As a homeowner in Indianapolis, when it’s time to sell you have many options available to you. You can go the traditional route and list your house with a realtor or you can sell your house direct. When considering which option is right for you, it’s important to take some time to really consider your situation and what you hope to achieve.
Two things you need consider when it comes time to sell your Indianapolis house is the overall condition of the home and how much time you have to sell it.
You know the old saying, “time is money,” and in real estate that saying can’t be more true. Every day you hold onto that unwanted house it costs you money. If you have a mortgage, it will cost you interest on the loan. Utilities, property taxes and wear and tear in general will quickly drain the equity from your home. If you are fortunate enough to own your house free and clear, it’s in move-in ready condition and time is on your side, then perhaps using the MLS is an option.
Selling your house on the MLS is not that fastest option. It could take months to find the right buyer and close, longer if the condition of your house is in less than move-in ready condition. Some additional efforts will be required of you if you decide to sell your house on the MLS rather than selling your house direct to a real estate investor. First, you will need to get your house in show ready condition. This means no clutter and a well staged house. This will make the photographs turn out better and make a better first impression for potential buyers. If you’ve been putting off any major repairs or updates, now’s the time to invest some addition money to ensure your house sells quickly. In most cases, you won’t get back all the money you have to invest in repairs or updates. If you have to replace your heating and cooling equipment, replace the roof or paint the exteriors of your home, you will likely only get about 50% or those dollars back. Investing in a new kitchen and bathrooms yield a slight greater return of invested dollars, approximately 80%. But making these improvements isn’t about making a profit as much as it is about getting the house sold quickly. If you are considering doing the work yourself, remember that a bad remodel is worse than no remodel at all. So if your not a pro, go find one.
Now that all the work getting your house ready is complete, it’s time to list it on the MLS. You can hire a real estate broker to prepare and market the listing as well as coordinate showings and support negotiations but it comes with a hefty price. Brokers typically charge 6% to 7% commission for their services. For a typical house that could cost you upwards of $18,000.
Or you could ask a broker to simple prepare the listing for you and put it on the MLS. They usually charge a fee for this services and not all brokers will do this. But it would save you a ton of money if you can successfully navigate the real estate market. It helps if you’ve bought and sold a few houses already and know the process. If this is your first time, you could end up loosing more money than what it would cost to hire a broker. Either you will leave money on the table but listing it below its potential or fumble negotiations both with purchase price and inspection repairs.
Showings can be a bit of an inconvenience. Fist you have to keep your house in show-ready condition. And if your are like me with two children, it’s a very tiring experience. Yes, that means having to make your bed everyday! Second, you will need to vacate your house for one to two hours at a time. And it will inevitably be a time when you have free time and are ready to relax; because that’s when buyers have the time to go take a look. Pet’s can add another level of complexity when it comes to arranging showings. If you are handling the listing yourself, coordinating these showing will fall on your shoulders.
Depending on how quickly your house sells, it could take just a few showings or it drag out for months. That’s a long time to keep a perfect house. Even with houses that are in move-in ready condition, it’s not uncommon for a house to get 15 to 20 showings to find the right buyer.
Preparing for the close.
Now that you found the buyer and negotiated an acceptable sale price, it will take another 45 days for the buyer to be ready to close. Most houses are financed, unless you are lucky enough to find a cash buyer that can bypass the banks. During this period of time, buyers will have the house inspected for defects as well as have an appraisal prepared to satisfy financing requirements. Be prepared to make repairs. Regardless of the age of the home, inspectors will find something or many things wrong with your house. This is their job and they need justify their fee. We’ve seen inspectors find defects in houses as young as 2 years old.
Once you have found your buyer the clock for move-out begins ticking. You have 45 days to address inspection items, pack up and move out. If you already have a place picked out you are in luck. If not, it will be a scramble to find your next home. Remember, it usually takes 45 days to close. Closings can happen faster but 45 days is the average. Unless you find a house the same day you sign a purchase agreement on your existing house there will be a gap. The last thing you want is to have to rent for a short period of time. Note: short term rentals are hard to come by. Most landlords will want you to sign at least a one year lease. For some this won’t be a problem but having to move twice is no fun.
