April 2020 | Meli Homes : Meli Homes

5 Mistakes Every Distressed Home Seller Should Avoid

Posted on April 30, 2020October 25, 2021 by Mark

If it’s your first time selling a distressed property, you’re likely to make a mistake or two during the process. Selling a distressed house is far different from conducting a traditional home sale.

These are some common mistakes every distressed home seller should avoid:

Pride Over Practicality

When you own a distressed property, it’s understandable to want to sell it for as much as possible. You need to pay your mortgage loan, taxes, or code violations and therefore you want to sell your property for as much as you can get. The most common mistake homeowners make when selling distressed is asking too much. Don’t set an unrealistic price for your home to try to get as much as you can. Homeowners who do this usually just prolong the sale process and will have to lower their asking price anyways.

Not Considering a Short Sale

The misconception around selling distressed property is astonishing. You typically have a few options and ultimately need to choose one. Some homeowners find foreclosure to be the better option. Be aware this option will damage your credit history significantly. Consider opting for a short sale or a cash sale and avoid foreclosure or excessive fines, as it will allow you to resume borrowing quicker than a foreclosure typically would.

Consult with a legal professional before deciding what option is best for you. There are different ramifications to each option, and you will want to make an informed decision.

Delaying the Sale

Defaulting on a mortgage generally leads to bank foreclosure, especially when you put off selling. Procrastination always leads to trouble, resulting in fewer options to avoid foreclosure. Selling your property quickly saves you from facing foreclosure.

Listing your home fast gives you more time to find a buyer offering a reasonable price, which is far better than a complete loss on your investment. Selling to an investor is typically a very fast process, and some investors can close on your house within a week, depending on the situation. Consider reaching out to an investor like Meli if you need to sell your home quickly to avoid foreclosure.

Selling By Owner

Selling distressed property is complicated, and we recommend hiring a real estate expert. This is especially true if you don’t know much about real estate. Real estate agents can provide valuable options in line with your specific situation. You can seek out a mortgage professional, lawyer, or a realtor who is experienced and skilled in short sale legal issues, like code violations or liens.

Making an Agreement with an Unqualified Buyer

When you can’t find a home buyer, you may opt to sell your property to an investor or house-flipper. These buyers usually purchase properties for less than market value. It’s important to ensure the property buyer is able to and will pay you in full for your property. Meli works with their own funds and a network of investors, so we’re always able to pay you in full if we get a home under contract.

Do You Own a Distressed Home?

Owning a distressed home doesn’t mean it’s the end of the world. Sellers are often stressed when attempting to sell a distressed home. That is why Meli provided some of the most common mistakes every distressed home seller should avoid. Most distressed homeowners have options. Take time to learn about your distressed housing situation, consult with a professional if you can, and if you determine that selling to an investor is the right choice, consider reaching out to Meli.

Our team is highly experienced in buying and selling homes, and we work with a partner network of attorneys, realtors, and investors to purchase your home in the shortest time possible. We’re able to buy homes in under 30 days, and can often buy in far less time as needed, depending on the situation. Give us a call at (407) 305-5008 or request an estimate on your home’s value below.

Want to learn more about selling distressed? Get our eBook, “Everything You Need to Know When Selling a Distressed or Difficult-to-Sell Home.”

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Meli encourages you to reach out to an advisor regarding your own situation. Please consult with your advisor when making legal or financial decisions.

Top 5 Strategies to Help Sell Your Distressed Home

Posted on April 15, 2020October 26, 2021 by Evan Shelley

Generally, a distressed property will stay on the market longer than a traditional real estate listing. Maybe you’ve spent thousands of dollars on advertising, made several price reductions, but you still can’t find a potential homebuyer. Figuring out how to sell your distressed home is tough.

Your property will become an expired listing after a certain period. This is the time when you shouldn’t give up and stay adhered to the axiom, “a stitch in time saves nine.” Devising a strategy to sell your home fast now can save you time, money, and stress later. Here are the five most viable options that can help you sell your distressed property as soon as possible.

1. Price it Right

It’s essential you determine how much your property is worth. Distressed homes usually list for lower prices than normal market rates. This doesn’t mean you need to reduce your listing price by thousands of dollars. With smart negotiation tactics, you can make enough of a profit to meet your debt balance.

