Being in the world of real estate, you may need a crystal ball to know what is on the horizon. There are plenty of times when a situation is tossed into your lap completely out of the blue with unfamiliar circumstances. This is often the case with inherited properties. Dealing with an inherited property in Mount Prospect, IL can be one of the most difficult and time-consuming processes you can go through. Because of the many laws and red tape involved, an inherited property can take months before title changes hands. When it finally does you can be left with a property that hasn’t been updated in years and is in desperate need of maintenance. This puts you in the position of not knowing exactly what to do with the property to maximize the bottom line. Here are five of the biggest challenges to selling an inherited property that is suffering from deferred maintenance.
Short on Cash to Fix it Up:
In a perfect world we would all have access to unlimited capital and do whatever work is needed on the property. Unfortunately, this may not be the case. Money may be tied up in other properties, your line of credit may be maxed out, or you simply don’t have the money to do the work the property requires. Without enough money, you won’t be able to make the improvements desired which will leave you with limited selling options. There is little question that buyers almost universally want to buy a turn key property, unless they are getting a deep discount. If you don’t make improvements, it shrinks your buyer pool, and it will be reflected in the sales price. You can try finding capital through credit cards, private lenders or short-term partnerships but each of these options have drawbacks and will cut into your bottom line.
Expensive Monthly Costs:
One of the biggest issues with hanging onto the property for any period of time is the carrying costs. Every month you own the property you must cover the property taxes, insurance, utilities and a host of other expenses. By not selling right away you can quickly get behind the eight ball, which leads to hasty decisions. What may appear as a savings by not initially making improvements you potentially end up losing by carrying the property.
Selling A Fixer Upper:
Most often not having the capital to make improvements forces you to sell the property in as is condition. You essentially defer the maintenance and the improvements from you to the end buyer. This can be a problem for many reasons. As mentioned earlier, your buyer pool will instantly decrease. Most buyers don’t have the desire, or financial means to throw money into repairing a new home. Buyers are having a tough enough time coming up with any significant down payment let alone money for updating a property. This leaves you with a buyer pool of investors and buyers looking for a discount. It may appear that any profit you can get from an inherited property is a bonus but in reality, there are many fees and expenses that are associated that need to be paid. Moreover, if the inherited property does not have any equity your bottom line won’t be nearly as big as you may think. When having to sell as is you will most likely have to pick the best of potentially low cash offers.
No knowledge of the Local Market:
You can inherit a property from anyone, it doesn’t have to come from someone in your immediate family. It would be a bonus if the property is in an area, you know well. However, what if it is in another state? This will require a strategy and a knowledgeable team, regardless of what you want to do with the property. If you are fortunate enough to have the funds to fix the property that is great, but if you don’t use it wisely you could essentially be throwing money away. You need to make the right improvements for the market in Mount Prospect, IL to maximize the profit and sell quickly. Doing a little research online is helpful, but nothing replaces actual knowledge and first-hand experience in the market. Reach out to a few local real estate agents and contractors to help guide you through some options. It is always a good idea to talk to and get quotes from at least three of each before committing to anyone.
Extended Time Line to Sell:
Selling an inherited property in Mount Prospect, IL can be a long process, even if there is a will in place. By the time ownership is transferred you can easily feel drained and exhausted, in addition to having to wait another lengthy period to complete your improvements and wait for a buyer. Depending on the extent of the work needed on the property you may have two choices. The first is do all that is needed, regardless of the timeline, and waiting a month or two to get the work done. Keep in mind most buyers want their home to be clean, in good condition, and turn key. The second is to sell house fast and consider a cash offer. Depending on the circumstances surrounding the property, it can easily be a few months before you are able to sell the property.
If you’ve Inherited a property and would like to know more about your options and how we can help, contact us today!
