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Updated 10 months ago, 02/05/2024
Seller looking for wholesaler
I'm looking into alternative ways to sell a rundown house for my parents. The house is no longer occupied and needs work. It is a large, old Victorian in a small, rural town. We had a couple "we buy ugly houses" type companies come in and offer less than even the lot itself is worth. I know there is cost to tear down, but feel that even though the house needs work it is more valuable than the offers. There is a mortgage so that also adds to the amount desired, though my inexperienced self still feels it would sell for a pretty penny once fixed up. Is this a situation where we (as sellers) would reach out to a wholesaler? Or if those big companies don't want it, is that an indication that no investor would want it? Perhaps sellers do not contact wholesalers at all? Thanks in advance for any input.
@Leah A. why haven't you contacted a real estate agent? You are questioning the value, unsure what kind of buyer would be interested, etc? THESE are things an agent can help you with! An agent is ON YOUR SIDE as opposed to the wholesalers and investors you mention who are in it to make as MUCH AS POSSIBLE FOR THEMSELVES!
A wholesaler wants to pay you THE ABSOLUTE LEAST you will take in hopes they can find a buyer who will pay MUCH MUCH more and make as much as possible in the middle.
An agent, WORKS FOR YOU, for a set commission. Often times this commission is a percentage, but if the value of the property is LOW, the commission could be a fixed dollar amount.
There seems to be a misnomer around that agents don't work with distressed properties and that couldn't be further from the truth. So, my recommendation is to reach out to an experienced agent and speak to them. Perhaps even talk to a few to see the differing opinions they have and try to assess whether one of them can help you in the way you need.
You should list the property with an agent. You will get more for the property versus selling it to a private party or wholesaler. I understand the condition of the property may not be great, but if you're just trying to get rid of the property, then why does the condition matter to you?
- Geoffrey Rickaby
Hi Kevin,
Thanks for your response. You are correct; I made an assumption that we wouldn't be able to sell through a realtor based on the factors against us. There is also the emotional aspect that makes us want to avoid certain things, like townies walking through just because they are nosey. But it sounds like we'll have to swallow our pride and take your advice and contact a few real estate agencies.
I'm just starting my journey into real estate investing and truly appreciate your advice and knowledge.
Quote from @Leah A.:
Hi Kevin,
Thanks for your response. You are correct; I made an assumption that we wouldn't be able to sell through a realtor based on the factors against us. There is also the emotional aspect that makes us want to avoid certain things, like townies walking through just because they are nosey. But it sounds like we'll have to swallow our pride and take your advice and contact a few real estate agencies.
I'm just starting my journey into real estate investing and truly appreciate your advice and knowledge.
Most townies looking to gawk would come to an open house and open houses are usually done only for houses in nice move-in condition.
A motivated nosey neighbor might try to make an appt to see the property, but in general that doesn't happen too often and agents don't want to waste their time with time-wasters like that. A savy agent sensing a situation like that might simply ask for proof of funds before showing the house which a nosey neighbor is unlikely to have.
Also, you can ask the agent to NOT put a sign on the property. A sign doesn't draw people like it did 10, 20, 30 years ago especially in a more rural setting with less people driving by to see the sign. In this way, neighbors may not even be aware its for sale until after it goes under contract.
Leah, i assume this is in Wisconsin?
Sounds like you have a plan to consult with some brokers and expose it to the open market. I feel that should definitely get you the most interested parties seeing it and therefore obtain the highest and best offer terms. As noted, commission are always negotiable as are brokerage options (full service to discount companies that pretty much just post it on the MLS and you work with all calls, offers, etc) and an agent can go over likely net out scenarios with you and give you an idea what you likely will be able to net after closing expenses and paying off the mortgage balance. I would at least start there and good timing to figure out a plan with spring slowly approaching and our busier sales season in WI.
It sounds like you're in a bit of a tricky situation with your parents' old Victorian house. Selling a property that requires significant work can indeed be challenging, but there are several avenues you might consider exploring:
Local Real Estate Agents: A local agent with experience in selling fixer-upper properties or historical homes in your area could provide valuable insights. They can help assess the market value of the property, considering its condition, and suggest the best sales strategy.
Direct to Investors or Wholesalers: While 'we buy ugly houses' companies often offer below-market rates (as they typically look for deeply discounted properties), reaching out to local real estate investors or wholesalers could be a worthwhile option. These professionals often look for properties like yours to renovate and flip or hold as rentals. You can find them through local real estate investment groups or online platforms.
Auction or Estate Sale: If the property has unique characteristics, especially being a large, old Victorian, it might attract specific buyers looking for such properties. An auction or an estate sale might bring in buyers interested in its potential or historical value.
Market it As-Is: Listing the property on the open market as-is might attract DIY enthusiasts or investors looking for a project. While this might not fetch the top dollar, it could result in a quicker sale at a reasonable price.
Consider Renovation Loan Options: If you believe the house has significant potential value once fixed up, exploring renovation loan options like an FHA 203(k) could be an option. These loans allow buyers to finance both the purchase and the cost of repairs.
Creative Real Estate Solutions: Sometimes, creative solutions like owner financing or lease options can attract buyers who might not be able to purchase outright but are interested in a property like yours.
It's important to weigh the costs and benefits of each option. While selling as-is might bring in less money upfront, it saves the hassle and expense of repairs. On the other hand, investing in some repairs (if financially feasible) might significantly increase the property's market value.
Remember, each property is unique, and what works for one might not work for another. It's often beneficial to consult with a real estate professional who understands your local market to help guide your decision.
Best of luck with the sale!
Hi Leah, I don't agree with the comments about wholesalers I've helped a lot of people struggling to get out of their properties, especially when realtors are asking them to do repairs they don't want to or can't do. As with any professions, real estate agents included, there are good and bad. You can do a bit of your own due diligence to get an idea of pricing in your area and talk to a few wholesalers before deciding. The idea that all wholesalers are bad or dishonest is absurd. Good luck to you!!
Quote from @Leah A.:
I'm looking into alternative ways to sell a rundown house for my parents. The house is no longer occupied and needs work. It is a large, old Victorian in a small, rural town. We had a couple "we buy ugly houses" type companies come in and offer less than even the lot itself is worth. I know there is cost to tear down, but feel that even though the house needs work it is more valuable than the offers. There is a mortgage so that also adds to the amount desired, though my inexperienced self still feels it would sell for a pretty penny once fixed up. Is this a situation where we (as sellers) would reach out to a wholesaler? Or if those big companies don't want it, is that an indication that no investor would want it? Perhaps sellers do not contact wholesalers at all? Thanks in advance for any input.