The strategy is to price your home at a higher value than it’s worth. Let’s say you want to sell your distressed house for $200,000. If you list for that exact amount, the buyer will usually offer you less. Asking a higher price may swing the deal in your favor, as their offer will be closer to the amount you really want. However, this strategy may not work if you are selling in a buyer’s market; when there are more homes available to meet the demand. Conduct thorough research of distressed property prices in your neighborhood and set an appropriate price for your home.

Consider reaching out to a real estate agent if you haven’t already, or a real estate investor if you want or need to sell your home within a tight deadline. Learn more about selling with a realtor or selling to a real estate investor.

2. Make Repairs and Focus on the Best Aspects of Your Home

You might not be able to keep up with home maintenance due to your circumstances. Keep in mind that the typical buyer won’t want to buy a distressed house that requires numerous repairs. Therefore, you should put in the effort to conduct essential repairs to make your home a proper place to live. Create two lists, one comprised of the best features of your property, and one comprised of the worst features. Try to improve the worst features and draw attention to the best ones. This strategy may lead a potential buyer to pay you a higher price for your property.

A buyer will never want to pay your asking price if your property doesn’t have basic amenities. Your home should have a proper drainage system, good flooring, and good, safe electrical wiring. Try to repair all the worst features that can drastically affect your property value. If you’re unable to make repairs, take this into consideration when you decide your asking price.

3. Declutter Your Home

If your home is in extremely poor condition, repairs may take thousands of dollars. While you likely can’t invest a hefty amount in home repairs, you can try another trick to make it more appealing to buyers. Clean and declutter your home, mop, sweep, and vacuum the floor, wipe down kitchen cabinets, and improve your curb appeal. If you’re unable to do a deep-clean yourself, consider hiring a professional to do it for you.

Some homeowners forego cleaning the attic, basement, garage, and other less-frequented places. However, smart buyers will check these places. Deep clean every corner of your house to avoid turning off potential buyers. Ask any friends or family who have experience in home sales to get their advice. They can give you some insight into cleaning your home. A clean home will give potential homebuyers a better impression, even if your property lacks other basic facilities.

4. Consider a Short Sale

If you couldn’t keep up with your mortgage payments due to your tough financial situation, chances are you can’t afford to repair your property. In that case, you can submit a request to your lender to execute a short sale by accepting an amount that’s less than your mortgage balance.

Since negotiation requires skills and expertise, it’s best to hire a real estate agent for that. Discuss all the ramifications with them to make sure you clearly understand the consequences that can occur from a short sale. For instance, you may need to pay IRS taxes on a short sale.

5. Honesty is the Best Policy

When you’re selling your property, be honest with potential buyers. No matter what problems your house has, it’s crucial to disclose damage and other issues your property has. Be upfront about what is wrong.

If your area has commuting issues or sewage problems, ensure that the buyer is aware of any potential nuisances before signing the deal. When you don’t warn homebuyers about your property flaws, you could open yourself up to a lawsuit.

Do You Own a Distressed Home?

Owning a distressed home doesn’t mean it’s the end of the world. Most distressed homeowners have options. Take time to learn about your distressed housing situation, consult with a professional if you can, and if you determine that selling to an investor is the right choice, consider reaching out to Meli.

Want to learn more about selling distressed? Get our eBook, “Everything You Need to Know When Selling a Distressed or Difficult-to-Sell Home.”

What Makes a Home a Distressed Home?

Posted on April 1, 2020August 6, 2021 by Evan Shelley

When most people think of a distressed home, they tend to think of a run-down home with a poorly kept lawn and broken windows. In reality, there are several additional factors that can make a home distressed, most of which are not readily apparent.

To break it down, there’s a few major categories of problems a house can face that can earn it a “distressed” label. Many of these categories overlap, and some may come hand-in-hand.

Damaged Homes

The most commonly known distressed housing situation occurs when a home falls into disrepair. This can be due to a number of reasons, including neglect, damage from an accident, natural disasters, or even vandalism. Homeowners may be unable to fix the damages themselves, which can lead the home to being considered distressed.

