Another option for selling a property FAST in Dallas / Fort Worth TX, where the property has at least 30% equity or more, is through an Auction Sale.
Typically the way this works is that an investor will get the property under contract for up to 70% of the as-is fair market value, and will then auction and/or market the property aggressively to prospective buyers he may have already identified. Alternatively, a licensed auctioneer can work with the property owner to set a reserve price, typically at up to 70% of the as-is fair market value, and then auction the property, through a public auction, to the highest bidder that bids above the reserve.
The advantage of working with an investor is that the owner is not required to pay for the marketing of the property (which can cost 5-10% of the value of the property) and the owner does not have to pay sales commissions or possibly even the closing costs (which can total 6-15% of the cost of the property). The advantage of working with an auctioneer is that any proceeds after marketing, commissions, and closing costs go back to the seller.
Auction Sale Example
– Current Appraised Property Value: $500,000
– Existing loan(s) payoff: $330,000
– Sales/Reserve price: $350,000 +
In this example one of two scenarios can occur:
1) An investor gets the property under contract for $350,000 and attempts to wholesale the property quickly to a list of pre-qualified buyers within an option period (usually 60 days). If the investor can wholesale the property within the option period, the sale is completed, the investor takes care of all expenses and closing costs, and any premium above the option price of $350,000 goes to the investor. If no buyer is found, no sale occurs, and the seller is not out any costs or expenses.
2) Alternatively, a licensed auctioneer can auction the property for the seller. In this scenario, the auctioneer collect 5-10% of the property value from the seller and spends this money on marketing. After the marketing, the property will be auctioned off to buyers found by the marketing, with bids starting at the reserve price of $350,000. If a buyer is found and bids above the reserve price, the property is sold and the seller receives any proceeds remaining after closing costs and commissions (which can be 10% or more) and of course the costs of the marketing. If no buyer is found, no sale occurs, however the seller is NOT reimbursed the marketing expenses.
Dallas Property Investors can manage this entire process for you by contracting to buy your property from you, and marketing it to sell quickly to a list of pre-qualified buyers, within the option period (usually 60 days or less). Contact Us to discuss this further.