Hi, I'm a little out of my depths here and have a few questions.
Is it worthwhile to hire an agent to sell a property when the house is a tear down? Would most agents not want to work with this type of deal? Id like to list the property without taking photos of inside the house or having people walk through the actual house.
The house is under a reverse mortgage.. my father passed so now I have to sell. But I don't think the mortgage company was ever aware of the poor conditions the house has been in. Roof leak, termites, everything needs replaced, ac units don't work…. Will this upset them or cause issues with the mortgage company when they eventually see the listing?
Selling property for land value only
byu/pizzapicnic inRealEstate
Posted by pizzapicnic
5 Comments
Most agents will still work with teardown sales – its actually pretty common and some specialize in it. You can definitely list it as “land value only” or “sold as-is for lot value” without interior photos
The mortgage company shouldnt be surprised by condition issues, they deal with this stuff all the time with reverse mortgages. Just be upfront about selling as-is in your listing description. They mainly care about getting their money back from the sale
I’d still get an agent though – they know how to market land value sales and can help navigate the reverse mortgage payoff process which can get tricky. Worth the commission for the headache they’ll save you
I don’t see any reason you need to hide this from the lender. Is the house going to sell for more than the loan balance? They’re going to find out and get (partially or fully) repaid when you sell it. Presumably they already know something is going to happen if the borrower has passed, since that starts the clock on when the balance is due.
You are always most likely to get the best price by listing with an agent. Because you want as many buyers competing for it as possible.
The lender is insured against losses, so don’t worry about that.
But just like you want to hear from multiple potential buyers, you should talk to multiple potential listing agents as well. Interview at least 3. Have them estimate the sales price.
It will not sell for land value, just to be specific. It will sell for the land value minus demo costs, minus a margin for profit on the part of the buyer.
Try to find an agent with a lot of experience in an area. They will likely have a network of people who look for deals like this. BUT do not accept any offers without listing it. You can take it but say you need a couple weeks to review all offers.
Also another FYI for a place like this. A lot of buyers for properties like this will make you a nice offer up front, and post a small earnest money deposit. But right before closing, when you are basically thinking this is a done deal, they will find some problem and want a big discount. If you refuse, well, you only get the $1000 earnest money or whatever they posted (some may not even post that much). People often accept this because they just want it to be over. So when reviewing offers, insist on a decent earnest money down. That will indicate a buyer is serious, and compensate you if they pull any shenanigans. I’d want at least $5K. But people buying a place like this need cash, they have cash. So I might even accept a slightly lower offer that has a good earnest money deposit like say $10-20K. This depends on the house price though, don’t expect $20K EM on a $200K house.
This is nothing special to realtors. They have (almost certainly) done this in their career many times. Same with any sort of underwriting if someone buys it for development w/ a construction loan, etc. These transactions happen all the time, and everyone involved (should have…) has done many of these. Some may be more in-tune with the process than others, IE you call Steve, he says “Hey, I usually do condos, but my coworked on my team Brenda, she does land deals all the time, she’s working on 3 right now actually, here’s her number”.
Presumably The house has well and septic. That right there puts you above raw land value.