Realtors Recommending Sale to Investor

[Barbisi]

I was so angry that I couldn't see straight earlier today and when my BP was checked during my dental exam, it was somewhat high (but not as high as I feared it would be, LOL!)
On Friday, while the scheduled pre-inspection was underway, our realtors decided to "invite" an investor they claimed would give us a fair offer, to our house for a private tour, with our consent, of course.
Well, while we are still waiting for the home inspection verdict (i.e. what systems and other maintenance issues have to be absolutely fixed so the house will pass an inspection in order to qualify for a mortgage lender), the realtors informed my husband that even with new carpet, paint, vanities, etc., she (the wife) thinks we cannot clear more than the investor's offer between 500-525K after realtor fees, closing costs, repairs, etc. are factored in.
Her high estimate is only 575K, regardless of the sprucing up, because according to her, no one will pay more than that for a 47 year old house that has not been gutted and totally remodeled. She insists that desperate buyers will only purchase top of the line houses with every thing brand new. Of course, she knows we were forced to defer upgrades, repairs, and some basic maintenance, because of the five year BK13.
I do not like her assessment and fear she is in cahoots with this particular investor and has been promised a kickback if she can talk us in to accepting this "reasonable" offer by 4/17/22.
(Redfin currently estimates our house at over 630K , but these realtors insist our house will never be worth than 575K unless we could spend thousands more than the 30K we have available from the 401K loan.) They also claim we should rent a house or stay in a hotel at a cost of a few thousand because our cats living with us in this house until the closing will jeopardize the sale should they urinate on the carpet even once, and then the buyers could sue us for "fraud" (or something like that since the house would no longer be in the exact same condition as it was while it was on the market or even under contract.)
I feel we may need to find new realtors who will hustle to sell our house, instead of comparing our older house to model show homes that are selling for 100k over asking price and telling us our house should be sold as an "as is fixer upper" home.
What do you guys, shipo, justbroke and @flashoflight, think? How would you three handle this?
I thought this was a seller's market! Am I wrong?

[justbroke]

First rule of real estate... the price is what a willing buyer will pay to a willing seller. It's hard with using COMPS because they generally go by $$$ per square foot and not necessarily what would a.) bring something to code, b.) fix broken systems, or c.) consider the furnishings and fixtures within the home (e.g. upgrades). For example, I know some investors that won't give you asking price if you have any system that is more than 7 years old. By system they mean HVAC all the way down to the stove and dishwasher. The roof is another critical thing. That 7-year old factor seems to be about standard, at least here in Florida. If you don't meet that standard, then the "buyer" starts deducting from the asking price.

If you don't know the value, then get an actual appraisal. They'll look more closely at the condition of the home and use true comparables, rather than the automated valuation methods (AVMs) used by the online services like Zillow.

It may be a seller's market, but it will always come down to the market in that specific area. The Florida market is somewhat cooling, but my home value keeps going up. That's because there are only 1-2 homes on the market each month here, and it's a highly desirable new sub-division with great parks, new schools, amenities, infrastructure, and entertainment/restaurants. Even a new firehouse to boot. People are paying over appraisal value here which is crazy.

I can't tell you what your property is worth. Setting a value is a bit of black magic, and if you want a quick sale, you may need to bend on the price. I strongly suggest maybe getting an appraisal (which will cost you $550-750 due to the value) and see what they think. Because, in the end, your market may not support purchasing over the appraisal and if you have an appraisal contingency, you'll find your house right back on the market and find the need to reduce the listing price. This is a phenomenon that has played out in Florida where the sellers and buyers had visions of a bargain and the banks just don't like that.

(I just noticed that in another area here, the builders have even started dropping their ridiculous prices. Just saw several new homes in a new sub-division drop by $23K this week. Perhaps the frenzy is over.)

[Barbisi]

We never used Zillow for any calculations. Houses here do tend to sell for or above Redfin estimates, rarely lower. Also, there is a record setting market shortage of available houses for sale in the Denver area, hence the buyer desperation. So why must our house be perfect to attract multiple buyers?

[Zombie13]

Barbisi may do a better job talking with our realtors.

[Zombie13]

Hope it works out.

[Barbisi]

Thanks justbroke!
Yes, getting an appraisal may be in order, after we do some commonsense updates (paint ,carpet, etc.)
I think we may be coming full circle ( i.e. , bought an ill advised investor home, sold said investor home and lost at least 20K, bought current house, and had to file BK13 because we couldn't repay 100+k CC debt and pay an additional $600+ more monthly mortgage, and now we are supposed to just sell to the all powerful investor and get rooked yet again!)
Will we ever win in this lifetime? LOL

[brokenurse]

I'll preface by saying I don't know what the market is like in your area, but I was a realtor for a period of time. If your home does need a lot of expensive work (roof, HVAC, windows, concrete work, etc) then the realtor's advice is not totally wrong. A home that needs that much work will limit your buyer pool. For example, there are restrictions on the kind of violations FHA buyers can assume, which means if an FHA buyer wanted your home you'd be the ones paying to fix everything so the title can transfer. An investor usually comes in with cash, which means there would be very little that would stand in the way of the sale going through; they assume all the repairs needed and buy the home.

