What is deferred maintenance? Basically, it’s all those little (or big) issues that crop up in a home and need to be repaired. Regular home repairs become an unavoidable expense for every homeowner, but if you want to sell your house the traditional way, these issues need to be taken care of before listing with a traditional real estate agent.
A real estate agent considers deferred maintenance or those “minor repairs” to be a big deal when you have a prospective home buyer viewing your home. (Honestly, they can’t see past them.)
Buyers want to invest in a home that comes worry-free, with no extra costs. A home with deferred maintenance issues can leave prospective buyers wondering about other potential issues in need of repair that could creep up during a home inspection.
So, what happens if you don’t have the time or money to repair those issues in your home, or they suddenly add up and become big issues? Those little problems that become big problems come with an even bigger price tag. A real estate agent will tell a homeowner that deferred maintenance will need to be addressed before listing a house, but this isn’t necessarily the case. It is just based on their experience because they don’t specialize in selling homes as-is in Houston.
How to Sell Your Houston Home with Deferred Maintenance
If you want to sell your house but can’t put the time and money into repairing all of the issues, we may have an answer for you. If you research what others in the housing market are saying about selling with deferred maintenance, you’ll see this is a big decision to make.
Renovating is a headache and there are definite stressors involved in the process. Getting quotes and the disruption caused to your life (especially if you are upgrading the kitchen and bathrooms) adds to the stress of selling your house.
If for whatever reason, you would like to sell your house with deferred maintenance, it’s not a problem. Yes, your selling price will be lower than if you were selling without any deferred maintenance, but these two questions remain: Will you get as much money out of the sale as you put in to complete the renovation? And is it worth the extra time, work, and headache?
The best thing you can do as a homeowner who wants to sell your home is to determine what type of buyer you are trying to attract. Will they be open to buying a home with deferred maintenance? Will the best buyer be an investor who plans to fix up the home or an end buyer? This is where the investor conversation comes into play.
What is a “We Buy Houses” Investor?
A home investor, when talking in real estate terms, is someone who buys a house, as is. They will look at it as an investment property in order to make a profit. There are three strategies investors explore.
First, they may fix it up to resell. Second, they may fix it up but choose to keep it as a rental property. Third, they may simply assign the contract to another investor as a “middleman.” (We’ll get into that shortly.) Read this post for more information on how to properly evaluate a cash buyer to tell if they are legitimate.
Selling to a company that buys houses as-is can be a great and simple option for many sellers. But if you are trying to relieve yourself of a home with lots of deferred maintenance, make sure you understand the terms of your agreement with your cash house buyer or company that can close fast.
One thing to be aware of are the nuances or types of real estate investors offering to buy your home for cash, as mentioned above. There are a number of companies considered wholesalers that often can’t fund the transaction themselves, and you should ask this question up front. The key word here is “wholesaling.”
What is a wholesaler? Wholesale investors seek to get the property under contract with no intention of actually purchasing it themselves. Instead, they will send the property under contract out to other investors in their network. They do this after “marking up” the property, seeking to earn the difference between their agreed upon price with you, and their end buyer.
To be clear, wholesaling isn’t bad or wrong. At PPS House Buyers, there are times it makes more sense for us to help you sell your house fast in this manor. For example, we have a network of people who have specific interest and expertise in buying properties that have flooded in the Houston area. We are always up front with our clients if this is the best strategy for them.
The point is you need to understand the intentions of the company offering to buy your home, and ensure they can actually perform. Why? Choosing a company that can’t locate a buyer (or perform on the contract themselves, if they can’t find one) will waste market time, increase your holding costs, and delay you advancing to the next stage of your life.
What Is an End Buyer?
Again, anyone who is interested in buying your home (if they’re not interested in living in it) is going to try to make a profit in some way or another. The biggest and most important difference between an end buyer and an investor is that the end buyer is often evaluating the property to personally live in. It can be difficult for end buyers to envision a finished product, or in other cases, afford both their down payment and the cost of renovating the home. This is why selling with deferred maintenance is often more easily done with an investor or company that buys houses.
So, What’s the Bottom Line?
You have to take a look at what you want out of the sale of your property, and your ability to find the costs of producing that number. If you are experiencing circumstances that are rendering you unable to do any upgrades or renovations to your property, selling an inherited home that needs work or property with a lien on it, this is the best route for you to take.
Whatever reasons you have for wanting to sell with deferred maintenance, a well funded and experienced home investor is the most direct route to closing, and the most stress-free way to ensure the property you want to sell is off your hands. This will help you retain the most of your cash savings, and enable you can move on with the next chapter of your life.
Want more information on selling your home? Contact us at PPS House Buyers today.