I've had three clients in the last week ask me about selling their home. All three were ready to sign a listing contract that day and get their home on the market immediately. Unfortunately (and fortunately), since my goal is to always work for my clients' best interests, I'm not going to list any of the three for sale. Here is my first client's story:
Client #1 is an investor from California who has a rental property he's thinking about selling. The home is in decent shape, but not great shape, and is currently occupied by a long-term tenant. The seller is upside-down on cash flow by about $300 per month, has a fair amount of equity in the property, and wants to explore other opportunities for this money.
My advice: you're going to get beat up badly on your price. Not only is the home going to be more difficult to show than the comps, but once someone is able to see it they're not going to be particularly impressed. There are a lot of similar homes for sale in your neighborhood, covering a wide range of price and condition. In order to actually SELL your home, you're going to have to be at the very low end of the pricing – whoever buys your home will only do so if they believe they're getting value (and if the buyer is getting a great deal, the seller probably isn't.)
If your "other opportunity" stands to make you a substantial return on your investment, or if you don't mind selling at this "lower-than-desirable" price, let's do it. Otherwise, let's hold off until you're not at such a disadvantage. There may not be a right & wrong answer, per se, but as long as you know the true story, you're able to make a more informed decision.
Client #1 has decided to hold off for the time being.
- Chris Butterworth
[tags] home selling advice, investors, investment property [/tags]