Luckily, there are homebuyers who look for homes in need of repair. These buyers are often investors looking to buy a damaged home, “flip” it, and sell it for a profit once it’s move-in ready. There are even traditional homebuyers looking to buy a “fixer-upper” and work on their new project home. While it may be tougher to sell a home that’s fallen into disrepair, it isn’t impossible!

Homes Facing Financial Difficulties

Unfortunately, many homeowners will face financial troubles at some point or another. Many homeowners experience a major financial change in their lives that can cause them to miss mortgage payments, which can lead to the home entering pre-foreclosure, where the lender will begin the process of repossessing it. This is a stressful time for homeowners, and doesn’t leave much time to consider their options. Homeowners in pre-foreclosure DO have some options at their disposal, such as catching up on missed payments, selling the home in pre-foreclosure in a short sale, or selling to an investor.

Another problem many people face when they inherit a home is probate court. Probate is the legal process that occurs after someone dies. It helps ensure that directions in the will (if there is one) are followed. If there is no will, a judge will often have to step in and the probate court will work to value the estate, pay any taxes and debts, and find the best way to fairly distribute the property to any heirs. Probate isn’t always a “problem,” perse, but it can get tricky if the title is murky, there’s no will, or if the beneficiaries can’t post the probate bond or any fees or debts, the home can get “stuck in probate.”

Homes Trapped in Legal Issues

Another problem some homeowners face comes from the local and federal government. Some legal issues are tied in with financial issues, such as probate court. Other legal issues include code violations on the home, which usually incur a fine that accrues interest. If you cannot fix the problem that led to the code violation or pay the fee, you’ll have trouble selling your home to most buyers. Investors like Meli will often work with you to purchase your home if you’re looking to sell without bringing the house up to code, so consider an investor when you are weighing your options.

Heavily tied with a homeowner’s financial problems are tax liens and judgment liens. A tax lien is incurred when you fail to pay your property tax bill. The IRS will send you a “Notice and Demand for Payment,” and if you still fail to pay the bill you may receive a tax lien, which is public record and can drastically harm your credit scores.

A judgment lien usually comes from a legal proceeding in which one party takes another party, the defendant, to court in order to obtain a legal, monetary civil judgment against them. If the defendant is found guilty and can’t pay the damages, a judgment will be filed against them. A judgement creditor is able to seize their property or garnish wages to collect on the judgment depending on the state. If the creditor is aiming to seize property, the homeowners can consider selling their home quickly to an investor or through another quick selling process and pay off the judgment with the resulting funds.

Selling a Home in a Divorce Case

Divorce doesn’t always lead a home to become distressed, but in some divorce cases, the parties may either agree or disagree to sell the home, or just want to get rid of it as fast as possible for emotional or financial reasons.

Many couples who own a property together will attempt to sell their home when they separate in order to divide their assets. This can become difficult if one party doesn’t want to sell the home, but they need to find a way to split their assets. Couples in this situation should speak with their legal advisors before coming to a decision, as the legal issues involved with selling a home during a divorce can be difficult to navigate.

Selling an Inherited Home

Not all inherited homes are distressed, but as discussed during the topic of probate, it can get tricky if a home is entrusted to more than one person, if the title is murky, or if the home has any code violations, liens, or other financial or legal burdens. Dealing with these legal issues can be daunting, especially if the new homeowner is processing the grief of losing a loved one.

The homeowner may live in a different state, or even country, than the home, which can make selling even more difficult. Working with an agent may be the best move in this situation, but if it’s compounded with other issues, it may be best to reach out to a legal advisor or work with an investor who can navigate the legal and financial issues they’re facing.

Selling a Home Before Relocating

If a homeowner needs to relocate quickly, the home may be considered distressed, as the owner is likely very motivated to sell their home before they have to move. Selling a home typically takes a while, depending on your location, the price you’ve listed it at, your agent (if you have one), and so many other factors, your home could be on the market for as little as a day or could take years to find a buyer. If someone is moving, they likely want to sell it in under a month, if not faster.

Selling through traditional real estate never guarantees a fast sale, so if the homeowner needs to sell their distressed home fast, they can also consider selling to an investor. They won’t make as much as they would through a realtor, but they will be able to sell their home before they move.

Do You Own a Distressed Home?

Want to learn more about selling distressed? Get our eBook, “Everything You Need to Know When Selling a Distressed or Difficult-to-Sell Home.”