The ARV is the "Value of Repair" This is what the house would do if it had been completely remodeled to the current year's expectations. The ARV is calculated by running comps on properties in the neighborhood of the properties topic.
This is pretty clear about what it means, but there is a crucial point that needs to be made. This is the "Our" cost of repair. This means that we are following our standard to make the HGTV house ready to talk.
It is important to understand that there is a major difference between the cost of painting a room and replacing a carpet, vs. painting, texturing, installing thick baseboards/crown molding and putting down hardwood floors, etc.
This include fees, closing costs, and home warranty. Although you don't have to pay a realtor fee when you're using a Sell My San Diego House investor, we're going to have to renovate your house.
As soon as we buy the house, we'll start paying all the stuff you've been able to avoid paying – taxes, insurance, electricity, etc. The longer we have to retain the property before selling it, the more we have to pay for the costs of keeping it. Every day you wait to close your deal, you lose the cost of keeping.
As much as we enjoy volunteering and helping homeowners out, we have to make a profit in our business, or we're not going to be able to do it for a very long time. This is where it comes into play.
Total = $1083.68 per month
To make this example cleaner, we will round the holding costs to $1K per month.
ARV = $150K
Repair Costs = $15K
Holding Costs=$3K (It took 3 months total to complete and sell the property @ 1K per month)
Profit From Resale=$19K
Your Offer = (ARV) – (Our Cost of Repairs) – (Selling Costs) – (Holding Costs) – (Profit From Resale)
Your Offer = $150K – $15K – $3K – $13K – $19K = $100K
So our offer to you would be $100K
A Closer Look @ the two options
Realtor & Remodel = $108K
Sell My San Diego House = $100K
In this case we would be offering you $8,000 less for your property than you would get if you spent the 4 months doing the work and listing the property instead.
We're taking these chances, so you don't have to.
Listing As-Is has its own set of problems. Let's take the same house and see how much you can get.
It's more difficult to list a house like this if someone uses a bank loan. You would likely need to correct some of the issues reported in the inspection report or lower the cost of the land. If the individual offered you cash, they're not going to give $110K. They're going to give you $100K.
For the sake of convenience, let's say you ended up having to replace the HVAC system with a few small items that totaled $10K.
We're going to name this business – Home Buyer A
You're probably thinking that $80K is a really low bid. Why not just use the other equation? – New and novice customers don't use enough variables to make them less confident about the numbers they're dealing with. If investors are not certain, they appear to be more conservative and bid less.
After you have provided us with the property information, you will soon be contacted by an investor (usually within 24 hours). We may need to obtain additional information in certain cases. We should be able to make an offer right over the phone, or we will arrange a time to see the property and make an offer in person.
All types! No matter the condition, area, price range, or situation, we will give you an offer! We buy houses as-is. No repairs necessary.
Absolutely not! We're just going to review the details, make an offer to you, and you choose to accept or reject it. It's your choice!
A typical sale requires an inspection and paying for maintenance, painting and cleaning. It's costly and time-consuming. Then, if it sells at all, it can take months or even years. That's why we do it differently. We will pay cash for your house "as is", which means:
No repairs. With us, sellers don’t have to spend time and money fixing up their house. We can buy a house even if it could use a few repairs.
Same for cleaning. It’s okay if there’s mold in the shower or cobwebs in the corner. We don’t mind.
No paying typical closing costs. We can take care of normal closing costs so the seller won’t have to worry about that aspect.
No open houses. Open houses can be stressful, as dozens of potential buyers wander through the home. With us, you’ll just meet with one person, a friendly local franchisee who is ready to make an offer.
No waiting on bankers. It can take a long time for a bank to grant approval, and we understand that waiting can be hard. That’s why we use a process that is quick and efficient. In fact, our sellers can even close in as little as three weeks.
Please contact us at email@example.com with your question and we’ll be happy to assist you.