Regardless of why, there are times when you need to quickly liquidate your investment in real property
■ By Joyce Miller / Contributed
We’ve all found ourselves looking at a situation where we had to sell an asset quickly. When it comes to a home, there are 12 basic steps that you can take to ensure that you find a buyer quickly. We’ll treat six of them in this article and refer to Part 2 of this piece next week to discuss the second group.
A couple of scenarios come to mind. First, there is a parent or other family member that reaches the point where they need to move into a living situation that offers greater support, like independent living, assisted living, or long-term care (skilled nursing or memory care nursing home).
Maybe marital circumstances have changed and a couple needs to sell their home to properly divide the assets tied up in the home. This also applies if a business partnership is about to be dissolved, where a business is being operated in a home or other parcel of real estate.
Maybe your children have finally all moved out, gone to college or off to a job, and you are sitting in your four-bedroom home alone or with a spouse.
Maybe you need to relocate to take advantage of a new job opportunity that you just cannot pass up.
Or suddenly that old back problem has returned with a vengeance and your doctor tells you that you can no longer live in your two-story home that has been in your family for years … and none of your kids want to take the old house on. Sound familiar?
All of these scenarios and more can suddenly thrust you into the unenviable position of having to unload your home or a family member’s home quickly. You need to formulate your strategy as soon as possible. What is the best path to getting that house sold? Let’s see what those 12 steps involve.
Step 1: Know your neighborhood. The first step in selling a house is to know your neighborhood. Are there other properties on the market or only a few? Is your neighborhood desirable to live in or in an area that is in decline? How fast are homes turning over? Do you know the neighbors near the house to be sold? Is the neighborhood more of a tract-built neighborhood or composed of custom homes? Is there farm land or vacant areas sandwiched in between the homes? The more you can learn about the neighborhood and surrounding areas the better.
Step 2: Compare your house to others. Not all homes in a neighborhood are on the same level. Some are much larger and some much smaller. Some are in better or worse condition. Where does the house you need to sit within the spectrum of houses in the area? Hopefully, you will be somewhere closer to the middle than the edges of the range.
Step 3: Perform a quick review of the home’s value. You can use resources on the Internet like Zillow or Trulia, or Realtor.com. Pull up a map to find the neighborhood your home is in and review what is already listed. You can compare relative values of different tracts near your home quickly with this method to get a rough idea of the sales prices for homes selling in the area. For a family area, check out school stats to see what kinds of schools are in the area. Crime stats can also be useful.
Step 4: Look at the condition of the home. Study the home through the eyes of a buyer. First, determine what is broken that needs to be fixed so the home can be sold. At a minimum, you must legally have smoke detectors and carbon-monoxide detectors properly installed (carbon-monoxide detectors are now being installed low near the floor) and water heaters must be strapped and braced to current seismic standards. That will satisfy California law for selling the house. Everything else is a judgment call … do more or do less. A careful assessment of the house will result in your own punch-list of fixes and improvements that you can choose to do to upgrade the home for a better selling price and move it quickly.
Step 5: Contact a home inspector. Professional home inspectors know a lot about homes and what can be wrong with them that will come out later when a buyer looks at it using his inspector. It isn’t required or even done very often, but if you can get a good home inspection for a few hundred dollars it could be a very wise investment to learn what you are dealing with, particularly when the home you are selling isn’t your own.
Step 6: Get an appraisal. In California, licensed appraisers are all independent and no longer associated with banks. This is to your benefit. An appraisal for a residential home and surrounding property will run $650 and up depending on the area and the size of property and type of appraisal. These are highly useful in setting your price, particularly if you plan to sell the house yourself.
Next: Steps 7-12, do the necessary repairs and decide whether or not to use a broker.
Joyce Miller is a member of the National Association of Realtors and California Association of Realtors and has been a licensed realtor for the past 18 years. Prior to that, she was a real estate investor for 10 years doing rehabs and flips. Miller holds a BS in business management and an MA in educational leadership from the University of Redlands. She can be reached at firstname.lastname@example.org.