One of the benefits of selling your Indianapolis house direct to a real estate investor for cash like Ittenbach Capital is that you get to pick the move-out date. This will give you plenty of time to make sure your next house is exactly what you want without all the stress.
Summary of expenses when selling your house on the MLS
- Commissions – When working with a real estate agent in Indianapolis, you can expect to spend 6% to 7% of your final sale price in broker commissions. While this is worth it for some properties, for many others saving this money is the better option.
- Closing Costs – As a seller, you can expect to pay 1-3% in closing costs for the sale of your Indianapolis house. These costs typically cover recording fees, title insurance and property tax prorations as well as the fees the title company charges to prepare and facilitate the closing.
This is another benefit of selling your house direct to a real estate investor. You can skip the cost of closing and commissions. When we buy houses for cash in Indianapolis there are never any out-of-pocket costs or other expenses. We take care of all these fees for you.
Getting real about the condition of your house.
Now it’s time to get real about the condition of your home. We’ve talked at length about the time and effort required to list your house with a real estate broker and the MLS. Now let’s discuss the condition of your home. From a buyers perspective, there is no perfect home, expect perhaps building a new house. Even if your house is in move-in ready condition, your new buyer will want or need to do something to the house to better fit their needs and preferences. This will affect your sales price somewhat.
But what if your house is in less than move-in ready condition, if there are major repairs needed or on the near horizon if will take longer to find a buyer and your sales price will be considerably lower. For a professional real estate investor like Ittenbach Capital, buying houses that need a little TLC or even a major remodel is commonplace. There’s nothing we haven’t seen before and are not faint of heart. But for the average home buyer, the prospect of a major renovation can be very intimidating.
Many home buyers won’t possess the knowledge, expertises or vision to feel comfortable taking on such a project. Then there’s the expense. Most homebuyers stretch to get into a house and have very little additional funds necessary to finance the work needed. Additionally, most home buyers don’t want to live in a construction zone for six month either.
Real estate cash buyers have all knowledge, expertise and capital required and can get the projected completed 30% to 30% cheaper than the average home owner as they do this type of work every day.
Let’s discuss house inspections a little further. Home buyers will ask and expect you the seller to address defects before closing. Some repairs are easier to solve than others. It’s usually the big ticket items that cause a deal to fall apart. Some of the more common defects we see a lot of are compromised roofs, heating and cooling equipment that are near or beyond their useful lives.
Foundation problems and water penetration into crawl spaces and basements can be costly. If your house has a block foundation, you can bet an inspector will find water penetration somewhere. This is usually the result of negative grade, low spots in the surrounding terrain where water can collect. Or your house could be in an area with a high water table.
If your house is older, usual built between 1900 and 1925 it’s likely that your foundation is brick. It’s very common that sections of this type of foundation will need to be rebuilt from the ground up do to degradation over time. You can expect to pay $1,000 to $1,500 per linear foot of wall to built up to 8 ft in height. A five foot section of brick wall could cost you between $8,000 and $10,000 to repair…yikes!
Summary of Repairs and Expenses – These costs can vary widely and depend on the age of the home and your reinvestment in maintaining and updating the home during your residency.
- Painting and carpeting a typical sized house will cost you between $8,000 and $10,000.
- A new roof can run upwards of $12,00 to $15,000.
- Reconditioning a worn out deck can cost between $2,500 and $6,000.
- A new HVAC system can run you $5,000 to $8,000 depending on the size of your house and if you have to replace both the furnace and the air conditioner.
- Kitchen and bathroom remodels are typically the most expensive. Kitchen remodels can cost between $10,000 and $20,000 depending on your choice of materials and finishes. If you do decide to tackle the kitchen or bathrooms, don’t go cheap. If it doesn’t look good it will cost you a lot at the negotiating table as the new owners will need to redo the remodel.