You don't have to do anything you don't want to do. Your realtor works for you, but their job is to provide you with all the information even if it's tough to hear. You can thank them for the advice and have them list the property for whatever you'd like it to be listed for. The market will quickly let you know if you're on the right track or not (a flood of offers soon after listing vs. no showings). If you haven't signed any paperwork that forces you to use these particular realtors you can always interview a few others to get their take. Then you'll really know how to proceed.

[Zombie13]

thanks @brokenurse.
I spoke with the realtor yesterday; she mentioned 3 numbers in our conversation, though she stated she and the investor did not settle on a number: 500K, and 515-525K.
We see homes in our negighborhood with similar model plan, selling for 580-620K. The 620K was significantly updated. The lower ones actually appear to have 'lower grade' options than what we already have, and plan to put in. Not major fancy stuff, just paint, carpet, appliances, possibly a furnace. We do have a solar panel lease as well, which has a few options at sale: buyers assume lease, buyers buy power, sellers buy power, or we split the power (around 8k) - this means the buyer owns the panels outright, but still have flexibility of a free maintenance contract.
We will get the pre-listing inspection report this week, so we will see if any major components are at issue. The roof was replaced 2 years ago.
The realtors asked us a few weeks ago if we would consider the investor option. I said yes, since I was interested in the number, for comparison vs standard market listing price (after updates). The comparison would include money we put into the house:
standard market sale price (minus investments/fixing) VS investor (no investments/fixing).
We reason, if we fix up the house, we can sell for about 600K, so it's worth the calculated risk of fixing the house.
As I see it, the realtors are not demanding we sell to an investor, but I do feel they are steering/pushing us in that direction, since they think we will arrive at the final profit value either way: investor vs. standard home listing. We strongly disagree. But, without the inspection report, we do not have a full picture and therefore cannot do a thorough analysis and comparison. Once we have the inspection report, we can make decisions on updates such as appliances.
We do feel considerable frustration since the realtors appear to disagree with virtually everything we suggest. For example, the kitchen sink looks very old and scratched, and the faucet looks like hell. This is a low cost, easy fix. But they said, 'your priorities are not the buyers priorities'. Which is frustrating since it is abundantly obvious how ugly the sink and faucet look. The sink can be reglazed (good option since it's an undermount with a corian rock countertop), for about $100.00. Faucet? Under $200. Plus the appliances are not a match: stainless steel fridge, white microwave, white dishwasher, white stove. It looks weird, and if we list it like that, it's got 'allowances' written all over it. Granted, they did say, they agree with making updates if possible, but just be sure to do the pre-listing inspection to check for major problems first. And this makes sense, but their language and approach to this seems to change on a daily basis.
In any event, we will get this done.

[justbroke]

Barbisi let's put it this way. I did a lot of upgrades and purchased new kitchen appliances. Want to know what the buyer did? Threw them all out and bought their own. That's just one of the issues with spending money in order to sell a property. When I look at a house, that's not a new build, I'm thinking.. during the walkthrough... that's gone, and that's gone, and that's gonna be replaced... and that might stay.

[Zombie13]

That is a good point justbroke. However, and correct me if I am wrong - if we do not put in updated appliances etc, the house will sell for much less. If we put in appliances etc., we will recover the expense.

[justbroke]

That is a good point justbroke. However, and correct me if I am wrong - if we do not put in updated appliances etc, the house will sell for much less. If we put in appliances etc., we will recover the expense.

Exactly. I was so sad after I put in KitchenAid Superba equipment which looked beautiful, but they tossed it to the curb. Yes, the home was nicely staged and the kitchen was modern, bright, and nearly a gourmet cook's dream.

I don't think you recover all the expense, but you certainly don't lose value in the sale.

That's why it's such an experience. Each buyer and seller is different. Each sale is different. Establishing the price is black magic.

[flashoflight]

Here is my opinion. Keep in mind that I'm not a realtor. I did take all of the real estate license courses and did some networking but eventually bailed on RE as a side gig.

One of my suspicions is that your realtor is lazy and knows your house will be a lot more marketing time and effort versus a quicksale to an investor or a fully modern home with no issues. I also sense lack of hustle. So I think you should fire her if possible. If you can't or won't fire her, make it clear she is going to have to earn her commission or you both go your separate ways.

