Why don’t owners just sell distressed property

Question

I have someone in our neighborhood who I heard “may lose his home”. Obviously distressed, however homes have appreciated and I believe he could easily just list and sell it. If someone is behind on payments, can they sell the home? Trying to wrap my head around why he wouldn’t just sell.

Ron Fletcher · Answer

@Brian Christensen Emotions

Bob Okenwa · Answer

Yes, they can sell the home if they are behind on payments. It is not as cut-and-dry as you make it to move on from something that has such great value to an individual or family. Memories and experiences weigh heavy on the heart and mind and the thought of just moving on from them is not an easy one. Some owners cherish these memories and experiences to the point their minds become clouded from reality. Other owners believe they can climb out of the hole before the hammer drops and fight until the bitter end to save their homes. Then there are owners who understand their situation and agree to sell their home for below market value while taking whatever equity they can and avoiding foreclosure.Everyone has different reasons for acting in certain ways during stressful moments. Hard to judge someone else's behavior from the outside looking in without understanding their particular situation. It can be a little easier to sell these days since OfferPad, Zillow, OpenDoor, etc. will buy homes directly, but if you own a home that doesn't fit their criteria (newer homes with no major defects that only need paint), you can find yourself trying to sell a house that nobody wants that sits on the market for an extended period of time.

Frank Wong · Answer

In many cases, the owner is elderly and just doesn't know the value of their home and they are scared. Scared that they will lose the one thing that has protected them.

Chris Mason · Answer

Goes to show that you shouldn't assume someone is smart because they have a graduate degree, and do not assume that everyone in "high paying" professions such as law, medicine, etc, is high income. Especially if they are in private practice, which is just as much sales as it is lawyering/doctoring (if not more).

Rick Pozos · Answer

These are the types of deals that I purchase most frequently. You really have to inform the owners that they are getting close to losing the property. In Texas the window for foreclosure is 21 days. First Tuesday of the month is when the foreclosures happen. It is very emotional for me to see what these people are going through. There is always family fighting, loss of job, sick relatives and a host of other problems. Be prepared to be a friend. Help them with their situation. I have helped more people stay in their homes than I have purchased. Even though I could have made a bunch of money, I am happy to have helped so many people.

Adam Gollatz · Answer

Could be a variety of factors but most likely he's in denial or cant wrap his head around selling the house, moving, and whatever financial burden put him in that situation. Theres also the very likely scenario that he cant. It costs about 6-10% to sell a house. If he only put down 3.5% or timed the market wrong, chances are he doesn't have the equity. He would need to short sale. I saw a house today listed (not selling) for the same exact price it sold for 10 yrs ago.Thats why some people say primary residences arent investments and dont rely on appreciation.

Pat L. · Answer

We did the same up here. It sat empty for 2 years while the beneficiary in New Mexico struggled to determine what to do with it. We triggered a sale by approaching her & got it CASH. close in 30 & DID NOT insist she clean it up. That property today is worth 3x what we paid & collects 20% ROI. I remember years ago a beautiful old mansion was rotting away. The owners had divorced & no one would budge on the sale of it no matter how hard we & others tried. I often wonder what ever happened to it.

Keisha Andrew · Answer

@Brian Christensen Fear can make a person do things that are unimaginable. Sometimes home owners just ignore the problem knowing that they have plenty of time to default before actually getting the eviction. Anything that has to do with your home is a very emotional experience for lots of people. If you are really interested just have an honest conversation with the home owner and get creative with your offers. Most investors unfortunately can come off just rude. Being genuinely nice to person can go a long way, hope this helps!

Jennifer Jones · Answer

@Rick Pozos. I would love to pick your brain on analyzing a possible deal. We have friends that are looking at a foreclosure and want to sell their house for the cost of the loan. Since it sounds like you do this primarily I would love to hear your opinion on this particular deal.

Mary M. · Answer

elderly folks sometimes have a hard time as their memory goes and they lose their independence slowly day by day. They cling to what they know and so sometimes their home is where they have lived for 50 years..... Try to imagine what it would be like. I hope if this *is* an elderly person that a church group, family members or concerned citizens step up and help they person stabilize so they can stay in their home if they so choose. many times elderly want to die in their homes. So I hope that if this is the case, that they can stabilize and not get taken advantage of. If you have not seen the elderly go similar to the above, perhaps you cant imagine, but it is heartbreaking.