Have you thought about how much it costs to maintain a house while it sits on the market? (This is also called “holding costs”.)
One of our acquisition specialists, Alicia, shared this story with me last week. I thought it would be helpful to share with you!
“A seller called me in December because she needed to sell a house fast. I went to her house the same day she called because she lived out of town and wanted to get it sold that week. She really just wanted to leave and not worry about it. I offered her $40k for it and she declined the offer. She would not take less thank $60k (at that time).
This seller knew a real estate agent who said that she could get the price she wanted and volunteered to help her sell it. Since the house was vacant, the seller decided to use her realtor friend.
I’ve been following up with her since then and monitoring the Multiple Listing Service (on HAR.com) to see what would happen.
91 Days later (May 1, 2013) it sold on the MLS for $44,650 cash.
That means she had to pay closing costs, commission and maintain the holding costs of the sitting house for 3 months. She walked away with almost the same amount we offered her initially, or less.
While this isn’t always the case, it is definitely a reoccurring scenario. Some people choose to list with the realtor because they are determined to get more money for the house, but they don’t account for all the expenses and costs during the process such as taxes, insurance, utilities, closing costs, commissions, contributions, etc.
In this case, the seller could have avoided worrying about this house for 3 months – living so far away – and dealing with anything that was required of her. For the same amount of money, she could have sold and closed the property and had cash in hand in less than thirty days. People see that an agent or another buyer can give them more money, but it’s harder to see all the hidden costs along the way.
Sometimes, selling to an investor versus selling the traditional way isn’t much different. Selling to an investor can be, to some, surprisingly beneficial.”