Distressed Home Q&A Recording – October 16th, 2020
For your ease, we have provided a transcript of the Distressed Home Q&A Recording.
Hey, this is Evan with Simple Sale Central Florida. We’re back again this month for our October Q&A. Covering questions that we commonly hear with clients that we work with throughout Central Florida.
Simple Sale Central Florida is a distressed home buyer. Distressed homes typically mean foreclosures, legal issues, excessive repairs – properties that need to be sold very, very quickly for whatever reason. That really defines the residential distressed industry.
We work in places like Orlando, Tampa, Titusville, Melbourne. Orange County, Hillsborough, Brevard, Pinellas, Osceola, Seminole County, Volusia. Many, many counties throughout Central Florida. We’re also looking at the Gainesville area to start buying properties there as well. Let’s get started with the questions.
1. I got stuck in a contract with another company and now they’re offering me way less than before, what can I do?
This is pretty common in the industry. A company will offer you what you’re asking for the property, whatever it may be. Let’s say it’s $100,000. They’ll get you into the contract, move forward and make you feel comfortable that the deal will close. At some point before closing, sometimes a day or days before closing, they’ll request reductions or what they call credits. They’ll say “oh, I didn’t know the roof was that way” or whatever, and they’ll request a credit. Those credits can be anywhere from $2,000 to $10,000 to $20,000.
As a seller, you’re emotionally and financially involved in the process, possibly trying to plan your life out. A lot of times those tactics work because someone is dedicated to closing. They want to move on with their life and just get rid of this distressed property, this stressful situation.
In that situation what you can do – hopefully, first off, the buyer has a deposit down, so you should have the right to that deposit. If they’re trying to offer you less and they’re not willing to close, you should have the right to that deposit. You should also contact the title company and tell them that this transaction is not going to happen because they’re changing the offer price. Tell them that you’re wanting to cancel the contract.
Because you’re telling the buyer you don’t want to close now, things could get pretty hostile, I would contact the title company directly. I’d possibly have a lawyer call the buyer and the title company and show them you’re serious. You’re not taking less for your property than what you agreed to. You went through an inspection period and everything checked out and now they want to change the offer price for reasons that should have been mentioned during the inspection period.
At that point it can become a legal issue and they can threaten to put liens on your property or what they call memorandums, but you’re in the right. You’re not in the wrong. The buyer may try to make you feel like you’re in the wrong but you’re not. It isn’t your fault, it’s just a tactic that companies in this industry use and they do it on purpose, unfortunately.
2. The foreclosure moratorium is the only thing keeping me in my home. What can I do when it’s over and I’m still behind on payments?
The moratorium ended for a small percentage of people that have private mortgages on their properties. We haven’t talked with any of those people to see how those foreclosures are coming along or if any foreclosures have been filed. I personally don’t know any sellers or have had any clients like that.
It really depends on your situation and how much you owe on the property. Let’s say the property is worth $100,000 and you owe $100,000, and you’re going to walk away with nothing. Depending upon your situation, if you’re already in foreclosure and someone offers you the money to get out, it seems like a logical conclusion to go ahead and take that offer, but there are options outside of that. You can try to re-negotiate with the bank. Those processes can be difficult, but it’s possible that they would negotiate with you to see if you could get a lower payment or if they can give you an extension of, you know, 69 days. You can start those dialogues, because if you really need to stay in that home for whatever reason, there are other options than just selling.
If you are just trying to get out of it and you can get out of the foreclosure without it hurting your credit, that may be your best option. But it really, really just depends. It’s also possible for you to have someone take over your mortgage and make the payments and take possession of the property and make your payments for you. You move on with your life, assuming you don’t want to buy another property with a mortgage. They’ll clear up the foreclosure and continue making the payments.
In those situations, a lot of times investors will pay the mortgage payment and rent out the property. They’ll pay down the mortgage over time – over 5, 10, 20 years. Eventually that mortgage will get paid off and you can move on with your life without having to worry about it anymore because the person or investor has an obligation to continue paying that.
I think I answered that one pretty well, but it’s a situation-by-situation basis. If you want more information, just reach out on the website simplesalecentralflorida.com. We can evaluate your situation and better understand what you’re working with. The principal owed, how far behind you are on payments, things of that nature really matter. You could also consult with a lawyer, that’s another option. They could really understand your situation and point you in the right direction.
3. Will my house be worth more if I take care of the legal issues myself??
Absolutely. The legal issues on a property can mean big, big differences in what it’s worth. If you have what they call a broken chain of title, the house essentially can’t be sold. If it is sold, then the person that’s buying it from you isn’t actually taking full interest in the property. They’re probably buying some less than 100% interest in the property and they don’t even know it. When you take care of those legal issues yourself, the property will most likely be worth more.
In our experience, legal issues can start as simple as $300. We have one property right now that we’ve been working on since May 2019 and it’s closer to $10,000 in legal bills. It’s not finished, but we should be this month or next. So $300 all the way up to $10,000+ in legal bills.
