Imagine this:
• You need to sell your house but you can not have you have let it run down over the years and it needs lots of Tender Loving Care.
• You can not fix it up because you do not have the cash.
• You are behind on the Mortgage Payments.
The solution to selling these difficult homes is surprisingly simple, and incredibly effective. The easiest way to explain a House Selling Strategy (or a House Buying Strategy for that matter) is through an example.
Here goes:
The Handyman Special
It is now worth $ 200 000. All the other houses in your area are worth $ 300 000. The Situation - You are a seller with a house in a bad state of repair.
• The neighbors are on your back to Renovate Your House because it is bringing down the value of their homes.
You can not afford to pay the $ 30 000 for the repairs and you can not possibly find the time to DIY. You & # 39; re too busy working to try and pay the mortgage payments for that!
Here is what you do - "Make Your House Easy to Buy, so it Will Be Easy To Sell". With the Handyman Special strategy here are the steps to follow:
1. Let 's assume that if your house was in good condition it would be worth $ 300 000.
2. This let them to lend a buyer $ 240 000 to buy a $ 300 000 home. 2. Let 's assume (conservatively) that the bank will be happy to lend on an 80% Loan to Value ratio.
3. Next thing to do is put your home up for sale at say $ 270 000. In your marketing, ask for people who are Good With Their Hands. $ 300 000. When when a buyer comes to inspect you should expect them (to they have eyes in their head) to baulk at the price when they see the poor condition of your house.
4. It is a cost of $ 30 000 but if the buyer would be happy to do the work them instead they would be happy to knock off $ 30 000 and sell it to them For $ 240 000 instead. This buyer does $ 30 000 deposit in the form of "Sweat Equity". The buyer needs NO CASH DEPOSIT.
The seller will get will $ 40 000 more than expected ($ 240 000 instead of current value of $ 200 000 The seller does not have to spend precious time doing DIY Renovations.
The buyer knows that DIY is much cheaper than the $ 300 000 it is fixed up. The buyer only pays $ 240 000 to the seller. $ 30 000 quoted to the seller - say $ 4000 to $ 8000, using their own skills and network (relatives, friends, professional contacts).
He / she has $ 60 000 of "equity" in the house before they even move in (this is 20% of the house value).
Conclusion: How does this all end?
• The Bank sees a house worth $ 300 000 and a buyer who has a contract-for-sale for $ 240 000. They are deferred to lend 80% of the valuation to the buyer ($ 240 000). Happy Bank!
• The Seller gets $ 40 000 more than he / she ever believed possible and did not have to spend a penny or lift a hammer to get it. Happy Seller!
• The Buyer gets a beautiful home decorated and renovated to THEIR Tastes and the only money $ 9000. NO DEPOSIT needed. The bank cave them ALL the money they needed to buy the house at the seller & # 39; s price of $ 240 000. Wow - a beautiful $ 300 000 home for only $ 8000 cash. Happy Buyer!
So the "Handyman Special" Strategy for Selling a House has in this case resolved in Happy Seller, Happy Buyer, and Happy Banker. Now that a WIN - WIN - WIN situation.
