”, written on July 22, 2018 by Elizabeth Weintraub, lists the number of steps involved:

 

      1. Choosing a Listing Agent
      2. Find Out How Much Your Home Is Worth
      3. Get Your Home Ready for Sale
      4. Market Your Home
      5. Show Your Home
      6. Receive Purchase Offers and Negotiate
      7. Open Escrow and Order Title
      8. Schedule an Appraiser Appointment
      9. Cooperate With the Home Inspection
      10. Obtain Seller-Required Inspections [if contract requires]
      11. Delivery Seller Disclosures [lead-based paint, etc.]
      12. Negotiate Requests for Repair
      13. Ask the Buyer to Release Contingencies
      14. Sing the Title and Escrow Documents
      15. Close Escrow

 

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.

 

Conclusion

 

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.

Problems that Can Kill Your Home Sale

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.

Water problems.

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.

Structural issues.

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.

Bad smells.

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.

Landlord Drama: Why You Shouldn’t Rent your Home and Just Sell It

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.

Being a landlord can be a lot of work.

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!

4 Expensive Home Repairs Every Homeowner Must Face

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.

Preventative maintenance:

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.

2. HVAC:

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.

So You Want to Fix and Flip a Property: 3 Things You Should Know

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.

While the fix and flip strategy can be profitable, the reality of the challenges and risks involved need to be carefully considered. Basically, the practice is harder than it looks on television and riskier than homeowners and investors may think. In an effort to help, let’s discuss 3 reasons to reconsider the fix and flip strategy.

 

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.

An article found on The Washington Post called: “Why you won’t get rich flipping homes”, written by Justin Pierce, explains how the fix and flip strategy is “Knowledge-intensive”:

 

“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.

There are many hindering factors that can derail ideal fix and flip scenarios, such as:

 

    • legal issues
    • contractor issues
    • real estate market demand
    • inaccurate valuations
    • unexpected repairs
    • code issues

 

There are many nightmare fix and flip stories that validate this point; one such story is told by an experienced real estate investor and house flipper Mark Ferguson on his website Invest Four More in an article called: “My Five Worst House Flipping Experiences”:

 

“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.

 

Conclusion

 

While the fix and flip strategy can be profitable, owners and investors should carefully consider the challenges and risks involved. At the very least, they should expect it to be more difficult than popular reality television shows make it seem. In reality, the fix and flip strategy involves a steep learning curve, the ability to stay committed through delays and hindrances, and the willingness to risk a large investment for an unknown return.

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.

So You Want to Be a Landlord: Beware of These Four Issues First

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.

Basically, being a landlord involves dealing with tenants on a long-term basis, which means getting to know exactly who they are deep down inside. This isn’t always easy to discern and can become a real nightmare for landlords when unexpected circumstances reveal contentious personalities.

2. Management Aspects of Being a Landlord

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.

Potential landlords should ask themselves:

    • Do I want to master the IRS Schedule E for landlords?
    • Do I want to incur the responsibility for resolving evictions, late fees, damages by tenants, and other potential liabilities?
    • Do I want to accomplish the extra bookkeeping or pay someone else to manage it – including a CPA at tax time?

 

While there may be profit at the end of all the taxable and non-taxable expenses, potential landlords must consider the time and effort it takes to manage the manifold business aspects involved. They also must consider the potential liability involved when renting their houses to relatively unknown people.

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.

3. Time and Expenses of Repairs and Maintenance

Homeowners already understand how much maintenance and repair houses need every year. As a landlord, add to these duties the tasks of coordinating repairs with tenants and meeting their variable expectations. Then consider that the time spent doing repairs and maintenance isn’t tax deductible; the cost of the repairs is tax deductible, but if done by the landlord themselves, the labor isn’t.

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.

The point is, landlords have to deal with vacant rentals when tenants leave or are evicted. If the latter occurs, landlords may have to pay legal fees and wait out the legal process of evicting someone who won’t leave – one nightmare story details a man who lived free during the eviction process for 274 days!

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.

To Rent or To Sell Your Home: The Devil is in the Details

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.

What You Need to Know Before Selling a Hoarder’s Home

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.

4. Clutter:

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.

Hoarding risks:

There are numerous health and safety risks associated with hoarding. Anyone assisting a hoarder needs to understand these risks and prepare accordingly.

1. Sanitation:

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.

2. Infestations:

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.

 

 

 

Is Being a Landlord Worth It? Managing The Drama And Expense

At some point in your life, you’re probably going to have the opportunity to be a landlord–rent a house you own to a tenant. You could inherit a home, or keep an older house when you buy a new one–however you come by that empty house, it’s hard not to see dollar signs blinking over it. Before you put a “For Rent” sign in the front yard, you need to know your responsibilities as a landlord, and your prospective tenants’ rights.  Knowing this could impact your choice between being a landlord and selling your rental property and getting cash for something else – retirement, college financing for your children, or investment opportunities.

