There are nearly 1.5 million vacant homes in the United States, and many of them are in a state of distress. Selling a distressed property can be a challenge, but it isn’t impossible! We have put together this simple guide to show the best well to sell a distressed property.
So, before you find yourself in a state of distress over your property, read this guide!
What Is a Distressed Property?
A distressed property is a blanket term used for properties seized or in foreclosure from the lender. Usually, this happens because the property has experienced some sort of incident, and the owners feel that the property must be condemned.
The problems with a distressed property could be anything from a biohazardous accident to a former hoarding house. In most cases, people feel that the home is a lost cause, and they will be unable to find any distressed property buyers; however, with a few steps, it is possible.
What Is Wrong With the Home?
As we said, there could be several reasons that a property has become distressed. For example, studies show that 20% pass away in their homes; sometimes, they are alone when they pass and are not found right away. When a person dies inside of a home or property, there are certain measures that by law must be taken to ensure safety.
Another issue that causes properties to become distressed is a surprising one…Meth labs. According to the DEA, there are literally thousands of Meth labs around the United States. When they are found, the property becomes a hazard zone immediately and cannot be inhabited.
Hoarding is another issue. In some cases, hoarding homes can be littered with dead animals, rotting food, decaying wood, and more. All of these issues pose serious biohazardous threats and must be cared for by professionals to ensure safety. Because of these issues’ complex nature, many people let distressed properties go into foreclosure rather than handle the problems on their own.
What Can Be Done?
When dealing with a distressed property sale, you need the help of professionals. A professional clean-up crew will have the right skills and tools to properly handle biohazardous materials, dead bodies, hoarding materials, etc. They will restore the property as best they can to get it to a safe state for re-entry.
A professional crew can also work with the property owners to get the clean-up covered by an insurance company to help mitigate costs. Dealing with a distressed property can be stressful and heart-breaking depending on the situation, so having reputable pros to work with you through the process can help.
What to Avoid
Professional clean-up crews will be licensed and insured. You should avoid working with anyone under-the-table for clean-up at all costs. Handling biohazardous materials is dangerous and could be life-threatening. You, or anyone you hire, could be at risk if you try to handle the clean-up on your own.
Time is of the essence in most cases involving distressed properties. Do not wait to take action because more time and money will be needed to restore the property. The goal is to preserve the home’s value as much as possible, so contacting a professional as soon as possible is essential.
Once the home is safe for re-entry, you can start taking measures to spruce up the property. If the property was a hoarding house, you will want to have the property examined for structural damage. Consider upgrades to the home like new paint, carpet, etc.
Keep in mind, even with clean-up, the house will most likely not sell for the original value. With that being said, proper clean-up and minor upgrades can increase the value greatly. You will want to get an accurate read on the property value, so working with an appraisal expert is a good idea.
If the price is too low, people will wonder what is wrong with the property, and if it is too high, you might scare off potential buyers. Not every state requires you to disclose what happened with the property; however, in this day and age, it isn’t difficult for buyers to research the property they are interested in purchasing, so being upfront might be the best course of action.
With the extra effort put into clean-up the property, you will want to get a good sale price. You have a few options to take, the first one is working with a professional buyer. Professional buyers generally pay cash for distressed properties and then flip them after the sale.
Working with a professional buyer gives you an easy sale and it will save you time. Some professional buyers, such as Spaulding Decon, not only buy distressed homes with cash they also take care of the professional clean-up!
Selling at auction is another choice for the property. The sale of a distressed property at auction usually is an as-is sale, however, if you make an effort to hire a crew to clean-up the property, your initial asking price can be higher. Remember that there are many variables to an auction sale; from low attendance to low bids, you can never be 100% sure what you will get for the property.
If money is still owed on the property, you might want to consider a short-sale. A short sale is selling the property for less than is owed and then making payments to the lender to cover the rest of what is owed overtime. This might be the best option if you are trying to get as much as you can in a fast time frame.
Making the Right Choice
Selling a distressed property is challenging, but with the right steps, you can make your life so much easier! Starting with a professional clean-up crew is an essential step.