We were thrown a bit of a curve ball in the quest to sell our rental property.
The entire Beatles family met with the realtors at our rental property. It was the first time we had been inside the house in over two years.
Things have changed.
The house shows the wear and tear of family living. Our once pristine walls are scuffed and dinged. The carpet shows considerable wear from what we assume to be visitors who didn’t remove their shoes, and there is an overwhelming aroma of animals.
It was especially tough for Mrs. Beatles, who fondly remembers our past in the house. Birthdays, Christmases, and even the quiet nights, all reduced to a memory difficult to recall through the unkemptness that surrounded us.
I found it to be a perfect metaphor for our financial situation. Mrs. Beatles didn’t appreciate the comparison. I don’t blame her.
Meeting the Realtor
We chose our realtor due to his tight-knit relationship with investors in our community.
His connections with buyers who have access to cash on demand could, in theory, give us an upper hand to sell the property in half the time.
After a quick inspection he noted:
- The carpets need to be replaced
- Walls need to be painted
- Basement was dry but could use an extra layer sealant
- Tile grout needs to be whitened
- The roof needs to be replaced
Not a terrible list, though it would cost upwards of $8,000 to do it all.
He then explained our options:
- Move the tenant out, Repair the items he noted, Market toward first time home buyers and aim to sell nearly $90k mark.
- Keep the tenant in the home and sell the home as it sits right now. Market toward investors who want quick cash flow, and hope to sell around $75k to $80k.
That’s a $10k to $15k difference but would cost significant capital to get there.
And then came the curve ball
We shook hands and told the realtor we would get back with him later on in the day.
In our minds we had already decided to sell the house without improvements, choosing to market it towards investors.
And then came the curve ball.
As we packed up, our tenant asked to speak with us. They notified us that they are working on a plan to purchase the home, but would need a week or two to know if it is feasible.
This opened up a world of other possibilities.
- The tenants love the home and their family is already settled in. They would likely be willing to pay the asking price for the property.
- If we sell to our tenants, we would save around $5,400 in realtor fees.
- We would save $8,000 in upgrades that the home will eventually (probably soon) need.
This is highly tempting and now we are left wondering what to do.+
Listing immediately would be potentially throwing away $5,400 (If we list, then even if the tenant purchases the home, the realtor will receive their commission).
On the other hand, we need cash and we need it fast. For the next day or two we are going to keep the realtor waiting as we ponder our options.
We are actively seeking advice, so if you have any, feel free to comment below.