Distressed Home Q&A Recording - October 22nd, 2021

Distressed Home Q&A Recording – October 22, 2021

For your ease, we have provided a transcript of the Q&A Recording.

Hey, this is Evan with Meli. Meli is a home buyer, brokerage and consultant that focuses on working with people that have title issues, code violations, liens, judgments and things of that nature. We will work to solve whatever problems you have with your property that’s making it unable to be sold, and we’ll either buy the property from you or list the property, or do consulting just depending on your situation. Let’s go ahead and get into the Q&A.

1. What is a distressed property?

Everyone defines it differently. Some people would say a foreclosure is a distressed property. Others would say a property that needs a lot of repairs is a distressed property. We look at distressed properties that may have a lot of title issues, like foreclosure or liens. Our main focus could be a lien on the property that needs to be negotiated or isn’t going to go away. That’s how Meli looks at it as a company.

2. How can I sell a distressed property?

Depending on your situation, distressed properties are usually going to be bought by someone who is looking to purchase that property for cash. A retail buyer will typically not look to finance a distressed property. But, you can still list and sell a property in a lot of instances. But typically it’s still going to go to a cash buyer anyway. Rather than selling to a retail buyer, you’ll be selling to an investor.

3. What do you do at Meli?

We focus on working with people who have title issues. These include liens, judgments, probate, code violations, disputes between different parties, and things like that. We’ll work to solve those problems and then buy the property or help you get the property sold.

4. What are my options when selling my home with Meli?

So, you have a couple of different options. We can make you an offer on the property if we agree upon the price between both parties, then we will buy it. But if our offer is lower than what the seller wants, which can be very understandable, we can list that property for you and possibly net more money on it. We’ll fix the title issue, then sell your home to a retail buyer, who is going to pay a lot more than an investor will. Investors pay less because they are going to resell that property, and need to make money on it.

We need to be able to do both those things when someone comes to us with a title issue. Maybe you own a beautiful house, but it has a title issue. That’s very, very common. It has a lien or a judgment on it that just needs to be fixed, and then you should list the property. You don’t need to sell the property to an investor.

5. Are you a cash home buyer?

Yes, we are. But, we really focus on our niche of buying properties with title issues like liens, judgments, probate, code violations, things of that nature. That’s our focus, but we are a cash buyer and we definitely will buy properties for cash. It’s not always a title issue property, but that’s really what we focus on.

6. Is it possible to resolve my title issues?

Most title issues are resolvable. I would say 95% of all title issues are. Sometimes, though, the property isn’t worth it to resolve the title issue. That’s a potential problem. For example, let’s say there are 10 people on a title, the property is worth $50,000, and it’s going to cost $50,000 to fix the title issues. Then there’s no reason to even resolve it because no one’s going to make any money.

When this happens, many of those properties sell at the tax deed auction, and no one gets anything and it’s unfortunate. And you do see situations where you’re not going to make anything on it. If you fix it, you’ll probably lose money, so there’s no sense in doing that. But most of the time that’s not the case.

We’ve worked with people who thought their title issue was more expensive than it actually was. We ended up figuring out how to make a deal out of it by thinking outside the box. If you have a title issue, always check with multiple people and ask everyone’s opinions. Don’t just take the first opinion that you get if they’re telling you that it’s not possible.

7. Can I sell a house with a lien on it?

Yes, absolutely. We buy properties with liens on them. We’ll close with liens on them. A lot of times what we try to do is resolve those liens before we close, but that’s not always possible. And in those situations, we will still close.

It is very possible to close with a lien on your property, but it will always be an investor buying it. The bank will not buy homes with liens. That means a retail buyer with a mortgage from a bank will not close on a home with a lien. An investor will, but not that many. A lot of investors would not close with a lien on the property because of the risks involved.

8. Is selling a house without probate possible?

It can be. It’s very, very complicated, title-wise. I would say, probably 99% of the time, it’s not really possible. If you sold the house, you would sell a house that you don’t actually own yet. Typically you have to sell it for much less than it’s worth if it’s not actually in your name. So, I would never recommend trying to sell it that way. And, there’s not really anyone that will buy it.

Meli would look at it. But more than likely, we wouldn’t buy it either because you’d be selling us a house that, by law, you don’t actually own yet. It’s a tough one. I would just have to look at the property and see what was going on to see if it made sense for us to try to buy it that way. And I know a lot of other buyers would feel the same way. It’d be tough.

We would be buying it for very cheap because it’s possible we would never even actually own the property, which is kind of crazy to think about. But someone else could come along that was part of the probate and say, “Hey, I didn’t sell you this house. So I own some of the house now,” and they can go into the courts. If they can prove that by law, then they usually would own part, or all of the house. And now we’ve bought a house that we don’t own. It’s very complicated, so almost all the time, it’s really not possible.

9. Can I sell my house with a violation?

Yes, you can absolutely sell a house with a violation. It does depend if it’s a violation that’s become a lien or not. If it hasn’t become a lien, then it’s typically pretty easy to fix, assuming the code violation isn’t huge. If it’s a huge violation, then that could be a real problem. But most of them are pretty simple to fix. Maybe it’s just cutting a tree down or bringing something up to code. But, if it’s a significant structural issue or electrical issue, it could get very expensive. In that case, people are going to be hesitant about buying it.

But for the most part, many violations are small, like you didn’t cut your grass or you need to move an abandoned vehicle. In those scenarios, there are pretty easy fixes, then you can sell the house.

10. Is it possible to sell a hoarder’s house?

Yes, absolutely. There’s a few people that will buy them, us included. We have in the past, and we would consider buying them in the future. I would say typically, those houses sell for cheaper just because of all the stuff that’s in it. Plus, you don’t know what the actual problems are until you get all the stuff out of the house. There can be a lot of risk, and those houses typically sell cheaper.

You would probably get more money if you take 10 grand and pay someone to clear the house out. But, at the same time, maybe you clear the house out, you find out that a wall is falling in or something. It’s tough, but it is definitely possible to sell it as-is. People will buy it, for sure.

Read More: How to Sell a Hoarder’s House

Wrapping Up

Are there any other questions? I’m not seeing any, so thanks again. You can always give us a call at 407 305-5008 or go to MeliHomes.com. You’ll answer a couple of questions and put in your information. Then, we’ll reach out to you to see if we’re a good fit and if we can help you through your situation.

Meli is a home buyer, brokerage, and consultant, focusing on liens, probate, judgments, and code violations. Please feel free to give us a call or reach out, and we’ll see if we can help. Thank you very much.

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.