If you have been paying any attention to Stockton, Sacramento or Modesto real estate, then you know it is a sellers market, prices are up and that selling houses in any condition in Stockton has gotten a lot easier over the past several years.
It also means that the Conventional Wisdom about how to sell your house that needs work has changed as well. It used to be that sellers of less than perfect houses were either relegated to an ill fated listing on the MLS or as a pocket listing for a shrewd real estate agent that referred the house to a Stockton real estate investor. That always came at a high cost to the homeowner because the referral fee was an automatic 6% to 10% commission. Aside from the private rolodexes of a real estate agent, 10 years ago there were no directories for cash home buyers in print or online and there certainly was not a group of well known Stockton Cash Home Buyers that could easily be found aside from their We Buy Stockton Houses Signs dotting the roadways. While the signs are still there, so are the pioneers in the We Buy Houses Stockton market.
In today’s market, these houses are on front and center stage and any homeowner can just Google for assistance from any Stockton Cash home buyer. Real estate agents no longer have a stronghold on houses in Stockton that have suffered from years of neglect or deferred maintenance and if you own one of these homes please read on. It may save you thousands of dollars of your EQUITY.
Sellers are No Longer Isolated In Any Market at Any Price Point?
The evidence is in, the marketing and the sale of houses in every segment of the residential real estate market has changed forever. It really doesn’t matter where you are located, what the condition of your home or the price… buyers can find whatever they are looking for in any market from the comfort of their home on a computer, tablet or smartphone. Technology has leveled the playing field and for the first time ever, buyers and sellers have access to the same information that was previously exclusive to real estate agents.
What used to be a one size fits all world in real estate is quickly turning into a massive web of many mini residential real estate markets where what is driving the sale of any particular house is a targeted search and marketing directly to the buyers that are most likely to buy. It is happening so rapidly that local real estate agents are trying to keep up, but buyers and sellers within certain market segments are passing them by and in some cases virtually excluding them from the conversation.
Buyers are starting their searches earlier and they are finding houses without a real estate agent in tow. Homeowners, interested in selling, start their research long before they contact a real estate agent and many are actually forgoing hiring one at all. The independence that they are experiencing is monumental and the information available to all of them is unprecedented. Sellers are retaining more equity, and buyers are getting value. Some agents are worried that they are losing a seat at the table.
As a result, we have seen the increase in advertising from the National Association of Realtors (NAR) and locally real estate agents are battling for relevance when it comes to buying and selling homes. The message is loud and clear… “if you are looking to sell a house, you have a much better chance at doing so with the assistance of a real estate agent than trying it alone.” Since most houses are sold with the use of an agent, it becomes a moot point as the marketing campaigns from NAR appear to be highly effective at least in this regard.
“Sometimes I think that real estate marketing is better at selling the concept of using a real estate agent then is the marketing effort employed by the “average agent” to actually sell a house.” Peter Westbrook
But we can’t assume even for a moment that NAR and their advertising is accurate, because the statistics just don’t bear that out. These advertising campaigns would have you believe that the residential real estate market is a one size fits all proposition and that if you hire a real estate agent for the prettiest house on the block or the ugliest the results are going to be similar. That is just not the case. Real estate agents have never been able to address 100% of the market and unfortunately, most consumers and I believe, even the rank and file residential real estate agents do not understand how the real numbers add up.
The numbers say that residential real estate agents have adequately represented only 62% of the market over the past 10 years. What that means is that for every 100 listings represented by a real estate agent, 62% get sold within the timeframe of the original listing agreement (the average listing agreement is now 6 months). What that also means is that the remaining 38% of all real estate listings expire without ever seeing an accepted offer. That number is never published and I think it is part of the problem and why most sellers just don’t have all of the facts.
In Stockton, where there are 3563 real estate agents, it only stands to reason that only a handful are going to be able to perform at the highest level. When you consider that 87% of all agents wash out within their first 5 years, it makes you wonder even more whether the claims of the NAR are really accurate and what impact it has on you selling your house in Stockton. You would think that with all of the new fangled technology and marketing, that selling with the help of an agent would at least yield a higher sales price.
Not so, says a study by Bernheim & Meers. What they found was that agents actually had a negative effect on sale price when homes were given the same type of marketing. Homes selling with an agent actually sold for 5.9 to 7.7 percent less than similar homes if both were entered into the MLS (Multiple Listing Service).
So what are homeowners supposed to do? It is a bit of a catch 22 because the houses in the study were not distressed. Add that to the equation and the seller has to begin to question whether the house that needs a lot of work is going sell with a big enough margin to justify the agents 6% commission? Remember the research indicates that selling with an agent has advantages such as selling faster, handling logistics and communication, and offering resources and recommendations.
But if, as the research suggests, they end up getting a lower sale price, the seller could be paying up to 13% of their home’s value (your EQUITY) by hiring one. Otherwise your house will be one of the nearly 40% that just linger, because most real estate agents dont know how to sell houses that need work and the number one priority when selling any house should be about protecting the homeowners equity. Figuring that out on the fly may prove costly and may cause you to incur more more cost and liabilities than you had hoped for and that is the rub and the risk.
So, back to the question “How to Sell a House That Needs Work in Stockton”?
The simple truth is that not all houses are created equal and a one size fits all marketing approach is not going to change the buying patterns of people currently looking for houses. Study after study reveals the true numbers. Houses are like any other product.
