Benefits to seller for an off-market, as-is sale

[Jeff Kochtanek]

I am negotiating an off-market SFH in Kansas City and need help quantifying the seller's cost savings of selling to me as-is rather than listing on the MLS for more. I have already peaked their interest with the facts below and would love to hear additional suggestions from the community.

1. Avoid realtor commissions
2. Reduced CG tax
3. Avoid cost of minor repairs and deep cleaning to make market ready
4. Avoid potential additional repair costs if not sold as-is (termite, radon, other repairs, etc)
5. Avoid cost of home warranty (any other closing cost extras to mention?)
6. Time value of money, I will close 2+ months sooner so they can invest proceeds sooner
7. Value of time, seller accelerates timeline to move out of state after they sell
8. Seller just walks away with far less effort to sell 
9. Lower risk of seller backing out

Background...seller has rented out this house for 23y and is moving out of state. CG tax is a big concern, they even considered moving in for 2y to reduce CG! Seller cannot begin prep to make market ready until current lease ends late June. I have no bidding competition, if seller does not take my price they will list on MLS in July. Seller not under contract with a realtor and owns free & clear.

Thanks for your feedback and feel free to lay down points that may also help others, even if not relevant for me. Hopefully we can build a strong list helping others venturing into off-market deals!

[Vanessa Ryder]

If seller is that worried about CG you might even see if they are willing to explore seller financing. Then they get a steady stream of smaller payments (i.e. Minimize CGT) for as long as they negotiate.
Depending on their stage of life this can make a ton of sense, because yes, a bunch will go in taxes especially if they are at 100% equity.
Always think about what problem they need to solve and approach your solution from there.. ;)

[Angelia Kinston]

No worries about repairs, no need to schedule or hire contractors, no realtor fees or closing costs (cash buyer pays closing).

Get it under contract with 65% of ARV - repairs.

You've covered the other benefits pretty well.

We can talk if you need help finding a buyer for it or others in the future.

[Jeff Kochtanek]

Thanks for the responses!

@Vanessa Ryder great tip, but unfortunately the seller is retired and looking for lump sum rather than payments. Could you please explain how carrying a note would minimize CGT for the seller? Would it reduce GCT or just spread it out?

@Angelia Kinston from early discussions my feel is 80% ARV is lowest I could get. The house require minimal rehab. The Kansas City market is hot right now (~2 months inventory right now) and most on-market listing quickly go over list in my price range. I am only interested in B Class or better locations, but that is another conversation!

Vanessa Ryder

Vanessa Ryder

[Chris Dawson]

@Jeff Kochtanek, I would focus on risk more than anything.

• The risk of spending money to fix it up and not be able to recoup the costs
• The risk  that the market could take a turn for the worst if it takes too long to sell (elections are coming up)
• The risk of repairs being done incorrectly or contractors running off with the money
• The risk of mother nature damaging the house before it sells (we are in tornado season...)