Responsibilities

The minutiae of landlord duties differ among states, but according laws in every state except Arkansas, there is an implied warranty of habitability. Here’s what that means in practice.

  • Basic structural elements (roof, walls, floors, stairs) are solid and intact
  • Mechanicals–heat, air conditioning, water, electrical, and plumbing have to be operating safely
  • Extermination of pests and rodents
  • Provide for trash removal and receptacles
  • Disclose any environmental hazards–mold, radon, asbestos and lead paint–and manage against any danger to the tenant
  • Provide safety against criminal intrusion

The remedies for some of these requirements are quite simple. The county or city will usually provide trash bins (it’s what you pay taxes for); leave asbestos alone, new paint over old lead based paint, and good ventilation and landscape plants take care of most radon concerns. Change the locks before a new tenant comes in and put locks on the windows and you’re providing safety.

If there is any mold in the house, you need to confirm it’s not a health hazard.

This is actually the easy part, since all you’re required to do is provide a safe and habitable house. It gets complicated when you look at other rental properties to figure out what they offer and what they charge in rent and fees–you’ve got to keep up with the market to attract a tenant.

Shopping List

These are some of the things that you will expected to provide in most markets across the US.

Kitchen Appliances–range or cooktop and oven, refrigerator and freezer, dishwasher, and disposal.

Washer and Dryer

Water Heater

Central Heat and Air Conditioning

Access to Internet and Cable

Repair Responsibilities

If you’ve owned a home before, you are all too aware of the costs to maintain it. If you’ve inherited a house and haven’t had to fix a leaky roof before, you’re in for a bit of a surprise.

When it’s your house, you can let stuff go for awhile of it’s not a major thing–until you hardly notice the missing cabinet door and hinges. When you’ve got other people paying to live in the house, you’re required to maintain the house just like it was when they moved in. The time frame is fluid–that broken hinge doesn’t have quite the urgency of a burst pipe–but you should have repairs done within a week.

Major mechanical issues go back to the implied warranty, so things like burst pipes, non-functioning furnaces or a broken banister have to be fixed immediately. Major issues are not necessarily expensive; the part to fix the furnace or the banister could be a $50 trip to the home improvement store.

Managing The Money

Every state is different in the way landlords are required to maintain security deposits, fees, and rents. One thing to remember is that a security deposit does not belong to you; you are holding for the tenant. In light of that, those monies should be deposited in an interest-bearing savings account against the day you have to return it.

Open a separate checking account for rent payments and other non-refundable fees (credit check, administration, application). While it’s not illegal in some states to use your personal accounts for business purposes, it’s just not a good idea and you’ll need detailed records and bank statements for the IRS.

When There’s Disagreement

Being a landlord is not for those who can’t handle conflict. If you’re a pushover or too hot tempered, find someone else to manage the property. There will be disagreements between you and your tenants, and you should be aware of your and their legal rights, as well as penalties, when disputes arise.

The lease should be clear and concise, and you should have an attorney either draw it up or review it for you before you present it to the tenant. Any state laws supersede a clause in the lease that conflicts with the law–if state law says you’re responsible for pest extermination and your lease says it’s the tenant’s job, you’ll lose that argument every time because you can’t dispute a statute and it will cost you a lot more than the Orkin guy to try.

Conflicts usually arise over repairs–the tenant wants a state of the art washer and dryer and you want to install something you found on Craigslist. Or their lamps and small appliances keep shorting out, and they want you to get an electrical inspection. Clearly one of these is a disagreement, and the other is a huge safety hazard.

The implied warranty is clear on the appliance–you must replace it with a similar item (like iPhones, when a model is discontinued you’re stuck with the newer and more expensive one). You can’t warrant a secondhand appliance works the same as the one that broke, but you also don’t have to spend a fortune. You also don’t want to have to replace the replacement in two months. If you’re in disagreement over a possible safety issue, deal with it and if the tenant is crying wolf, send them the bill or deduct it from the security deposit; refer to the lease terms for this resolution. The last thing you want is a burned out house because you didn’t address a problem.

Keep records of communication with the tenant–usually you have an email or text chain, and if they threaten you at all make a note. Most disputes can be resolved without an attorney.

Or, You Can Avoid All The Hassle And Sell The House

If you’ve got the fortitude to be a landlord, it’s a nice way to make a little extra money. If you’re going in that direction because you’ve got a white elephant of a house on your hands, let Seller’s Advantage take it off your hands. They’ll not only pay cash for the house as-is, but close within a couple of weeks. So instead of trying to turn Great-Uncle Fred’s ramshackle ranch into a cash cow, go ahead and get the milk–call Seller’s Advantage today.

 

5 Reasons to Sell Your Vacant House Before Halloween

Do you have an empty house you just want to get rid of? Believe or not, thousands of other homeowners across the country are in a similar situation. You may have an inherited house you don’t want, a house that needs to be sold after a divorce, or even just a home you’ve moved out of and want to get off your hands. No matter what your situation, one thing is for sure: You want to get that empty house sold before Halloween. While this holiday may mean fun costumes and spooky parties for most of the country, it also marks the absolute worst time of year to have an unlived-in house on your hands for a number of powerful reasons.