I also think you should make the home minimally qualified for FHA financing and nothing more. IMHO, you will be aiming at renovators, who will pay more than investors. You'd fix or replace any broken fences, repaint the exterior if the paint job looks dated, replace all non-functioning appliances with landlord specials, and replace HVAC if broken with the landlord special. Do nothing more. I'm not in your area, but from the numbers thrown around here I'd aim for $550k+. You don't have time to fix everything anyway due to lack of contractors or appliances. It's a risk to delay this sale because if the frenzy is over, your TLC home may have very few or no offers at all if the market looks normal instead of FOMO. Then it will be the all cash investor sale. As long as your furbabies are safe in the next home, sell.

[Barbisi]

Thank you, justbroke, brokenurse and @flashoflight! I really appreciate you three responding and sharing your very valid viewpoints and perspectives!
Yes, getting another realtor or selling an alternative way is our best route.
Yes, the original plan was to do renovations (SS appliances, carpet and paint, etc.) but the scope of doing many small and mostly cosmetic fixes in addition to costlier updates like carpet and paint during a time when contractors are charging record high prices for unsurpassed demand, is making us reconsider just how much we will actually clear after all these repairs are done.
The pre-inspection report finally came in, and the inspector cited over and over, clean this and clean that (i.e., extensive BR tile grout) and fix holes in walls (MB drywall damage, other bathroom wall damage, large nail holes, missing fire alarms, etc.), replace damaged (feline scratched) carpet LOL!, the need to repaint and have multiple system inspections (electrical panel, HVAC vents, etc.).
The water heater (9 years old) appeared fine, while the 30-year-old furnace was listed as needing a thorough inspection and cleaning to determine current condition. The roof is only a year and a half old (replaced in July 2020).
The grill of the swamp cooler was listed as rusted and the exterior siding needs power washing to remove encrusted debris.
The kitchen sink and faucet were listing as needing immediate replacement due to extreme basin scratching and a not fully functional faucet (the sprayer was broken when we moved in and the undermount sink shape is no longer made, meaning if we replaced it, we would have to replace the countertop, which is a very fashionable (if dated 1990's) Corian. None of the contractors or handymen we spoke to did sink reglazing and my husband doesn't have the time to do it by himself.
When we moved in into this house in 2016 most imperfections were glossed over by these realtors, and they mostly praised the layout, but they did
describe the kitchen as outdated, meaning the cabinets, but maybe not the countertop, are 45+years old and now they clearly need repainting or refinishing.
Other concerns were listed, but the bottom line is the only reason this house is now just another fixer upper is because of the total 5-year Bk13 house maintenance deferred ban carefully enforced by the trustee - if we had not been in this BK13 since early 2017, we could have easily fixed up many of the lesser issues and replaced the appliances, and now we would reap the rewards of a crazy market 100% in favor of sellers not financially ruined by a bankruptcy.
I have discussed the realtors with a few acquaintances and like flash, the consensus among them is these realtors don't want to get us the best possible price and they just want out via an investor pushing for a quick sale, leaving us and the fur babies out in the cold with nowhere to go.
Zombie 13 has been interviewing and should he get a lucrative job offer with a signing bonus and relocation package, then losing a few thousand to an investor might not matter so much. If, however, this particular job opportunity falls through, then it will be essential that we do not accept the first low ball investor offer that has already come along.
There are other variables that might have to be considered -the next couple of weeks will tell.

[chargers777]

Thanks justbroke!
Yes, getting an appraisal may be in order, after we do some commonsense updates (paint ,carpet, etc.)
I think we may be coming full circle ( i.e. , bought an ill advised investor home, sold said investor home and lost at least 20K, bought current house, and had to file BK13 because we couldn't repay 100+k CC debt and pay an additional $600+ more monthly mortgage, and now we are supposed to just sell to the all powerful investor and get rooked yet again!)
Will we ever win in this lifetime? LOL

Yes you will win.

Just consume less.

You don't need a big house either. Find a low crime area and modest home. Good luck.

[Carmella]

Barbisi It sounds like you and Zombie are doing your homework and weighing the odds. I hope the job comes through because it would be great to get out soon as you can. The only advantage I see to sell to the investor is if you want to get out quick and not deal with the time and effort of the appliances/repairs.

Like others have said you never know how much the buyer will spend on a home or what the values will be now vs in a few months.

[chargers777]

Barbisi It sounds like you and Zombie are doing your homework and weighing the odds. I hope the job comes through because it would be great to get out soon as you can. The only advantage I see to sell to the investor is if you want to get out quick and not deal with the time and effort of the appliances/repairs.

Like others have said you never know how much the buyer will spend on a home or what the values will be now vs in a few months.

With her situation, it is an easy sale.

People under estimate the stress that these situations can cause. Stress that reduces quality and quantity of life. Whenever you can lose the stress and gain, you are winning at life.