Case study: sell your own house
Who would think that to sell your own house, that could be done without a real estate agent? There are resources to aide in this transaction: calling Reel Property Solutions (507-218-8788), doing a For Sale By Owner with a title agency or real estate law firm conducting the transaction, perhaps a family member or friend purchases through a private sale. Whatever the case if choosing to sell your own house, ensure the price reflects the value.
This is a case study of how Homeowner T wanted to sell, but did not have the proper price to reflect the value in mind.
Reel Property Solutions, LLC sent direct mailers to properties with a bad roof. A particular property reflected this criteria, due diligence was done, several rounds of mail were sent, and Homeowner T called with interest to sell. When asked, “Why do you want to sell your own house?”, Homeowner T explained this was a passive income property, there were some minor repairs needed, and little time to devote.
To sell your own house have a Comparative Market Analysis (CMA) completed. This article https://www.homelight.com/blog/comparative-market-analysis/ gives a thorough insight as to what is involved in a CMA, why a high price or low price can be detrimental, what will happen if a bidding war results in a price that is above the appraised value, and so much more.
**This how Homeowner T was inadequately prepared: Homeowner T had a sale price in mind and would not budge: The after repair value should be $230,000, but without a real estate agent’s commissions, subtract $10,000 then with $10,000 in repairs, subtract for a total sale price of $210,000. When asked how the after repair value was assessed, Homeowner T talked with a real estate agent via email, agent never came to the property, and the two individuals never met in person. Therefore, a rock-solid CMA was not completed. Most of all, these are invalid points.
To sell your own house, list with an agent, or anytime transferring paperwork, any and all repairs, lead paint, well/sewer/septic issues, any basement flooding problems, condition of the roof- basically anything about the structure is required to be disclosed.
**This how Homeowner T was inadequately prepared: Not disclosing major issues or making issues sound minor when in fact, the issues most likely had underlying problems. For example, the roof was bad and gutter work need to be reattached. When Reel Property Solutions, LLC viewed the property, yes roof, gutters, and fascia needed attention, but in addition, the need for this work was most likely due to rotten areas. Homeowner T had estimated about $8,000 in repairs. However, that did not include the new materials needed to replace the rotted parts. Plus, once the rotted areas were pulled away, what other affected areas that would need attention was not factored. The cost of these repairs quickly escalated because of another problem: since the gutters were not attached properly, water was running off and seeping into the basement causing mold growth. When this was brought to attention, Homeowner T stated gutters would be reattached and then the mold would clear itself. Side note: mold continues to spread and NEVER just clears itself.
There was another part of the structure that was a concern: a cracked foundation wall. The crack was minor, yet was apparent. When asked about this matter, Homeowner T said the crack was noticed by an inspector 15 years ago and not to worry about it. Side note: Foundation cracks will increase over time because of the ground shifting, pressure from holding up the structure, and pressure from frost pushing against, etc. This crack could use a fiberglass support as a brace, which is about $6,000. That is a very minor foundation repair in relation to the cost of repairs if the wall caves inward.
With other repair costs, the $10,000 that Homeowner T originally had in mind had now calculated to about $20,000 which could be more depending on the unknown factors of the roof, gutters, and fascia.
To sell your own house, keep in mind the neighborhood standard. A subdivision with “cookie cutter homes” (or houses with the same floor plans) are easy to get comps. An area with customized houses are going to be more difficult. When determining a fair price, there is a stringent criteria such as located within 0.5 miles away, sold within the past 6 months, assessing the list price vs the sale price (sold for far above list price could have been a hot market that may have cooled off by now, therefore, that comparable may not be valid), ensure properties are in the same town and not across the street in a different suburb, plus ensure the finished square footage is close along with close to the same nmber of bedrooms and bathrooms.
**This how Homeowner T was inadequately prepared: counted unfinished square footage for the total square foot count along with no comparable properties to fit these criteria. Reel Property Solutions, LLC had to rely on help from a real estate agent to determine the value. The particular property was a duplex with passive income.
The real estate agent did an Investment Analysis. This determined property value, rental rates, repair costs, holding costs, what single family homes were being sold for per square foot, and future market trends. With these factors, the calculation was the AS-IS value was $180,000 then fixed up was $210,000. This was presented to Homeowner T who decided to gather more information from other agents.
Moral of this case study is if the desire is to sell your own house, have valid points, be prepared for Reel Property Solutions, LLC to do a deep look through of the property and be prepared to answer questions based on the due diligence. The education from Fortune Builders has been invaluable for guidance. In most property tours, there is a spread sheet to fill in and calculate repair cost on the spot. Since Homeowner T was so determined to sell for a set price and no comps available, the Investment Analysis was more appropriate for this property tour.
Also know that Reel Property Solutions, LLC will do a thorough walk through of any property to ask about the various distresses, find the great advantages of the property/neighborhood/other unique features, and always will present an offer that is a WIN-WIN for all involved.
If you are interested to sell your own home, contact info@reelpropertysolutionsllc.com or call 507-218-8788.
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