Costs while selling add up - Watch your bottom line

For most people, when it comes time to sell their home or property, there is a price point already bouncing around in their heads as to how much they want, need or think they can get for the house. Sometimes these prices are unrealistic, sometimes they are under value, but we all generally have some preconceived idea of what we intend to sell for.

It is said that a thing is worth exactly what a buyer is willing to pay for it. While this statement can be true, it is not 100% correct. Take for example this scenario:

Jane and Joe are homeowners. Jane was laid off from her office job a while back and has been unable to find a new job. Jane and Joe are unable to afford their mortgage payment for much longer because Jane’s unemployment compensation runs out next month.

They make the hard decision to sell their home and move into an apartment that they can afford with just Joe’s salary. They contact a real estate agent and decide to sell their home for $190,000, which is a good price for their average $200k home neighborhood. Their home is in okay condition but could use some sprucing up, but of course Jane and Joe can‘t afford to do any of that and the house is being sold “as is.”

It takes 6 months to sell their home (this is pretty good considering the market and the home’s less than perfect condition). During that time Jane and Joe got behind on their mortgage payments when Jane’s unemployment ran out and their credit is now damaged, which will make it difficult to find an apartment. They also ended up settling for less than their full asking price since they had to make some concessions to offset things that the buyers wanted like new carpet, new roof and new appliances.

Lets see just how much Jane and Joe’s home sale actually netted them:

Final Sale Price: $178,000
Minus 5 months mortgage payments -$7,100
Minus 6 months utilities -$1050
Minus 6 months home insurance -$420
Minus agent commission (6%) -$10,680
Minus seller and buyer closing costs -$5,340

Actual amount Jane and Joe received for the property: $153,410
(hopefully this is more than they owed on the mortgage!)

Notice this is nearly $40,000 less than they originally were trying to sell their home for. This also does not take into account any maintenance issues that may have come up during those months. Plus, Jane and Joe had to live with the mental stress of the selling process being stretched over many months and their damaged credit when they were finally unable to keep up with the mortgage payment. What they may not have known is that there is a real estate investor that buys properties in their area who may have offered them $150,000 for their house and closed within the first month, leaving them free to move to an apartment and get back on their feet without the stress of selling and creation of credit problems. If this investor had made the offer of $150,000 in the beginning while Jane and Joe were asking for $190,000, the couple probably would not have taken the $40,000 discounted offer seriously. In hindsight however, they would only have been loosing $3,410, a much more reasonable amount to consider in exchange for many months of peace of mind.

So was Jane and Joe’s house really worth the $178,000 price they finally got for it, or was it actually worth closer to $150,000? It all depends on how you look at it.

Costs incurred in the selling process are often disregarded when looking at the big picture, the selling price. Agent commissions are often factored in, but holding costs like mortgage payments and utilities as well as closing costs and buyer negotiations can all affect your bottom line. If you need to sell a house in a less than HOT sellers market, be sure you are considering all the extra costs that will be hiding in the eventual sale. Its possible you could get an offer for that bottom line much sooner by simply contacting a real estate investor now and skipping a long sales process.

To find our more about selling your home contact REstore Property Group

Why sell to a real estate investor?

These are tough times in the real estate world, its true. There is so much negative information about the housing market in the media that some would have us believe there's no hope out there. Similarly, you may have seen signs or even gotten mail from real estate investors saying "We Buy Houses!" or "Sell Your House FAST!" that make you wonder if these investors are the only way out of your selling predicament.

We know that selling your home or investment property at any time can be full of stressful and confusing choices, and it certainly isn't easy right now. So how do you really know when you should consider selling directly to a real estate investor? While there are many reasons, TIME is most often the determining factor. Consider these situations:

• 
  You are behind on the mortgage payments and entering pre-foreclosure, therefore do not have time to wait for a traditional sale.
• You have more than one property, perhaps moved before selling your first residence or perhaps own a rental property that is now vacant, and are paying two mortgage payments which you can not sustain indefinitely.
• You inherited a property and can not keep up with the maintenance and holding costs while you wait for a sale.
• You have a busy personal life and do not have time to make necessary repairs to your property in order for it to sell on the open market.
• You are relocating and need to sell before you move.
• Your personal life is such that you can not handle frequently cleaning and showing your home for months on end (perhaps due to medical issues or a new baby in the family).

Real estate investors are familiar with all of these circumstances and so many more. Most spend a great deal of time and money on their own education in order to be aware of these types of seller situations and how best to help each individual best sell their property. They are an asset to the real estate community by providing the invaluable service of being able to move quickly to help the seller out of what may be a tough situation.

Certainly selling to a real estate investor is not for every home owner, but for those who are not able to afford the time and sometimes money that comes with selling in the more traditional manner, selling to an investor is an excellent way to quickly overcome these obstacles.

visit REstore Property Group for more information on selling your home