How to Maximize Profits from Distressed Property Sales

Are you facing financial difficulties and looking to sell your distressed property quickly? Well, we know that distressed house sales can be tough, especially if it’s your first time doing it. So, we’re here to give you some advice. 

In this post, we want to highlight some of the necessary steps you should take in order to prepare the property for sale and maximize your profit. We’ll also cover various alternative sales options to help you decide how to make this sale as easy and smooth as possible. Shall we begin? 

What Is a Distressed Property?

First things first, do you know what distressed property is? Let’s quickly explain this term to make sure you’re dealing with this type of sale.

To put it in layman’s terms, distressed properties are those lacking financial and/or physical maintenance by the owner. There are different types of distressed properties:

• Properties in pre-foreclosure – the property owner has missed monthly mortgage payments and is therefore facing foreclosure.
• Foreclosed properties – the borrower can no longer fulfill their mortgage obligations. As a result, the lender seizes their property and puts it up for auction.
• Neglected properties – the property is in poor condition because of neglect and needs renovations and/or repairs.
• Abandoned properties –these properties are usually no longer in the original owner’s possession. On top of that, they are most likely run-down and in need of serious repair.

Factors Affecting the Value of Distressed Properties

Whenever you’re selling a property, you have to be mindful of all the things that can affect the price. There are multiple factors to consider and be aware of before setting a price. Here are the most important ones.

1. Location: You know the drill – location, location, location. In all real estate transactions, the location plays a major role in the property’s value. Properties in desirable areas with strong real estate markets will generally have higher values and vice versa.
2. Condition of the property: Properties that require extensive repairs or renovations will likely sell for less than those in good condition, as the buyer will have to invest extra money to get the property in good shape.
3. Market conditions: During a buyer's market, for example, there may be more competition for properties, leading to lower prices. Conversely, prices may be higher in a seller's market due to a lack of available properties.
4. Age of the property: Older properties may require more maintenance and repairs, which can negatively impact their value.
5. Competition: If there are many similar properties on the market, it can be harder to sell the property, and the price will likely be lower.
6. The cost of repairs and renovations: It’s simple – the more needed repairs, the less attractive the property is, thus driving down the price.

Preparing to Sell a Distressed Property

Before putting your house on the market, there are certain steps to take in order to improve your chances of attracting buyers and getting a good price. So, before going any further, you need to prepare your home for sale. Let’s see how you can do that. 

Assess the Condition of the Property

First of all, it's important to assess the property’s condition. This means evaluating the property's structural integrity, identifying any necessary repairs, and determining their cost. Having this information will help you set a realistic price and make informed decisions about whether to make repairs or sell the property as-is.

Cleaning and Repairs

A clean and decluttered property is always more appealing to buyers and can even increase the property's value. This may involve hiring a cleaning service, removing personal items or clutter, and making cosmetic improvements such as fresh paint and landscaping. 

And if, after the value assessment, you’ve decided to make some repairs or improvements, now is the time to do it. It’s the little things that can make a big difference when it comes to distressed house sales. 

Is the Price Right?

One of the most common mistakes when selling a home is either overestimating or underestimating the property. Setting the price properly is of crucial importance during a home sale. You should consider all the factors we mentioned above and come to an informed decision. Instead of eye-balling it, you can also do market research and see how much people are willing to pay for a distressed house. Having all this information will help you choose the right price and improve your chances of getting a good deal for your home.

How to Get More Money from Distressed Sales

Market the Property Effectively

A good marketing strategy is always the key to a successful sale, and the same is true when it comes to selling distressed property. By marketing the property effectively, you can attract potential buyers and increase the property's visibility. 

These are some of the strategies that have proven successful in the past: 

• Hiring a real estate agent
• Advertising the property on multiple online channels
• Hosting open houses
• Creating a virtual 360-degree tour of the property
• Highlighting all the unique features in the description
• Providing customers with detailed information about the house

Prepare for Negotiations

As a seller, you should be prepared for negotiations, as you may need to negotiate with potential buyers on the price, closing date, and any necessary repairs. You might need to come to terms with the fact that the buyers might offer you a lower price than the one you’d like. In that case, you need to come to a mutually satisfactory agreement. 

For starters, you need to understand the property's value clearly. It can also be helpful to work with a real estate agent or attorney who can provide guidance and support throughout the negotiation process.

Consider Alternative Sales Options

Instead of going the traditional route, there are other options available that might be better suited for your situation. Here are just a few examples of what you could do with your distressed property.

1. Wholesale: This means selling to a wholesaler, who then sells the property to an end buyer. The wholesaler acts as an intermediary between the seller and the end buyer and makes a profit by purchasing the property at a discount and selling it for a higher price. This can help you sell the house quicker, but usually at a lower price.
2. Selling to an investor: In this scenario, you sell directly to an investor or house flippers, who then either hold onto the property as a rental or flip it for a profit. Again, this is a quick solution, but you’ll get a lower price.
3. Short sale: In a short sale, the lender allows the borrower to sell the property for a smaller amount than the outstanding mortgage balance. This happens in cases when you’re no longer able to pay your mortgage payments, but the value of your property has declined. Eventually, you pay off the mortgage with the funds from the sale, but the lender comes up short because of the difference between the outstanding mortgage balance and the sale price.
4. Selling to SleeveUp Homes: If you want to sell your home quickly but still get a fair offer, then there’s one solution that won’t fail you – selling to SleeveUp Homes. We buy homes in all conditions and offer more money than other buyers. How does SleeveUp Homes work? It’s simple – you just request our cash offer, schedule a visit to the property, and then choose your ideal closing date. It’s the quickest, easiest, and most cost-effective solution for distressed property sales.

Get $10,000 More for Distressed Property – Get in Touch

Whether you’re selling a property that needs repairs, is underwater, or in foreclosure, SleeveUp Homes is at your service. We buy homes no matter the condition and guarantee $10,000 more than other buyers! When you work with us, there are no middlemen, commissions, or closing costs, and no repairs are needed. Also, you choose the closing date, so you could close in a week!

So, why wait? Request your cash offer today – selling distressed property has never been so easy.

Author:

Cesar Gomez , Broker /

Cesar has worked as a real estate agent and broker in the southern California region since 2013.

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