Question for house flippers, or people who sold house as is.

[gregmoeck]

We have a property in a neighborhood which the houses sell very fast. Nothing special, but the house needs work. Painting, deck paint, floors are a mess, parrots ate some wood trim, Kitchen sucks, you know.. 15 years of being crammed into a small house. The basement needs work, etc.

Houses sell for X amount in the area, how much difference if you sell it to a flipper or one of those contractor people that say, we buy houses.

Are we talking 20K, 30K? Anyone have an idea? We just don't want to deal with selling it and fixing it up.

[DeeTee]

Can't tell you unless you give comps in the area.
Some cities are very hot, sometimes they aren't. The contractor and flippers are in the business to put in work and make money.

What people think of their home is typically different than what a contractor/bank/etc thinks of a home.

[Etschell]

Originally Posted by gregmoeck

We have a property in a neighborhood which the houses sell very fast. Nothing special, but the house needs work. Painting, deck paint, floors are a mess, parrots ate some wood trim, Kitchen sucks, you know.. 15 years of being crammed into a small house. The basement needs work, etc.

Houses sell for X amount in the area, how much difference if you sell it to a flipper or one of those contractor people that say, we buy houses.

Are we talking 20K, 30K? Anyone have an idea? We just don't want to deal with selling it and fixing it up.

list it at market and let someone beat you down, any flipper will want a profit.

if it needs 30k, they will want 100k off the home price. cant blame them as they are trying to make a profit off their capital outlay.

[gregmoeck]

Originally Posted by Etschell

list it at market and let someone beat you down, any flipper will want a profit.

if it needs 30k, they will want 100k off the home price. cant blame them as they are trying to make a profit off their capital outlay.

I think that makes sense. Thanks.

[Etschell]

Originally Posted by gregmoeck

I think that makes sense. Thanks.

doesnt mean you should give in. normal person will say okay, if it needs 30k, ill take 50k off in case we go over budget etc. the reasonableness is your call.

[Abdullah71601]

Get an appraisal. List it at the appraised value. If your neighborhood is hot, it will sell quickly at that value. If that value seems really low, then consider some major repairs.

Fixing up the house can add value. Get an opinion from a realtor in your area for recommendations. You need to focus your efforts on things that make a profit on your investment, not just add that invested value to the sale price.

[Etschell]

Originally Posted by Abdullah71601

Get an appraisal. List it at the appraised value. If your neighborhood is hot, it will sell quickly at that value. If that value seems really low, then consider some major repairs.

Fixing up the house can add value. Get an opinion from a realtor in your area for recommendations. You need to focus your efforts on things that make a profit on your investment, not just add that invested value to the sale price.

depending on his county he can pull neighborhood sales via the property assessor. much more accurate depiction of value than an appraisal.

[Abdullah71601]

Originally Posted by Etschell

depending on his county he can pull neighborhood sales via the property assessor. much more accurate depiction of value than an appraisal.

I know in my area you have to get an appraisal to get an accurate value of your home. The banks here will only lend against the appraised value.

If his house is dated and beat to hell and the neighbors are modern and pristine, the assessor values won't mean much. It'll be easy to beat him down.

[Etschell]

Originally Posted by Abdullah71601

I know in my area you have to get an appraisal to get an accurate value of your home. The banks here will only lend against the appraised value.

If his house is dated and beat to hell and the neighbors are modern and pristine, the assessor values won't mean much. It'll be easy to beat him down.

I can tell you that the banks want it more for liability purposes than anything else. I've never seen a house not appraise for the purposes of a sale closing and loan disbursement. Banks sell paper all the time.

He can get an appraisal for his own purposes, in all likely hood it wont sell for that. Not a shock I know, but a real estate agent can tell him better. That said real estate agents dont represent you - they represent the industry. I guess my point is the best indication of value is what someone paid for a home down the street from you last week that is exactly the same. No two homes are the same but this is all a real estate appraiser does.

[Ferdelious]

How fast do you need to sell? It may be worth fixing it, I would say most buyers like a move in ready home that way they can take advantage of the lower fixed interest rate of a mortgage instead of getting a home equity line or using their own cash.

[CamSLC]

I occasionally provide financing for investors and contractors doing flips. Every situation is different. If you want to move fast it's an alternative, but there is a cost. On the last deal I recall the original listing price was in the 260's. It sold for $232k, then the investor put in about $75k and retailed it for $379k.

[austinp]

Flippers are typically buying distressed property like foreclosures etc at a considerable discount. Much more than 20-30k. My advice is do the inexpensive repairs like Paint and trim, carpet. Don't touch the kitchen unless you are going all the way with a complete rehab of the whole property . Clean up the yard for good curb appeal.

