How To Price Your Inherited Home In Metro Detroit For Sale

If you’ve inherited a property and you’re planning to sell it, make sure you read this blog post for 3 tips about how to price your inherited home in Metro Detroit for sale…

Did you inherit a property that you’re now thinking about selling? While an inherited property can be a wonderful gift from a loved one who has passed on, it can oftentime be a costly burden. So selling it makes sense and allows you to use the gifted equity for some other purpose. But selling an inherited property may not come easy to you, especially if you haven’t sold a property in a while. So here’s how to price your inherited home in Metro Detroit for sale:

Tip #1: Price Competitively To Sell Quickly

You’re absolutely right. Pricing an inherited property appropriately is crucial, and understanding how quickly you want to sell can greatly impact that decision. Here are some important factors to consider when pricing and selling an inherited house:

1. The Cost of Holding the Property

• Ongoing Expenses: While the house is on the market, you will need to cover costs like property taxes, utilities, insurance, and maintenance. The longer the house remains unsold, the more you’ll spend on these ongoing expenses.
• Repairs and Upkeep: If the house requires significant repairs or upkeep, those costs can quickly add up. Even if the house is in decent shape, general maintenance and minor repairs might still be necessary to make it marketable.

2. The Time Factor

• Longer Sales Process: Selling through a traditional agent often means waiting several months or longer to find a buyer. This process includes time for listing the property, marketing, showings, negotiations, and closing.
• Fast Sale vs. Higher Price: If you price the property lower than market value, you may attract buyers more quickly. This can help you avoid months of carrying costs and the potential risk of the property losing value over time. However, it’s important to weigh whether the faster sale is worth the potentially lower offer.

3. Realistic Market Pricing

• Comparative Market Analysis (CMA): An agent can provide a CMA to help you understand the current market value of the property based on similar homes in the area. But keep in mind, even with a fair CMA, your property may not sell for the higher end of the market price if it needs repairs, updates, or if it’s in a less desirable location.
• Price Adjustments: Even if you initially set a higher price, you may need to adjust it downward if the property doesn’t receive offers quickly. This could end up costing more in carrying expenses than if you priced it more competitively from the start.

4. Market Conditions

• Buyer’s vs. Seller’s Market: In a seller’s market, you may be able to price the property higher and still sell quickly due to high demand. In a buyer’s market, you may need to price more competitively to attract buyers who have more options available to them.
• Location and Condition: If the house is in a desirable location and in good condition, you may have more flexibility in pricing higher. However, in the case of a hoarder house or one in disrepair, a lower price might be necessary to account for the cost of repairs that buyers would have to incur.

5. Alternatives to Traditional Selling

• Direct Sale to Investors: If time and convenience are your top priorities, selling directly to a company that buys houses as-is might be a great option. This eliminates the need for repairs, maintenance, and showings. You can sell quickly and avoid the hassle of the traditional process. Keep in mind, though, that investors typically purchase at a lower price because they’re taking on the risk and cost of repairs themselves.
• Quick Cash Sale: A quick sale to a cash buyer can also help avoid the long wait times of traditional sales and reduce carrying costs.

Ultimately, selling an inherited house involves weighing the trade-off between price and speed. If you need a fast sale and want to avoid ongoing costs, pricing slightly lower for a quicker sale may be a smart move. However, if you have the time and are willing to invest in repairs and upkeep, you may be able to secure a higher price through a traditional listing.

It all comes down to your priorities: Are you willing to wait for the highest possible price, or do you prefer a faster, more hassle-free sale?

Tip #2: Avoid Pricing Based On Fond Memories Or Emotion

That’s a really important point. It’s completely natural to have emotional attachments to a family home, especially one filled with cherished memories. However, when it comes to selling an inherited property, it’s essential to separate those emotions from the practical realities of the real estate market. Here’s why:

1. Emotional Value vs. Market Value

• Sentimental Value: You may feel that the house holds immense sentimental value, and understandably so. However, buyers are looking at properties from a financial and practical standpoint, not from the perspective of memories made in the home. While the home may have deep emotional significance for you, it may not resonate the same way with others, especially if it requires repairs, updates, or is in a less-than-ideal location.
• Market Value: The market value of a property is based on various factors like location, condition, comparable sales (comps), and the overall demand for similar properties in the area. It doesn’t take into account how much you loved living there or the memories tied to the house.

2. Avoiding Overpricing

• Inflating the Price: Many people unintentionally inflate the price of an inherited property because they associate the home with positive emotions. For example, if you grew up in that house and have fond memories of family gatherings, it might feel like it’s “worth more” than a similar house on the market.
• Setting the Right Price: Overpricing can lead to the property sitting on the market for an extended period. The longer it stays unsold, the more you may have to pay in ongoing costs (maintenance, utilities, taxes), and the lower the eventual selling price might be if the house doesn’t get the attention it needs.

3. Working with a Real Estate Company

• Professional Perspective: A real estate professional can help you set a realistic price based on comparable properties and current market conditions. They can provide an unbiased opinion and guide you in pricing the house fairly.
• Objective Valuation: The professionals will consider the market’s demand for homes in the area, the home’s condition, and what similar homes have recently sold for. They can also recommend repairs or improvements to help the house fetch a better price, which could take some of the emotional sting out of selling it for less than you expected.

