Real cost to sell a house

[jewozzy]

My wife recently inherited property and it is split 50/50 with her brother. I am about to be named the administrator with the courts and will start trying to sell it soon. It is in the North Dallas Coit/Hillcrest/Alpha and is a pretty sweet property with an indoor pool.

My wife and I are thinking of buying her brothers portion out and upgrading the house (it has two bathrooms for the master and has a somewhat odd floor plan so we would take one of those and make it accessible to the rest of the house.) But, in order for us to do this I need to know what is a reasonable offer to make him without chopping my dick off for selling fees. House as it sits is probably in the low 400's and with the master baths upgraded I would think it could bring in the upper 400's. Kitchen was upgraded about 4 years ago and roof is a year old.

Is it safe to say 88% is left after all of the fees to agents/title/tax etc.?

[Ruffdaddy]

Realtors fees are 6% MAX but are negotiable, your other fees are negotiated on the contract/ offer. We've played a total of 4% for realtors fees on the last 2 sales.

12% seems pretty damn high for just the agent's, title...etc.

But there is also value for the risk you're taking in assuming the value and ability to sell. If they find issues during the inspection that you have to fix...that can be anywhere from a few hundred to several thousand.

Theres a huge difference between 420K and 480K. If you assess the gains you will get from improvements incorrectly, you're going to have to eat your error there.

Why not just sell as is and split? Are you trying to lowball the brother and milk out a few extra grand?

[Baron Von Crowder]

Realtors fees are 6% MAX but are negotiable, your other fees are negotiated on the contract/ offer. We've played a total of 4% for realtors fees on the last 2 sales.

12% seems pretty damn high for just the agent's, title...etc.

But there is also value for the risk you're taking in assuming the value and ability to sell. If they find issues during the inspection that you have to fix...that can be anywhere from a few hundred to several thousand.

Theres a huge difference between 420K and 480K. If you assess the gains you will get from improvements incorrectly, you're going to have to eat your error there.

Why not just sell as is and split? Are you trying to lowball the brother and milk out a few extra grand?

I think he's including closing costs?

[Ruffdaddy]

I think he's including closing costs?

I guess it depends on the market but we've never paid the buyers closing costs.

[Baron Von Crowder]

I guess it depends on the market but we've never paid the buyers closing costs.

did you read the post?

[juiceweezl]

Why not just sell as is and split? Are you trying to lowball the brother and milk out a few extra grand?

Best advice here. Sell the property...

[jewozzy]

Realtors fees are 6% MAX but are negotiable, your other fees are negotiated on the contract/ offer. We've played a total of 4% for realtors fees on the last 2 sales.

12% seems pretty damn high for just the agent's, title...etc.

But there is also value for the risk you're taking in assuming the value and ability to sell. If they find issues during the inspection that you have to fix...that can be anywhere from a few hundred to several thousand.

Theres a huge difference between 420K and 480K. If you assess the gains you will get from improvements incorrectly, you're going to have to eat your error there.

Why not just sell as is and split? Are you trying to lowball the brother and milk out a few extra grand?

We are wanting to go for the top of the market and he does not want to put anything into it. Not trying to low ball him. I made the suggestion that we would make upgrades on the house and that regardless of what it sells for we recoup or money first and then the 50/50 split and he said he would rather us just buy him out.

I think he's including closing costs?

I guess it depends on the market but we've never paid the buyers closing costs.

Yes, I was including closing costs in that 12%. I was under the impression that closing costs are usually paid for from the seller. I know as a buyer I have never paid closing costs.

[Ruffdaddy]

did you read the post?

What on earth would make you think I didnt? How are you already this lost?

We are wanting to go for the top of the market and he does not want to put anything into it. Not trying to low ball him. I made the suggestion that we would make upgrades on the house and that regardless of what it sells for we recoup or money first and then the 50/50 split and he said he would rather us just buy him out.





Yes, I was including closing costs in that 12%. I was under the impression that closing costs are usually paid for from the seller. I know as a buyer I have never paid closing costs.

That's pretty awesome if he is just wanting to get whatever money he can and get out. This shit seems to get ugly far too often with family involved...but if its his idea that's much harder for him to get pissy.

I've never paid closing costs on a NEW home, but I have on a used home as it's pretty common for a preowned home. Recent markets in DFW and Austin have favored the seller so much that we havent paid closing costs on the past 3 houses we've sold. That means my buyers have paid closing costs on them...I'm sure a realtor will know the norm for the area.

[jewozzy]

What on earth would make you think I didnt? How are you already this lost?



That's pretty awesome if he is just wanting to get whatever money he can and get out. This shit seems to get ugly far too often with family involved...but if its his idea that's much harder for him to get pissy.

I've never paid closing costs on a NEW home, but I have on a used home as it's pretty common for a preowned home. Recent markets in DFW and Austin have favored the seller so much that we havent paid closing costs on the past 3 houses we've sold. That means my buyers have paid closing costs on them...I'm sure a realtor will know the norm for the area.