Halloween is a terrible time to be selling a house, and it only gets harder from here. Between the howling winds and rock-throwing hooligans, and empty house is more of a liability than an asset during the cold months. Especially around Big Spooky when teenagers everywhere are up to no good and just looking for a little damage to do that ‘won’t hurt anyone’. If you’ve been trying to sell a house you don’t want that is still on the market in late October, it’s time to do everything you possibly can to get it sold and into the hands of someone with the time and resources to take care of the property.

Today, Seller’s Advantage is here to outline the five leading reasons to get your house off the market before the big spooky holiday of costumes, candy, and mischievous property damage rolls around.

1) Winter is the Slowest Time for Home Sales

Whether or not you are afraid of hooligans, the most profound reason to sell your house right now instead of waiting for the “right buyer” to come along is that we are about to enter the dark season for the housing market. Winter isn’t just when the days get shorter and the nights get colder. It’s also the slowest possible time on the housing market. Very few homes sell after mid-autumn and the sale rate slows to a glacial pace once the snows start to fall.

Home sales don’t pick up again until spring thaws the ice and begins to inspire thoughts of homemaking, gardening, and the patter of little feet on new hard wood floors. If you don’t want to worry about that house sitting empty for another four to six months, the time to sell is right now before Halloween marks the official beginning of the Holiday season.

2) Autumn and Winter Storms Can Rack Up Repair Costs

The next real concern is that, starting with All Hallows Eve, the weather becomes a scary proposition for the exterior of your home. Winter storms are notorious, especially in regions like Philadelphia, Chicago, and of the astoundingly windy Midwest states. Freezing gale-force winds will rip the shingles right off your roof and warp siding with their howling speed. Winds can also break off dry and brittle tree branches, gouging roofs and sometimes even crashing down large branches to create real rooftop holes.

And even without the winds, autumn falling leaves followed by piling up snow can cause their own problems. Both piles of leaves and piles of snow can create damp mounts that slowly rot away at your roof. First the shingles, then the timbers underneath will suffuse with trapped water and develop water damage. The roof will get soft in those spots and need serious repairs when the spring rolls around allowing the snow to melt and blowing away the leaves.

3) Houses are Hard to Maintain Over the Winter

Another challenge is that houses are much more difficult to maintain in the winter. Particularly in regions where the outside temperature can drop below zero. Leaving a home empty with the utilities turned off is all well and good during warmer months, but there is a serious risk of home decay if you let the house get too cold inside. The materials that home interiors are made of are designed to remain between livable temperatures. Extreme cold can damage and warp the wood, walls, and cabinetry almost as badly as extreme heat and humidity.

Then there is the risk of burst pipes. If there is any water at all sitting in the home’s pipes, freezing temperatures risk the pipes swelling with expanding ice and bursting. This creates a truly monumental repair task that will eat into your budget while also adding water damage that will make it even more difficult to sell the home.

4) Few People Attend Open Houses in Cold or Rainy Weather

But even if nothing extreme goes wrong and you simply keep hosting open houses and marketing your house for sale, you will have little luck finding ready buyers. Not only does the housing market slow way down during the colder months, but even buyers who are interested will tend to move more slowly in the buying process. After all, few people want to drive out to a house to walk around the grounds or attend an open house event in cold and snowy weather.

This is, in part, because it’s simply less pleasant to travel and check out houses when it’s cold. But if your region experiences snow, buyers may also be hesitant to complete a deal until they’ve seen what the home looks like not covered in a fluffy white blanket. No matter how many cups of cocoa you put out, it will be difficult to get buyers to come out and see your home after Halloween passes.

5) Halloween Tricksters Target Empty Houses

And finally, the reason this is such a profoundly October-focused tip is that Halloween night itself is a very dangerous time for empty houses. Some teenagers and even older hooligans take “Trick or Treat” all too seriously. If there are no decorations, no candy for the kids, and no lights on inside some will decide that this is an affront to the holiday. Their desire to throw eggs, rocks, and rolls of toilet paper will become irresistible. Especially with the floating concept that no –people– will get hurt if they decide to lay waste to your unwanted house.

Empty homes are prime targets for Halloween mischief and if no one comes outside shouting, that mischief can quickly get out of hand. If you don’t want to find yourself scrubbing off eggs, gathering scraps of toilet paper, and repairing broken windows, it’s best to get that house sold before the 31st rolls around.

Halloween is a dangerous time for empty houses on the market and your prospects for selling only get worse past this point. Fortunately, Seller’s Advantage is here to help. We will buy your home no matter what shape it’s in, how long it’s been on the market, or how haunted the local kids might think the house is around this time of year. We aren’t afraid of ghosts, know how to handle hooligans, and will pay you a fair price for your house after a simple inspection and no-obligation cash offer. For more information about how to sell your unwanted house before the risks of Halloween and the dark winter market beyond, contact us today!

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