If you have the money and a lawyer you trust, it will definitely increase the value of your property by more than what you pay. That’s something to keep in mind. It’s all about having the legal team there that you trust to get the legal issue resolved. Also having the money and the patience to be able to deal with it because legal issues can take anywhere from a few days to years. The one we’re working on right now we’ve been filed in the courts for 10 months or so. It can take a long time.
4. Is there any way I can sell my distressed home using a realtor?
Yes, you can, it’s possible. Typically, realtors or agents have a hard time understanding the situation because they aren’t investors. They may try to sell your property for less than what it’s worth, over-price it, or give you advice on that specific situation that isn’t necessarily accurate. I’m not saying they’re lying to you or they’re uninformed. Realtors are very well-informed and most agents are very well-informed, they just haven’t seen those problems before.
For example, you may have a legal issue and they’re pointing in directions that aren’t the most efficient. That’s not always the case and you can totally sell your distressed home that way. I would try to find someone who’s an agent and an investor that can deal with those issues. Someone who knows those issues and can clear them up and put it on the open market, like an MLS, so you get the money you deserve for the property.
5. Should I shop around when I’m looking to sell my home?
Absolutely. Some clients reach out to us and ask us questions like “Are there other people that do this?” or “Are there other companies?” Or they say “I’m actively looking at other companies.” We highly recommend you talk to other companies. Get to know them, their process, and their goals. What’s their mission when working with their clients? Having more than one point of reference on the homebuyer industry will give you a good idea of what companies serve their clients well and what companies don’t.
I think it will become apparent very quickly which companies really care about their clients and which ones are just saying or doing anything to get you into a contract to try to manipulate you in order for them to have personal gain. Unfortunately, it’s part of the industry, but you should always look at more than one company. It will give you a point of reference on which company is the best and which one you should work with.
6. How does selling my house to Simple Sale Work?
This is what we call the 3 Simple Steps. Step 1, you get an estimate on your property. After discussing the estimate via phone we will come view the property to confirm the estimate. That’s step 2, doing a walk-through. Step 3 is making you an official offer on the property, typically same-day, possibly in person, we’ll make that offer and then move forward with a contract.
1: Giving you an estimate on your property via phone and reviewing it online
2: A walk-through of the property to confirm the estimate
3: Getting an offer on your property
In some situations we would give you our estimate and then confirm our offer without a walk-through, but in most situations we would still walk through the property to confirm the offer.
7. How much work is it for me to sell you my home?
We get this question a lot. If you look at some of our reviews, you’ll see clients mention how little time they spent on the actual process because we try to make it as simple as possible. We really want you to do as little as possible, so we handle all the steps and processes that come with clearing title. Working with the title companies and conveying the title. We absolutely do not charge fees for giving you an estimate or an offer. No fees for walk-through, nothing. We do not charge fees for anything like that.
To fully answer the question, we try to make it as little work as possible. We shouldn’t have much more than a few conversations on the phone, a walk-through, and then signing a contract and a deed on close. There really shouldn’t be much more than that. If there is anything more than that, it may be because there’s legal issues, but we would handle most of those and explain what’s going on as we’re handling those problems.
8. Are there any good resources to find more information on distressed homes?
I think as a company we do have a lot of information on our website, simplesalecentralflorida.com. We have a lot of articles written that explain questions like:
- What is a distressed property?
- What does a distressed home look like?
- How to deal with tax liens?
- What are tax liens?
- How to sell your house with tax liens?
- What to do with a property with excessive repairs?
- How to sell your house as-is?
All types of articles that help explain how the process works and how to do it yourself without working with someone like Simple Sale Central Florida or another homebuyer. That’s one option. You can also search on Google for more information. For example, if you have a tax lien on your property, Googling “what people do when they have a tax lien on their property.”
One good website for really deep information is biggerpockets.com. It’s mostly real estate investors, but there are sellers learning about what’s going on with their property from investors. There are a lot of articles and opinions on certain aspects of distressed home sales. That’s a great reference but you can Google it and try to find a reputable source like our website, biggerpockets.com or an attorney’s website with blogs or information. Those three would be good references but there isn’t any one source in particular that I would recommend.
I think that is it for today for our Q&A. If there are any other questions you can put them in the comments now. I don’t see any, if there aren’t any questions that come up in the next few seconds, I’m going to go ahead and conclude here.
We are Simple Sale Central Florida, we buy distressed properties throughout Central Florida. Our main goal is to bring transparency and accountability to distressed home sales. That really means that we’re accountable for what we do, we’re very transparent about the process and we try to work with our clients to give them the best experience possible in a situation that’s very stressful. That’s our goal and that’s what we strive to do.
Give us a call any time at 407-338-4183 or you can visit our website, simplesalecentralflorida.com, and we will typically get back to you within a few minutes after you’ve filled out the form. We’d love to answer any questions you have about your property. If that is it, thank you all for viewing and we will be back next month with another Q&A. Thank you.