Hey guys! Its been a while since I’ve been on the site. I’m working on my second rehab, my first one being a success. I’ve finished the house and it’s now about to go into it’s fifth month on the market. Should I be concerned because the first went in nearly four months or is this just the normal ups and downs of the market? Are there any suggestions or possible explanations for the slower turn around? Thanks guys!
This is the part of the game sellers will be facing as the fed continues to raise the interest rate. As the interest rate climbs, it makes fewer and fewer people qualified to buy a house, hence the longer DOM. Eventually, there will be over 7 months worth of inventory (6-7 months would constitute a healthy housing inventory). So then not only are there fewer qualified buyers, but there are more houses on the market to compete with.
Next you’ll start to see sellers offer things such as paying for closing costs, giving seller credits, and concessions being given out. Finally, you’ll see prices start to drop.
Since your market my be slowing down and interest rates are starting to climb you can market your property the same traditional ways. A sign in your front yard and listing in the MLS just isn’t gonna do it. You need to do something big. Get a banner posted on a hot air balloon that your house is for sale or something. It’s okay to be a little obnoxious if it gets people to turn there heads. It will not hurt your price but rather SHOUT to people that your property is for sale. I wouldn’t hesitate to organize a parade. But then again, that’s just me.
JMarc,
With no disrespect to anyone else, you don’t have to shout. You just have to make a tenant/buyer want your house more than any other. It doesn’t take me more than a week to find a tenant/buyer. The difference between your method and mine is that you are competing with all the sellers out there using traditional methods. Your buyers are forced to come up with a minimum of 10% and usually 20% down, and they must qualify for a loan. You’re probably dealing with realtors and brokers and possibly even attorneys.
What is most attractive to a buyer? How about:
No bank qualifying.
No credit qualifying.
No down payment.
How can you do that? Here’s what I tell them: I need someone to live in my land trust property, make the payments on time, and be responsible for maintenance and repairs on a 3-year, triple net lease. I want you to treat this house with love – as if it were your own. I ask for no down payment – you will only pay closing costs and 3 lease payments (two to be held in reserve).
There will be no bank or credit qualifying. If you agree to this and keep your end of the bargain, I’ll give you the house right now. How? When you sign the lease and pay the closing costs and lease payments, I will immediately assign you a 50% Beneficiary interest in my trust.
You will (although only leasing) acquire IMMEDIATE home ownership benefits and will be allowed by the IRS to write off the monthly mortgage interest payments and property taxes. You will also share in the future appreciation of the home on a 50/50 basis. At the end of three years, if you want to buy the property, you can do so at Fair Market Value. If you choose not to, there is no obligation or penalty. Everybody wins.
You worked hard to rehab that home, Marc. It’s an asset, and it should be properly managed. Make it work for you and make you some real money, don’t just sell it and pay capital gains taxes. Think outside the box and experience the psychological peace of homeownership, for such commodities as free maintenance , repairs, upkeep, management… and much higher rents – that YOU don’t even collect. How about a positive cash flow for 36 months with a nice lump sum at the end? And with complete protection against liens and encumbrances or marital dispute, bankruptcy, etc. You can also depreciate the property. I forgot to mention privacy. Your name won’t even be on title, but you are in complete control.
Best of luck to you.
Da Wiz
…OR you could let everyone in the world know your house is for sale and sell it.