List it with the real estate agent. Check with more than one agent and see what they feel the market price is. That price is not the same as the value considered for taxes- it could be higher or lower. If the house is indeed as much as it was appraised for, or close to it, you may be ahead spending a few more months marketing it. Agree those neighbor kids may look at it as a quick return on their investment- your kids need your charity more than they do.
Our old house was sold far below what we wanted to get- but it was an offer. If you have a much greater appraised value even with new problems needing attention it is likely you can get so much more it is worth the time on the market and the realtor fees. You owe it to your kids, not the neighbors, to sell it for as much as you can get in a reasonable time period. Remember there are costs involved in selling on your own- be sure you won’t get in trouble legally if the new owners discover problems and decide you didn’t do things properly in the sale. It’s a huge chunk of change to give away.
The only other question is whether you and any other co-owners are up for handling the repairs needed. Do you have the cash to put in and then wait for the sale? Are you and the other co-owners in agreement? If you have all the owners in agreement to be patient, then finding the right realtor and getting the mold taken care of should be your next step.
Every single instance I’ve known of of a seller tacking back financing has ended disastrously, with the seller unable to extract payment from the buyer OR easily get them out and repossess the property.
People who can actually afford the property do not look to the sellers to finance them. People who either can’t afford it or are shady business dealers do. They figure that it will be easier to cheat the seller than a bank.
(I am not talking about loans between parents and children. That’s a different matter.)
At what point would a below market price become a gift from you to these “friends” ? The very last thing you would want to do is be responsible for a gift tax on a $100k gift. I have no idea if this is an actual risk - the IRS works in strange ways… just something you should be sure of first. Avoiding brokerage fees is great if you have a capable buyer and a pretty good idea of the market value and transaction price is close to that market value. In your case I think you are much better off listing with an agent and learning from the market what that market value is.
The first house we bought was an owner finance, land contract with a 5 year balloon payment. The owners were two families. We were a young married couple, I was attending the University.
We took over the home, restored it and before our 5 years were up we had children and had to move for an extra bedroom. The owners were happy, we were happy, the house was happy.
When we were transferred, 3 months later after moving to a larger still starter size home, we financed part of the down payment for the couple, we let take over our house note, with a five year balloon too.
There are tax advantages to holding the lease to purchase/land contract and financing too.
How familiar are you with the area? A developer may want to buy it, tear down the house, split the lot and build. There may be more value than you know.
Bottom line, deal with a pro. You’ll hear stories and speculation, see some TV show about a big profit, but you’re just in this to make a reasonable disposal.
We don’t even know where this is, whether it’s a hot market or what.
Thanks everyone. The estate has enough money to fix the mold. Nobody wants to spend the time or money to fix it up before trying to sell it. Given the location, it’s hard to guess whether it will be a tear down or a fixer upper. A young couple with kids may move there for the school system and fix it up as they go. A more established person may want to tear it down and build far from the road. There are houses very close by going for over $700K, but of course they are new and larger.
The other owner will likely rely on my lead, and has been very easy to work with. (He needs the money much less than I do.)
Current plan is to see if the neighbor kids want to come close to $250, somehow.
But I plan to fix the mold, advertise for a few weeks on some bulletin boards, and when the other owner/ estate administrator gets back in the country we will work with a realtor. No more waiting for the kids.
Have you considered giving the people who are interested a second mortgage? They could get one from the bank for the original $200K and the second from you for $75K.
If the house is appraised at $335K, I don’t really understand why you’d sell it to them for $250K. Maybe $325K – but not $85K lower than the appraisal.
I’m assuming the appraisal is the true market value. If it’s not, that’s a different story.
Interesting that a Realtor and a repair guy said the house will likely be torn down by new buyers. What do similar vacant one acre homesites sell for in that neighborhood?
Reason we were trying to sell it for that price is it Should have been relatively quick, that was what they thought would be the top of their price range! it wouldn’t involve realtor fees, and the parents were very nice to the man who lived there. Because it is close to the road, and needs a LOT of work, it may be difficult to sell. Now it may be even more difficult to sell, because if you’ve seen my other recent thread, we have a mold issue in the house.
It sounds like the appraisal is not correct then? Did the realtor know it has these issues. If it’s not in the best location, ie not many potential buyers then I think you are correct in cutting it reducing the price.
I would treat this like any other business transaction. I really don’t understand why you are going out of your way to leave money on the table relative to the sale of this house. Unless the neighbor’s children are somehow related to you?
The mold issue might just be a “surface” one and not the kind that has gotten behind the walls. That is a lot different and requires much less remediation. I would get that attended to and then simply put it on the market with a reputable broker and take the highest offer.
Broker’s fees are very often negotiable, especially if the listing price is one that would encourage a very quick sale. The broker’s time commitment and effort expended to sell a property has a direct relationship to the amount of time the property sits on the market.
The appraisal was done for estate purposes, by a certified appraiser. A realtor I had come take a look said it would be harder than usual to figure out a good market price. I am assuming the appraiser took the condition of it into account when he gave his price.
An appraiser should be taking condition into account and comps for other homes in the area with similar specs. If some neighboring homes don’t match or are newer and/or much more expensive, they will usually expand their look. Even if we guess it won’t go for 335, that you’d price it lower, I guess some of us wonder if, as in your OP, under 250 just is too little.
I can see a quick unload to a nice neighbor, sure. But they seem to want to drive it awfully low.
1214mom, in an area between DC and Baltimore with great schools, the LOT alone may be worth $250-300k. Our 1/2 acre lot an hour’s commute fron DC is more than the house it sits on. Bethesda teardowns are selling for 650-700 and being rebuilt at 1.5-2M.
No way would I offer to finance for folks who are having trouble qualifying for a low ball purchase price, even if I did want to get rid of the property expeditiously. Let a realtor do the work of selling it. Don’t throw away good $$ that can benefit your family. JMO.
Agree that I can see no good reason for continuing to drop your price and offer better and better terms for these neighbors. Sounds like you need to be in the hands of a competent realtor who is familiar with the area and can be sure it is properly priced and gets sold to a qualified buyer. You were very generous to offer to give them such an attractive offer–enough already!