When it comes down to it, sellers have choices when selling their houses in Indianapolis. For some owners, a traditional property listing will work. However, as we’ve discussed so far, the process can be expensive and cumbersome. It’s important to take an honest look at your property as well as investigating your local real estate market. For many homeowners, avoiding the MLS can really pay off! Below is a summary of a few of the reasons why you may be better off selling your house direct to a real estate investor for cash.
Save Money
Listing your house on the MLS in Indianapolis can cost a small fortune. Adding up all of the costs, you may find that listing your house on the MLS and with a broker doesn’t make sense. Here’s a quick summary of just a few of the costs you’ll face when selling your house in Indianapolis in the traditional way:
- Repairs – When selling your house in Indianapolis, you will have to make repairs, both before and after the inspection process. As we discuss earlier, choosing the right repairs and update is critical. Make sure you choose the right repairs and updates to get the biggest bang for your buck!
- Cleaning – Whether you clean the house or hire a professional, getting it ready for the market will take time and money. Many people will have the carpets cleaned, and the outside power-washed in addition to the standard cleaning that must be done. But remember, you will need to keep your house in show-ready condition until you find a buyer.
- Advertising – If you work with a real estate agent, they will likely cover the expenses associated with listing your house. These include the MLS listing, photography and the expense of handling all the paper work. But it’s important to consider broker motivation. Remember, brokers work on commission. The more expensive the house is the greater their commission will be. If your house is worth $300,000 and is in move-in ready condition, (assuming your house is located in a desirable location) it will be easy to sell. But what if your house is only worth $125,000 or less? And what if your house is not in move-in ready condition? It’s going to be much harder to sell a project house and their commission will be a lot less. Ask yourself, how motivated will your broker be to work on your behalf to find the right buyer?
- Holding Costs – Remember, every day you hold onto that unwanted house if will cost you. Many people are surprised to see how much it costs to own a house. Mortgage interest, insurance, utilities and general wear and tear. If the hose is vacant, it is prone to break-ins and vandals. If a water pipe should burst, it could be days or weeks before anyone knows about it. Fire is an obvious risk, but what most people don’t consider is the destructive impact that water can have.
With a direct sale to Ittenbach Capital, you’ll be able to sell your house fast, without any of the typical costs or fees. You won’t have to pay commissions, closing costs, or make repairs. No more holding costs!
Avoid Negotiations
With a direct and straightforward offer from Ittenbach Capital, you’ll know exactly what to expect and when we can close. You won’t have to worry about back and forth negotiations, or be required to make any repairs. In many situations, a potential buyer will want to negotiate the sale price after the inspection and appraisal have been completed to account for defects found or if the house didn’t appraise for what the agreed upon purchase price. With Ittenbach Capital and a cash offer you’ll be able to avoid all of these headaches.
Keep Strangers Out
When you work with a broker and list your house on the MLS, potential buyers are going to want to come and see it. We have worked with a number of home sellers who had tried to list their homes in Indianapolis without any luck. One thing most sellers didn’t like about the process, was the fact that they had to let strangers walk through their homes on a continual basis. They had to keep their properties clean and be ready to leave the house at any given moment if someone wanted to come and see it. This can be a huge burden, especially if you have a large family and pets.
Sell Your House Fast For Cash
Selling a house fast in Indianapolis can make a huge difference in your overall profits. Holding costs will add up faster than you think. Before you list your house, be sure to factor in what it is costing you to hold onto the house every day. Plus, there are inevitably repairs and other things that may come up that aren’t always considered. If your HVAC or water heater goes out while it’s listed or if your roof suddenly develops a leak you will need to get these repaired ASAP or you could lose out on potential buyers.
Adding up all these costs and include the cost of your mortgage and you’ll see it could cost you thousands of dollars a moth. If it takes four or five months to sell that money lost.
Avoiding the MLS in Indianapolis can be beneficial for many reasons. Get in touch with our team to find out if a direct sale of your Indianapolis house is right for you!
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