Yeah we all have a really good relationship. Be basically wants the money now because he's trying to get into a new house himself.

[juiceweezl]

Again, I'll point out sell the house. Doing "upgrades" to a house will only yield a real return if you are talking about a house that is well beyond it's time with what it has in furnishings and such. It sounds like the property you have is not that way. The market is pretty good, and it's a good location. Think long and hard about what you'll put into it money and time wise to maybe make an extra $15K. Sometimes the risk isn't worth it, especially when you have no real skin in it this point per se.

[jewozzy]

Again, I'll point out sell the house. Doing "upgrades" to a house will only yield a real return if you are talking about a house that is well beyond it's time with what it has in furnishings and such. It sounds like the property you have is not that way. The market is pretty good, and it's a good location. Think long and hard about what you'll put into it money and time wise to maybe make an extra $15K. Sometimes the risk isn't worth it, especially when you have no real skin in it this point per se.

That makes sense. So to give you a clearer picture... Most of the house has been updated minus the two master bathrooms. The house has a semi funky floor plan. There are two front rooms with a bathroom to support them. Then on the back half of the house there is the master and a small bedroom (could be an office with a closet if you wanted). There is also an indoor pool. The master bedroom has 2 bathrooms and closets. Both of these bathrooms open up to the indoor pool. One of those master bathrooms could be opened up to the hallway and closed off for the master bedroom to support that back bedroom but more importantly to support the indoor pool and actually give people a place to change/get ready without having to walk through the entire house and change.

Even without doing that stuff, the bathrooms have not been updated since at least the 80s. I was thinking at that price range we would either need the bathrooms to be in top shape or would need to be willing to concede that amount at closing with a full offer.

Thoughts? I'll try to get over there this weekend and get a bunch of pics if possible.

[juiceweezl]

Personally, I do not think dropping 30K or more on bathrooms will net you much more than that investment back. Selling as is at maybe a slightly lower price may attract more buyers by staying in a more attractive price range. The buyer may also want to put their own touch on the bathrooms. So...unless you can do the work yourself and save the big bucks from a bathroom remodel, my 2 cents is let it go and take the cash you will get, sit on it until the market dips, then buy a property someone has to get out of cheap and turn it into a rental...

[jewozzy]

Personally, I do not think dropping 30K or more on bathrooms will net you much more than that investment back. Selling as is at maybe a slightly lower price may attract more buyers by staying in a more attractive price range. The buyer may also want to put their own touch on the bathrooms. So...unless you can do the work yourself and save the big bucks from a bathroom remodel, my 2 cents is let it go and take the cash you will get, sit on it until the market dips, then buy a property someone has to get out of cheap and turn it into a rental...

Yeah I'm thinking of going that route. This bathroom is killing me though! As a potential buyer it would be a major turn off for me at that price range as is. I wouldn't be looking at that price range though so maybe someone would look at it as a normal thing .

I have a few buddies that own top notch remodeling businesses so I am thinking the price range is closer to 10-13k. But still, I get it. In my mind whatever remodel goes on in the bathroom needs to double itsself profit wise for me to want to justify it in my mind.

[Ruffdaddy]

I'm not a realtor so I cant accurately asses the current value or expected future value of remodels. But a lot of people buying older houses do so with the intent to remodel anyways so there is a segment that will shun a price premium.

Regardless of that...I think of it from a perspective of risk. You have 2 main risks that can cost you big.

1 - you may underestimate the sales price. If you think the house is worth 420K and it actually sells for 395, you are eating all of that 25K loss. If you sell and split then you're splitting the loss and not immediately out of pocket on your investment. To cover this risk you have to lowball your brother in law (which he'd be crazy to finance your risk. Hes taking a financial loss for your financial gain). You say hes ok with this, but if he sees that yall sold for way more just from 15K in bathroom improvements...things start to look real fishy.

2 - you're assuming that you will get a dollar for dollar return (or better) on your investment. You have to sit on this house for a few more months to finish updates just to find out if your 15K pays off.

It's also worth looking into any tax impacts. I'm not sure if theres a difference between inheritance and an investment property.

Either way, I dont do this for a living so jm thinking from the lowest risk perspective. A realtor should know much better...and should be able to truly quantify the risk.

[Big A]

Yeah I'm thinking of going that route. This bathroom is killing me though! As a potential buyer it would be a major turn off for me at that price range as is. I wouldn't be looking at that price range though so maybe someone would look at it as a normal thing .

I have a few buddies that own top notch remodeling businesses so I am thinking the price range is closer to 10-13k. But still, I get it. In my mind whatever remodel goes on in the bathroom needs to double itsself profit wise for me to want to justify it in my mind.

I'm looking at this exact scenario, and there's no way you'll see double your return. Flippers buy low due to disrepair, and get their margin there, not because of the updates. The market and nearby comps will dictate what the house is worth, updating the bathrooms will certainly help it sell faster, but you're not going to drive up the dollar per sqft significantly.