We’ve all heard the saying, “One man’s trash is another man’s treasure,” and believe it or not, the same can be said for real estate. While selling a distressed property isn’t as simple as a traditional transaction, you never know what buyer might come along and see the opportunity to claim their castle. With the right strategy, one can sell a distressed property in San Diego with little hassle and a reasonable return. If you’re wondering how to best capitalize on your distressed property, continue reading for some insider tips.
Depending on who you ask, the term distressed property can mean different things. The following parties may be involved in the sale of a distressed property:
Distressed properties don’t always necessarily show signs of physical wear and tear. Rather, the value of the property is based primarily on its benefit to prospective buyers. This could include lenders, first time buyers, or even government agencies who wish to clear the property for another use. For example, a first time home buyer could view a distressed property simply as a “fixer upper,” while a lender tends to be seeking the highest return on investment.
Distressed properties do have value, though this can lessen with damage. There are a number of things that can be considered “damage” to a property. This damage could be caused by natural occurrences, such as an earthquake or flood. Or, damages could be caused by negligence on the owner’s behalf like vandalism, theft of attached fixtures, or just general neglect. Before deciding what to do with a distressed property, it’s important to take a detailed assessment of its condition to determine a clear value.
Plenty of people get stuck on what exactly to do with their distressed property. While some choose to sell and wash their hands of the hassle, others may wish to revive the property. In the event that a loan is secured, there’s always the option of refurbishing the distressed property to its former glory. To weigh this against your option to sell, we recommend getting quotes from several contractors, landscapers, electricians, and the like. That way you can determine if it’s worth shoveling money into, or if you should just cut your losses.
When scouting for the right San Diego real estate agent, you may want to consider someone who specializes in distressed properties. Because distressed properties have their drawbacks, they don’t always market as well alongside traditional properties. Especially in the San Diego real estate market, where there are many desirable listings, you’ll want to find an agent who can emphasize the appeal of your distressed property and downplay its pitfalls.
In the event that you decide to sell a distressed property in San Diego, it’s important to disclose to potential buyers that it needs work. When listing the property on the MLS (Multiple Listing Service), be specific about any damages and potential repairs that will need to be done. Everything from a weakened foundation, to pest or mold removal, and even neighborhood nuisances should be disclosed so that buyers know what they’re up against.
Determining the value of a distressed property can be challenging, as you can’t quite compare property values with other turn-key homes nearby. A distressed property’s value also takes a hit when you factor in the cost of any required repairs. To get the best idea of a distressed property’s value, it’s best to seek several professional valuations before settling on a set price.
If possible, making a few minor upgrades to your property can make a big difference. Distressed properties are tricky to market as it is, so adding to their appearance will assist in securing a sale. This could be something as simple as grooming the lawn, or giving the mailbox a fresh coat of paint. Don’t underestimate the power of a little curb appeal. After all, first impressions are everything!
One of the biggest mistakes that people make when selling a distressed property in San Diego is that they set their expectations too high. San Diego is a very desirable destination to live, and the competition among buyers is palpable. And while this could spell success for selling a distressed property, you’re not likely to see a huge return on investment.
Finding funding for a distressed property can be difficult if the house has suffered extensive damage. They’re not only difficult to appraise, but lenders aren’t eager to finance a property that’s structural soundness could’ve been compromised. In such cases, one option to consider is selling for cash. Increasingly, buyers are making cash offers on properties to expedite the home buying process and avoid unwanted red tape. By accepting a cash offer, you’ll also avoid having to carry out any repairs.
Determining what to do with a distressed property isn’t always black and white. There are many factors involved that might affect one’s decision. It’s important to consider all of your options, seek several opinions, and don’t rush into any agreements. Once you’ve carefully weighed all of the outcomes, only then can you truly decide what’s best for you. Should you choose to sell, don’t get discouraged by what you read or hear. Selling a distressed property in San Diego can be a pleasant and stress-free experience with planning and patience.