When Doing Owner Financing, How Much Repairs Need To Be Done?(m)
I know painting is necessary, cleaning cabinets, floors,refridg and stove, you the regular housekeeping. The people I bought the house from left worn areas in the carpet in the family room, they had started painting one of the bedrooms and got a splash of paint on the carpet. The carpet is really the only "damage" to the property. I really don't want to replace it myself. I'm having it shampooed tomorrow. How can I show the house and still get a buyer to buy where either they replace the carpet themselves? Worst case, I would use their money to replace the carpet, which would be ok, I just don't want to use my own money. How can I work this. What would you guys do? I have someone wanting to see the house tomorrow but I want to at least have it shampooed first.
Opinions, opinions please
quinn
Did you purchase the property Sub2? What was discussed and included in the purchase contract? If you expected things to be repaired, or projects completed, then it should have been negotiated, and included in the purchase contract
If this was a distressed sale, and you gave them a small amount of cash to relieve them of the burden the property was causing them, what would you realistically expect them to do?
I don't know how you do Sub2, but generally we list all of the problems with the property, and use those items as tools to reduce the price of the home, and show them how little equity they really have. That helps them understand why I can't give them more that a couple thousand as walking money. When we agree on the terms of the sale, My goal is to get them out. PERIOD. I will do what it takes to get the house ready to show, and sell.
Thanks Jeff, I know how sub-to work. I did however, buy from a sort of distressed homeowner. What I'm wondering is how much do we need to improve if we're making the buyers responsible for the property?
Replacing carpet can be really expensive. I'm wondering if I should still show the property after the carpet has been cleaned, inform all prospects that the carpet will be replaced in the rooms that need it before whomever buys move in, then use their money to replace.
Need opinions on handling this situation as I know the carpet sometimes can be an issue.
What do you guys think?
quinn
Regardless of the type of financing, even owner, there are only a couple of ways to sell the property, either "fixed" or "unfixed." If you choose fixed, then you need to fix the damage, in the case, the carpet. Is it possible to wait until a potential buyer makes an offer to do so? The answer is yes. However, it is unlikely that they will be willing to give you a deposit/downpayment before you install the carpet, so be prepared to shell out some money, even if it is only for a short term.
If you choose unfixed, then that means you aren't going to replace anything. Basically, what they see is what they get. Choosing this method means that you will have to reduce your price to sell the property, usually more so than what it would cost to actually replace the carpet because you will in essense be paying for the buyer's "hassle" of having to do it.
Roger
Thanks Raj, thats the answer I was looking for. Ok, we will be replacing the carpet, cuz, I aint lowering that price
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quinn
Quinn, not sure if you are aware, but you can sell your new owner financed note at closing for cash lump sum, rather than having recourse and becoming a servicer of notes.
Best, Dave
Quinn, not sure if you are aware, but you can sell your new owner financed note at closing for cash lump sum, rather than having recourse and becoming a servicer of notes.
Best, Dave
Quinn-
Both Home Depot and Lowes have a deferred payment for up to 6 months on purchases more than $300. You'll pay a little more, but you can get the carpet done w/o putting up any money, and then pay it off when the house sells.