If you want to sell a house that needs a lot of work, than you better identify the market or the profile of the buyers best suited to buy the house as it sits right now. You need to know what your house is worth before you put any additional money into it so you understand the cost basis. Peter Westbrook
What makes houses different than other products is that they are generally not disposable after one or more uses. You really never see an advertisement for a house that says “slightly used”. Although I may start using it myself on houses that I sell. Instead, houses that need work are described as “fixer uppers” or “handyman specials”. They emphasize that the house needs work and that both the seller and buyer are aware of that fact.
All to often I watch homeowners take one of two paths following the old real estate agent best practices guide for selling a house of which neither preserves their equity.
- spend tens of thousands of dollars trying to fix and update the houses in hopes of chasing the top of the market or
- hire the first real estate agent they talk to and sell the house as is but in the process hand over an ungodly amount of their equity in commissions for absolutely no reason whatsoever
The one size fits all marketing approach is dead and yet the conventional wisdom of the day from most real estate agents is that knee jerk reaction to hire a real estate agent. The problem is that most sellers just dont know that they have the option to sell the house as is to a cash home buyer and pay no commission whatsoever.
As a result many people hang on to a house that needs work because they don’t have the time or money to fix it. This inevitably costs more money in the long run, not to mention the stress and hassles that come from owning a run-down house.
There are many people out there who will buy your house for a great price, freeing you from the property and the burden of making repairs. The strategy of selling to a local real estate investor is as mainstream as using a real estate agent but, without the Gamble. By selling you house to a We Buy Houses Stockton real estate investor, everything is known upfront.
- How Much (the sales Price)
- No Inspections
- No Contingencies
- No Appraisals
- No Repairs or updates
- No Cleaning up
- No Buyer concessions or credits
- No Banks
- No Warranties
- No Closing Cost
- The Date that you sell
It really is that simple.
How to Sell a House That Needs Work in Stockton
Get Your House in Front of Serious Stockton Cash Home Buyers & Investors
You can do this by Googling the following…
- We Buy Houses Stockton
- Who Buys Houses Stockton or
- Sell My house Fast Stockton
- Buy My House Stockton
- Cash for Houses Stockton
- Stockton Cash Home Buyers
If you do, the offers from buyers with Cash in hand will come and you could be sitting at the title company within one week. There is no need to put a sign in the front yard. No open houses. Just you the Stockton Cash Home buyer and the title company. No commission and no real estate agents to bring along. As the seller interview ans many cash home buyers as will come and run the numbers yourself and you’ll see what it will cost to repair vs. the value of the home when it is complete. Being able to understand the value of your house is very important when selling a fixer-upper to anyone.
That will also indicate the amount of equity that you will be saving by not gambling on a traditional sale.
No Need to Fix Anything
Houses that have suffered years of deferred maintenance are not going to see a bump in value if you replace a broken glass pane in an old aluminum framed window. Likewise if you replace the broken garage door, and yet the frame holding it is broken from the lastest break-in or has termite damage or dry rot, your efforts are not going to be rewarded. Many times I see homeowners trying to fix and clean things that they can handle out of a sense of obligation or pride, only to see them waste time and money that will never be recouped at the sale.
Repairing holes in the walls, cleaning the carpets and adding new fixtures are NOT great ways to add value. If you are going that route, fix the entire house because at some point cosmetic patches are not going to hide the underlying flaws that will come out in an inspection. After 11 years of buying houses I can see through walls and feel what is wrong just by walking through a house. We DON’T recommend repairing the roof and cleaning up the yard. Curb appeal doesn’t matter (unless you are trying to avert code enforcement) as Stockton cash house buyers perception of the home is NOT based on a neat and tidy yard. That impression is going to fade quickly when viewing the rest of the house!
While you want to play up the good, you also need to be 100% honest about what is wrong with the house. By disclosing everything you know, you can address it head-on. While I do NOT order inspections, I can’t speak for anyone else that buys houses. Like I said, I am NOT going to ask for disclosures and I DON’T care what is wrong. But for the rest of the House Buying universe, you don’t want to set yourself up for a lawsuit by concealing a potentially deal-breaking fact about the property.
Call For Offers and Wait
One strategy that many people use is to call for offers for a specific date and wait. Let it be known that you are widely advertising the property, and that you will be taking any and all offers into consideration. This will create a sense of urgency and will potentially pit multiple investors against one another in a battle for your home. Don’t be surprised if you dont see a lot of pricing variation. I am a real estate investor not a speculator. My formula is simple. All Cash Offer. Fair Market Value Minus the Cost of Repairs and Holing Cost.
Sometimes the only Solution is to Sell the House As Is.
Houses come in all shapes and sizes with different kinds of issues that determine its actual condition. Buyers are skittish and if they perceive a problem, they walk. Real Estate Agents are no different and they have vastly different levels of experience with different types of houses. The truth is that most real estate agents have no experience in selling distressed houses .
Here is another fact… Unless your house is in move-in, near-perfect condition and is priced right, the average buyer is going to pass. The truth is that 98% of all buyers are looking to buy houses that are move-in ready, that need no repairs or updates, which is also evidenced by the fact that over 98% of all buyers order home inspections and expect the seller to pay for the repairs.
If you have a house with any problems whatsoever, what are the chances that you are really going to pull a fast one on the buyer, the inspectors, and finally the bank?
So in a world where the “normal” Stockton Home Buyers are looking for move in ready and sellers are looking to cash out, the only thing that they have in common is a real estate agent that is trying the best they can to match things up and as the above statistics point out, it works only 60% of the time.