4. Why the Price Might Be Lower Than Expected

• Repairs and Updates: If the house is in need of repairs or updates, even if you have fond memories of it, the market might not be willing to pay a premium for a house that requires a lot of work.
• Location and Market Conditions: Depending on the market in Metro Detroit, certain areas may have slower sales or lower demand, meaning that the home’s location could influence its price. Emotional value doesn’t change the reality of the market.

5. Finding Balance

• Compromise: It’s okay to honor the memories the home holds while also acknowledging that it might be time to move forward and sell it at a price that reflects its market value. The right approach is to find a price that’s fair to you and that will attract buyers, allowing you to close the chapter on the property and move on to the next step in your life.

Ultimately, the key is to approach the situation with an open mind. While the home may hold a special place in your heart, working with professionals who can guide you through pricing and selling will help ensure that the process is as smooth and financially beneficial as possible. This way, you can honor the property’s legacy without letting emotional attachments get in the way of a successful sale.

Tip #3: Build In Discounts For Repairs

That’s a great point! When you inherit a property that requires repairs, you face a few options: invest time, money, and effort into getting it fixed up, or price it accordingly and sell it “as-is.” Here’s why offering a repair discount can often be the smarter choice:

1. Avoid the Hassle of Repairs

• Time and Effort: Even if you’re handy or have some DIY skills, repairing a house can take weeks or even months, depending on the scope of the work. It can be physically demanding and mentally draining, especially if you’re balancing other responsibilities.
• Hiring a Contractor: If you decide not to do it yourself, hiring professionals (painters, plumbers, electricians, etc.) can get costly. The expenses of labor, materials, and potential contractor fees could end up being far more than you originally anticipated.
• No Guarantee of Recouping Costs: Even if you invest in repairs, you may not necessarily see a return on that investment. Buyers often look for a “bargain” when purchasing a house that needs work, and they may not value your repairs as much as you do.

2. Pricing It As-Is with a Repair Discount

• Attract Buyers: Offering the property at a lower price for its condition (the “repair discount”) can actually attract more buyers. Many buyers, especially investors or first-time homeowners, are open to purchasing a house that needs work, as long as the price reflects that. In fact, some buyers prefer to take on the repairs themselves to ensure it’s done their way.
• Quick Sale: By pricing the house lower and accepting that it will need work, you may be able to sell the property faster than if you were to try and repair everything first. The market could be much more responsive to a well-priced “fixer-upper” than an overpriced, renovated house.
• Save Money on Holding Costs: When a property sits on the market for a long time waiting for repairs, you still have to pay ongoing expenses like utilities, property taxes, insurance, and maintenance. A faster sale means less money spent on these costs.

3. Still Come Out Financially the Same (or Better)

• Market Demand: As long as the price is set appropriately for the repairs needed, selling as-is can still yield you a fair price. A buyer will factor in the cost of the repairs, so you won’t be penalized for selling without making improvements.
• No Investment in Repairs: By opting for the repair discount, you essentially eliminate the costs associated with the repairs. This means you save on contractor fees, supplies, equipment rental, and your time. This could be a financial wash compared to spending all the effort upfront to repair and try to sell for more, but without the guarantee of a better outcome.

4. Transparency and Simplicity

• Honesty with Buyers: When you price the house with a repair discount, you’re being transparent about the property’s condition. This can build trust with potential buyers. They’ll know what to expect and won’t feel like they’re paying for a home that’s been overpriced due to unnecessary repairs or renovations.
• Less Negotiation Drama: Buyers may feel like they’re getting a better deal because they know they’re buying the home “as-is” for a price that reflects its true condition. This means fewer negotiations and potential delays over the repair costs, streamlining the sale process.

5. Emotional Relief

• Moving Forward: Sometimes, selling as-is allows you to close a chapter and move on. The emotional strain of dealing with repairs can make the process feel longer and harder, especially when you’re already going through the grief of losing a loved one. By offering a repair discount, you’re reducing the stress and complications of the sale.

6. A Win-Win for Both Parties

• Buyer’s Perspective: The buyer gets a house at a lower price that they can repair to their own liking. If they’re an investor, they may even be able to flip the house for a profit. The lower price gives them the incentive to take on the repairs.
• Seller’s Perspective: You get to skip the work and still come out financially whole. You’ll save time, money, and emotional energy while still getting a fair price for the property.

In conclusion, offering a repair discount rather than going through the trouble of fixing everything up can often be the most efficient and beneficial option. It saves you the hassle, reduces costs, and can still result in a smooth and fair sale. The key is setting the price appropriately for the home’s current condition and being upfront with potential buyers.

Summary

An inherited house can be a lot of work so if you’re thinking of selling it, you’re certainly not alone. But how do you price an inherited house? These tips will guide you on how to price your inherited home in Metro Detroit for sale.

Why not bypass all the work and cost of selling through an agent and instead get in touch with us today about selling your inherited property to us here at Metro Detroit Homebuyer? Just call us at (313) 246-4551 or click here and enter your information in the form.