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[azguy]

I'm not sure what the question is if it's an area that sells get a real estate agent and be done with it.

[GB-man]

Sure you could do that but it would be like lighting tens of thousands on fire. Sell it yourself. Consult with an agent who is knowledgeable regarding your market (Drive around and see who's name is on all the signs nearby).

They can tell you what's worth doing, if anything. I will say that I was looking for a house I could make my own when shopping. Aka I didn't want to pay the smiths for the kitchen they remodeled to their taste 8 years ago etc

Good luck

[breitlings]

I mean I think it also depends on the house itself if it's a million dollar or multi-million dollar home because of the Lot like Old Greenwich CT or Bethesda MD, people may not care since it will likely be a tear-down or gut job. If its a bit further out like back country Greenwich or Potomac MD you could get hammered. One home in Potomac I was looking out sold for 2.5 Million previously and only got 850-950k since it needed so much work and was a short sale. big brick colonial right off of brickyard in Potomac Falls Estates.

[JasoninDenver]

zillow.com is a quick and easy starting point for research of this nature.

I have used it quite a bit when looking at properties in unfamiliar neighborhoods.

[Dark Helmet]

Originally Posted by gregmoeck

We have a property in a neighborhood which the houses sell very fast. Nothing special, but the house needs work. Painting, deck paint, floors are a mess, parrots ate some wood trim, Kitchen sucks, you know.. 15 years of being crammed into a small house. The basement needs work, etc.

Houses sell for X amount in the area, how much difference if you sell it to a flipper or one of those contractor people that say, we buy houses.

Are we talking 20K, 30K? Anyone have an idea? We just don't want to deal with selling it and fixing it up.

Yes, I sold a house that needed a lot of work. In your case, you're talking losing over $50K, easy, maybe more.
GET THREE REALTORS in the area. Bring them in separately. Ask them what can be done that's cheap and quick to fix up the house, then what will it sell for.
Remember, there are always young couples who want to buy a beater that can be repaired, in a nice neighborhood. That's who bought the house I sold, (my mother's house) and that's what my wife and I did twice. We bought homes that needed work that others passed up. You won't get what a really nice house will bring in that area, but you won't take too much of a pounding either. You'll be surprised how quickly a bargain sells for.

[gmh1013]

Originally Posted by DeeTee

Can't tell you unless you give comps in the area.
Some cities are very hot, sometimes they aren't. The contractor and flippers are in the business to put in work and make money.

What people think of their home is typically different than what a contractor/bank/etc thinks of a home.

I retired off flipping houses in Phoenix area before the crash.....and yes everybody thinks there house is worth more than it really is. I just looked for repo bank or off to buy out peoples houses that were going to go into repo. You have to do your homework or you will get screwed. Ive made as little as 10k off a house in Mesa and as much as 420k off some condos in North Scottsdale. Every city different. Good Luck!

[Benny24]

In California most "investors" look for a $100k spread. The reason being after repairs, brokers fees, closing costs etc the profit is usually $20-$30k

[KDS777]

Just sold two properties in the last 90 days. One condo was like new so that doesn't count, but the other house was in "original" condition from when it was built 40 years ago. Here's what I did.............the HGTV crash course.

1 - Estimated the reno costs to make it 100% salable and "like new" to attract the most "retail" buyers possible.........$35K was the reno estimate.

2 - Looked at the comps in my neighbourhood. Priced my house 10% lower than all the cheapest comps........which all needed $30-50K of reno's as well, since they were original's like mine.

3 - Paid a RE commission higher than the norm. My neighbourhood is dominated by $450-500K "perfect" homes with garages (a $25K item I was missing)......so I paid a flat dollar value commission equal to what they would get earn for a sale at that price level......it cost me $5K more...but so be it.

4 - Had 40 people thru the first and only open house. 75% retail buyers and 25% speculators/flippers according to my agent. Listed at $349K (nearest comp was $379K for a fixer upper).....sold at $327K.....closed in 2 weeks all cash......as is.......no home inspection......no nothing.

Several of the homes that were perfect, or the higher priced fixer uppers, are still for sale. As an FYI.....the house was paid for, no distress sale here....just working the math and basing it on reality, sans emotion, in a slowly crashing market with a 30% reduction in sales from the previous 2-3-4 years.

[Dr.Brian]

You'll always get lowballed as they'll assume, usually correctly, that the repairs will be 20% more than the estimate, and if it's an older house, they'll find some other nasty surprises as well.
My parents have an ancient NYC house that I dread having to deal with. Do we do a $500k++ remodel that we'll have to contract out for an onsite project supervisor to manage and hope to make a nice profit or just dump it as is. Everything works fine but as soon as work starts it will need everything ripped out and replaced.