Distressed Property Solutions: Why Cash Buyers are the Answer
Real estate experts say the real estate industry is one of the best investments available. This is because no matter what happens, people will always be looking for a place to live. They think the luxury market will get hit hard, but for first time and second time home buyers and the downsizing market, it’ll be a solid market. Another thing that will get hit hard is commercial real estate or some of the more popular urban apartment buildings with apartments on top and commercial storefronts on the bottom. (1)
In any market, you may find distressed homes for sale from homeowners who want to downsize or move. If you are one of these homeowners, this article will discuss how to sell your home to cash buyers and how to proceed.
What is a Distressed Property?
A distressed property is a property in which the owner cannot satisfy financial responsibilities (such as a mortgage or property tax). As a result, the property is about to be repossessed or foreclosed. According to the definition, ‘distressed’ in this context means that the property owner is in financial difficulties and must sell the property quickly to avoid the bank taking control. A property may also be distressed if it has fallen into disrepair due to vandalism or the owner’s neglect.
Furthermore, a distressed property could be a construction project that has been delayed due to a lack of funds on the part of the owner. In this scenario, distressed indicates that the property is in poor condition, and the buyer wishes to sell it as-is, which can be difficult. Since you know what a distressed property is, let’s talk about how to sell such a property without any issues.
How to Sell Distressed Properties
Determine the Property’s Value
Selling a distressed property is the same as selling a regular home. The only difference is that you must find a motivated buyer eager to close quickly. Like in traditional home selling procedures, you must know the worth of the property you wish to sell. This protects you from being taken advantage of.
Here are several methods for determining the worth of your property.
- Conduct a comparative analysis: Comparative analysis involves contrasting your property to similar properties in your area to establish its market value. Although this method of estimating a property’s estimated worth is popular among real estate agents, you can also use it. All you have to do is compare your property to others in your region with similar attributes (such as the number of bathrooms, bedrooms, size, style, and so on).
- Use an Internet valuation tool: An online valuation tool, also known as an Automated Valuation Model (AVM), uses publicly available documents (such as tax assessments, property transfers, and deeds of ownership) in conjunction with an algorithm to produce an estimated worth of a property. This AI tool calculates the value of your home based on current sales and listing prices in the neighborhood. You can use online appraisal tools available on lender’s websites or listing sites.
Do You Intend to Complete Repairs or Sell As-Is?
To determine if to complete repairs or sell your house as-is, there are factors you must consider. First, you must ask yourself how fast you need to sell your home. If you are selling because you cannot meet your financial obligations and foreclosure is imminent, you can choose to sell as-is. However, if you have no financial problems and no imminent foreclosure, you can choose to repair the property and sell it at a reasonable market value.
Property inspection is another approach to assess whether you want to sell the property as-is or repair it. A home inspection will reveal any issues that go beyond the obvious. It can assist you in determining problems with the roof, flooring, foundation, or other structural flaws.
Sell to a Cash Buyer
Another thing to consider when buying a distressed house is that mortgage buyers aren’t always the greatest option. If you want to prevent foreclosure or get rid of a run-down house, you should always sell to a cash home buyer Philadelphia. Why? A cash buyer has the financial ability to buy the house without applying for a mortgage, so you won’t have to go through the lengthy process that mortgage lenders require. Furthermore, the time required to finalize the deal is shorter than usual.
If you’re wondering how to find a cash buyer, you can talk to investor-friendly agents. These agents have access to MLS and are usually close to property investors willing and able to purchase your property in cash. You can also find reliable cash buyers through online public records. You will just visit the clerk’s office and check the recent changes in the property title without a mortgage lien.
You can then call the buyers to see if they will purchase your property.
Check the Buyer’s Financial Capability
One thing to keep in mind is that because you are not selling to a mortgage buyer, you must confirm the prospective buyer’s financial capabilities. Verifying the buyer’s finances will save you time and money and keep you from dealing with a dishonest person. So, if you need to verify the buyer, verify the buyer’s fund by asking for a recent bank statement and verifying the name written on the bank statement is the same name on the contract. You can also visit the county’s deed record website to see if the buyer’s name is on multiple deeds.
Disclose All Issues with the Property
When selling a distressed property, regardless of who you’re dealing with or the state of your home, you should always disclose any issues to the buyer. Allowing the prospective buyer to know what’s going on with the property ahead of time will save you the worry of future lawsuits. Also, learning about the problem later, before closing, can lead to negotiating, finally leading to the buyer dropping out of the sale.
Stay Professional
Whether you’re working with an agency, a
we buy houses Philadelphia company, or a friend who is an investor, you should conduct the transaction professionally. Documenting every step of the home-buying process is beneficial and can save you time and money. As a result, note down everything relevant to the transaction. The documentation must also be complete, and the process must be licit.
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About the author
Mathew Pezon
Mathew Pezon is the founder and CEO of Pezon Properties, a cash home buying company located in Lehigh Valley, Pennsylvania. With several years of experience in the real estate industry, Mathew has become a specialist in helping homeowners sell their properties quickly and efficiently. He takes pride in providing a hassle-free, transparent, and fair home buying experience to his clients. Mathew is also an active member of his local community and is passionate about giving back. Through his company, he has contributed to various charities and causes.
