Tips For Buying A House At An Estate Sale
Buying a house is a huge step for anyone because it means that they now have an asset. The most unfortunate thing about the market right now is that there are lots of houses for sale but the price is too high for most people that want to purchase one. Naturally, that means that any person that wishes to get a house must look for one they can afford using any means.
One of the best ways to get a cheap house is to go to an estate sale. If you are in the business of selling houses or finding houses for clients, you can get a really good deal at an estate sale. You can get a house at a lower price and then flip it then sell it to other customers, enabling you to make a profit.
Why An Estate Sale?
An estate sale happens if there is property left behind by a deceased that did not leave a will or did not have any living beneficiaries. The property could also be claimed by creditors when an individual does not pay their debts. The creditors then arrange a sale through a party. Due to various facts, estate sales have reduced prices.
Here are some tips on how to buy a house at an estate sale.
- What is the ARV?
You need to purchase property that you can actually flip. Not all houses will have the after repair value (ARV) that you need to be able to make a profit. That means that you need to know the ways that you can assess the repairs and know its value. Keep in mind that this is determined majorly by your budget and whether you will be able to find a buyer at the price you want. You need to know the history of the house as well as the repairs necessary. Some houses may need too much in terms of renovation. That means that you may spend too much and have too much invested to make a profit.
Make sure that you weigh the options. If there is a high chance that it will sell for a profit after you have put your hard work into it, then purchase it. Otherwise, do not attempt a business idea that is too risky. You need to look out for things like pest infestations, fire damage, water damage, foundation damage, etc. Doing so will prevent you from purchasing a house that is doomed. It may cost too much to flip and that is a huge risk.
- Get The Paperwork Correct
Make sure that you get the deed that will ascertain that the house really belongs to you. The sale should go through a certified party so getting the deed to the property should be an accomplishable task. You can begin your work as soon as you receive confirmation that the house is now yours. Do not sign anything before reading the fine print. Make sure that you are aware of all the weaknesses and strengths of the place before you go to the sale. This will prevent you from making mistakes.
- Use Your Bargaining Power
If the price is not fixed, there are many possibilities open to you. If you really like the house and the price is a little higher, find out if the price is negotiable. This can get you the house that you need for a price you can afford. Bargaining may not be allowed at some properties especially if the executor is in charge of the sale. However, if they have decided to sell the place through an independent realtor then you can go ahead and negotiate with them.
- Have Your Facts Right And Money Ready
You need to know the facts of the place before you purchase it, This will not only help you when you are flipping it, but it may save you lots of money. Most court sold houses will need the buyer to have a certain percentage as a deposit. Make sure that you can pay this amount. Having the money ready will most likely put you ahead fo any other buyers that were interested.
You should be prepared to have competitors at the sale as well. If the house is a prime piece of land then you will be guaranteed a rival or two. The only way to stay ahead is to be prepared to pay more than the other person if you really believe the place is worth it.
- Remember, Be Patient
Some estate sales can take up to six months before they close. It is crucial that you are aware of the long process when getting into it. If you are ready for it then you won’t feel exhausted before it closes. Even after acquiring the house it may take longer than you anticipate due to issues like different executors that cannot be located easily. You need to make sure that you get the papers that show the place is now yours so that you can be able to start the renovations. Failure to do this will have you tangled in a very long legal process that will consume your capital.
- Do Not Get Overambitious
If you start to see signs that you cannot make the purchase, do not get overambitious. Leave the house to another person. This is because you may spend too much on the house then find that you are not left with enough for flipping. Remember the place has to attract buyers who can purchase it at the price you want. That means you have to put in as much effort into the renovations as you can.
- Make Inquiries
Do not be shy about asking for details about the house. If you need to know details about the house so that you can decide if it is worth it then you should be able to do so. This will let you have information about things such as whether the place was treated for mold, if there are any issues with the property lines, etc.
- Your House, Your Responsibility
You need to ensure that you are purchasing a place that you can actually renovate and not be bound by the rules. Flipping a house most times requires noticeable renovations. You can confirm from the right sources whether it is possible to make certain changes to the place without being stopped by associations or town codes.
Additional Tips
In order to make a lot of profit flipping houses that you have bought at estate sales, you need to have buyers. That means that you will have to get a network. You can find out which buyers are likely to buy the place after it has been flipped and have them in mind while doing the renovations. This will make sure that the house has a better chance of getting a buyer soon.
Check what permits you will need to do the repairs before you do the purchase. If the house is in another state then make sure that you know the state property tax laws. This will ensure that you do not end up with cases from the authorities or difficulties when renovating or selling the place.
Most estate sales are done by professionals so find out all you can about the rules regarding the sale. Do your research so that you will not be blindsided during the auction. You also need to be aware of the market value of the house before you bid on it so you know if this is a deal you can make money on.
