A home that hasn’t been updated in years can be a tough sell, but some real estate companies have found a way to move such properties.
Soon after listing homes that haven’t been renovated in a decade or more, brokers are inviting prospective buyers to tour them with contractors and inspectors for a short period. Then the home sellers seek offers without any contingencies attached.
Hammond Residential GMAC recently used the strategy to market homes in Newton and Jamaica Plain. The company was able to secure purchase offers for the homes, which were listed in May, in less than three weeks.
One of the homes, a 12-room Colonial in the Sargent Estate in Jamaica Plain that was listed for $1.95 million, was under agreement within 19 days. Another property, an eight-bedroom home on Spooner Road in Brookline with an asking price of nearly $2.5 million, was under agreement in 18 days.
Pricing is key to making the approach work, said James Nemetz, Hammond’s senior vice president. The goal is to price the property to attract attention and multiple offers.
“We put it on the market at a price where we hope that [offers are] going to go over asking price,” said Nemetz. “If you price it too high, you’re just going to have egg all over your face.”
The tactic also enables buyers to make offers knowing beforehand how much money they’ll have to sink into a property for repairs or renovations. In this way, deals are less likely to fall apart because of issues discovered during an inspection.
Hammond has determined that with certain types of properties the most effective strategy is to open the homes for a “due diligence period” lasting 10 days to two weeks, according to Nemetz.
But some Realtors said many buyers are reluctant to spend hundreds of dollars on an inspection before their offer has been accepted.
Ralph Miller, owner of Hughes & Hughes Real Estate in Natick, said having the homeowner hire an inspector prior to putting the home for sale might be a better option. The seller would then be able to disclose unaddressed maintenance issues, which could be factored into a buyer’s offer.
Still, listing broker, owner of University Real Estate in Cambridge, Fred Meyer said the upfront inspection cost won’t deter some home seekers, and the strategy is “completely appropriate” for certain properties.
“If a house is run down and suitable for a contractor, they’re not even going to use an inspector. They’ll do their own work.”