We need to relocate out of state in a month and a half or less for a new job. Our house is in an excellent neighborhood where the home values have greatly increased in the last several years, but the house needs about 100,000 in repairs for us to get top price for it. So, we are considering selling it for cash.
I have several questions about the process:
Is it ethical and/or practical to get quotes from several cash sale companies?
Can you list the house as for sale by owner while considering the cash sale offers?
If you are not happy with the final offer after inspection can you back out of the deal without repercussions?
Thank you very much for your help.
Also any general information or experience would help too.
Absolutely yes! You would be doing yourself a disservice if you did not consider competing bids.
Again, yes! If you have not signed an exclusive contract with a broker, you should explore ALL options.
If you have not signed a legally binding contract, you can walk away from any offer at any time. Once you sign a legal contract, you can still walk away but you may lose your deposit (fully executed contracts usually include a deposits)…and if the buyer has a good lawyer, you could be forced to comply with the contract.
Beware, whatever you think your home is worth, “cash sale” buyers will bid much much lower. Keep the “$100,000 worth of repairs” info to yourself. Let them come up with a repair number and if it is higher than $100,000 which it likely will be, then you state your case.
Good luck!
How hot is the real estate market in your area for fixer uppers? Are the “repairs” mostly cosmetic (outdated decor) or is there a giant structural issue?
Completely agree with the above. Also, do not tell the prospective cash buyers that you are looking at a deadline. They will use that to put pressure on you to accept a lowball offer.
I would also talk to a few local realtors to see what they say the house is worth as is… you will have to pay a commission if you go with a realtor, but there are some upsides… your final take could be still higher than what you get from We Buy Ugly Houses, plus the realtors could keep an eye on the property while you are relocating.
I don’t have any information on cash sales other than the seller does not always realize the full value of the home.
Sometimes, a realtor will partner with a potential seller to make the necessary repairs / upgrades in order to make the home sale ready, with the expectation of being reimbursed from the proceeds of the sale and also a larger commission. That might be something worth considering.
We had a similar situation five years ago when we sold our home in an upscale tear down community. House needed way too much work to get in shape for inspections (verified by a realtor). I had been in touch with several developers so contacted them and more when we were ready to sell. One of them said he’d give me $5000 over my next best offer. He did and we got a six month rent free post possession contract. So yes, get as many quotes as you practicably can.
I would recommend driving around your area to find houses under development and contact those builders. A lot of them in our area bought and built on spec because it was so desirable of a location. Our house wasn’t that great but the location was ideal!
I believe you can continue to advertise while considering other offers, but not if you’ve signed something that says otherwise. Whether or not you can back out after inspection depends on the contract. Many of these situations involve “no inspection” contracts. Usually you negotiate if there are unexpected surprises. You can also negotiate if the appraisal is significantly different than the offer. My developers were interested in the land, not the house, although a couple were possibly interested in renting the house out while they waited for permits etc.
Also, find a ‘recommended’ real estate lawyer to represent you. Talk to friends and neighbors to get a recommendation. Strong legal representation is invaluable.
Thank you for the advice, I’ll definitely hire a real estate lawyer, get several bids from different cash buyers and call some developers and see if any of them are interested in buying the house.
I am one of those “cash” buyers. Research if there is a way you can get your home listed on the MLS in your local area, even if selling by owner. You will get a lot more offers if you can somehow get listed into the MLS where all the agents can see it.
The suggestions above for contacting local builders will get the fastest sale. Here are some tips on how to word your sale and terms and conditions:
AS IS, Seller will make no repairs
Buyers to conduct any and all inspections prior to submitting any written offers. Cash buyers will try to lock you into contract and spend the full inspection contingency period trying to make a scary list of issues to renegotiate a lower price. They are also using this same time period to ‘wholesale’ the contract to another buyer and they will use the ‘inspections’ to bring in their buyers. There is a large possibility they will back out after this time period. So, most important thing to sell fast is to avoid any contingencies from the buyer.
No appraisal contingency
No termite repairs or termite clearance provided by Seller