Just in Time to Close Another Deal in 2022
Selling a home after a death in the family can be difficult. Emotions can run high when the loss is recent or if the property being sold was a family home where the heirs to the estate were raised. In the case of 2519 Belleview Avenue in Alexandria, the estate selling the home had not experienced a recent death. Rather, the owner (mother of five) has passed away in 2018, but it was the home where the heirs were raised.
The executor first mentioned this home to me when I helped her sell another home owned by the estate. That was the year her mother passed away. The family home on Belleview had been vacated by the deceased ten or so years prior to her death and one of her sons was renting it. The sibling named the executor of the estate in the will used her best judgment and let her brother continue to rent the home. The estate was collecting rent and paying to maintain the property, which included having a new water heater, new roof and new furnace installed since 2019. However, annual estate reporting to the county, which was more invasive than a tax return and costly, was becoming too much and the executor ended the lease with her brother.
Touring the home with the executor, it was evident that no cosmetic updating, or general upkeep, had been done to the home. As executor, she wanted to know what selling the home would net as-is versus fixing it up and getting it to market spec, which would be updated and move-in ready. No agent has a crystal ball on what investors will offer, but based on what the dollar figure was to renovate the home, and adding a profit margin for an investor, we had a ball park idea of what the as-is value would be. More importantly, with the cost to renovate and the price to sell renovated as known quantities, we knew what was too little to accept.
With low expectations of what investors with cash would offer on a home that needed its plumbing lines and electrical panel brought current, new sub-flooring on the top and bottom levels and cosmetic updating from top to bottom, we hit the market with one photo and a very detailed description of the property condition. The list price was set at a very optimistic $455,000. Cost to update in hand, the lowest amount that would make sense to accept was $399,000 before taking on updating and selling for the market value of move in ready.
Low and behold, after six offers in only three days, there were two owner occupant offers. One at list price with cash, another above list price with a conventional loan. The highest of the investor offers was $405,000. The executor was delighted to accept a full price cash offer for $455,000 that netted her the same amount as if she had done the updates and sold for the highest probably amount the market would allow. There was no waiting for renovations and worry about what the real estate market would be in five months.
What was really an exercise in finding the highest market value for the home as-is ended up being the best course of action. After choosing the full price cash offer, the executor politely requested that they settle prior to the end of 2022 so the estate would not have to file a 2023 tax return or 2023 estate report. The buyer graciously accommodated.
When you are dealing with an outdated home and unsure of what course of action to take, get in touch with me for your complementary consultation. My connections with contractors that can be paid at closing makes renovating a real possibility for cash strapped sellers. All you need is a quote on highest dollar return renovations and a look at the value of selling as-is vs. selling renovated. The right choice for your situation and your property will become clear when all the information is gathered.