Have the Right Strategy When Selling Estate Property
Written By: Seth Greenwell, Action Sales Group | Posted: Friday, July 22nd, 2011
Here are the three most common challenges faced when selling an estate property and the answers on how to overcome them. An estate property is real estate that needs to be sold out of probate or Trust after the owner has passed. There is a personal representative or trustee who is usually pre-appointed and entrusted with selling the estate's assets. The Real Estate is usually the largest and the most complicated asset that needs to be sold. Here are the three challenges and solutions.
The first challenge is preparing the property for sale on a reasonable budget. Many estates have little or no cash and the personal representative is usually not capable of investing personal funds. There are three basic low- or no-cost steps. First, you must remove all disposable items of no value. Second, depersonalize the property by removing family photos, etc. Third, neutralize the home if possible by painting and add inexpensive neutral colored window coverings. Expose the hardwood floors if there is older carpet. Buyers are picky, so you are trying to offer them a blank slate in which they can work to make it their own.
The second challenge is establishing the right price. Real Estate values are still declining in most areas, and the number of qualified buyers is shrinking. The taxing authority which establishes property assessments and an estimate of fair market value cannot be trusted as an accurate representation of value. Here is a low-cost way to establish the right price if you do not have an appraisal. First, look at the most recent sales in your area that most closely represent your property. The recent sales prove what buyers have been willing to pay for a similar property in your area at that time. Second, examine your competition. Look at the properties in your market currently for sale and price your property to be better than them. Have more value, not the same as the competition. Since only about 50% of the homes listed for sale actually sell, have a price that says to the buyer that you are serious about selling. This is critical in a declining or flat market.
The third challenge is how to sell the property "as is" but still pass the buyer inspection and the bank appraisal. As stated earlier, many estates do not have extra money for repairs and must sell "as is." The majority of buyers will be getting the home both inspected and appraised before they purchase, but consider inspecting the property beforehand and giving a copy to the buyer before they make an offer so they know the "as is" condition. Peeling paint will be an issue the FHA loans, so attempt to eliminate that condition if possible.
If major repairs are needed, such as foundation work or roof replacement, keep in mind that banks rarely are allowing money to be escrowed for repairs. They want the repairs made prior to closing the transaction. Attempt finding qualified licensed contractors who can do the work prior to closing and can be paid out of the estate's proceeds at closing, or reduce the price to reflect the repairs and market to investors and rehabbers as a cash sale.
Seth Greenwell is a member of Action Sales Group at Realty Executives Integrity, Personal Representative Advisor. You can email him at email@example.com or call him at 262-439-7005.