Looking to sell a repossession house? Then read on….
The market for selling repossession houses for profit is growing as the economic crisis bites deeper into the public’s purse. Cheap houses are available to buy as the credit crunch sees repossessions rise in alarming numbers, and it is to the benefit of investors who know how to play the market to best effect.
Assuming one has taken the trouble to investigate the auction process to good effect, and that a successful purchase has been made, the following are some of the best tips we have found as to how to sell a repossession property for a good profit.
Using the margin
On average, houses can be bought at around 25% beneath market prices at auction. Given that one fifth of all housing sales are currently done at auction this presents a lot of potential property for the investor who is looking to sell repossession houses.
Assuming one has bought a decent property at three quarters of its standing market price, that gives a 25% margin to play with.
However, there will be expenses – we are assuming the purchase price includes commission and fees – incurred to bring the property up to marketable standard, and selling a repossession house is not simply a walk in the park
Plan to use at leas ten percent of the margin to improve the house; this amount is, of course, determined by the value of the house but should be adequate for the improvements needed.
Use it for the following: get the house decorated in plain colours; fit new carpets or laminate floors; put in a new bathroom suite – white, modern and tidy; if possible upgrade the kitchen, even by simply fitting new cupboard doors. Also, pay attention to the exterior of the house as new paintwork and cleaning up dirty windows, weeding the paths and keeping the lawn neatly cut all add to the first impression.
If you use even fifteen percent of the margin then you still have a potential ten percent profit margin left in hand.
Pitch your price right
The key to selling a repossession house – or any house – is in the pricing; with the current problems affecting the housing market everyone is looking for a bargain, and nobody is truly certain how prices stand. This can lead to uncertainty in pricing a product to sell.
Two things to remember are that pricing a property too high will put off potential viewers, while pitching it too low leads to offers under that price that are unacceptable.
If you are looking to sell your repossession house quickly it may be that you are willing to accept a lower than usual price, and this can be reflected in pitching it low to begin with, but with a no offers policy.
The advantage to the above is that the buyer knows you want to sell the repossession house for that price, and is well aware that if they make an offer at that level they will secure the property. However, it must be remembered that these are problematic times even for those selling repossession houses, and it may be some time before the right buyer comes along.
