No action on sale of brother's home
Q. My brother passed away suddenly in September, and I have been named executor of his estate. His estate includes a two-bedroom, two-bathroom, adobe-style home in Apache Junction, Arizona.
I hired a real estate agent off the internet promptly because the home has a sizable mortgage and all his family is in New York state. The agent seemed excited about the property at that time and set the price at $399,000.
The house has not sold yet. I have lowered the price by $50,000. There are a lot of views on the computer, but they are not translating to showings or offers. All I hear from the agent is about the property's shortcomings. She has yet to show the house herself!
She knew this was an estate listing being sold as is, and yet her suggestions involve staging, raising the commission, cosmetic improvements … all costs I do not have the money to pay for.
Every month this house is costing my family $2,000 in mortgage and utilities, not to mention the worry and stress of an empty house many states away. Is there any advice you can offer?
A. You don't say what has been done to prepare the house for the market. If nothing at all, you may want to contact a company out there that does staging. You don't want the full service, just to see what it will cost to tidy and polish the place.
Have you done your own research about the prices of comparable properties out there? After all, if you were to offer the place for $2, it'd sell immediately. Somewhere between $2 and $349,000 is an asking price that will move it promptly.
That agent may have suggested an unreasonably high asking price just to get your business. If the listing is near expiration, change agents. If it has a while to run, you have the right to cancel. The agent might ask for money spent on the property - mostly advertising - though few ever do.
If you have confidence in a local real estate agent, you can ask him or her to suggest a replacement broker out there. Or you can consult someone where you are who's with a national firm. The local agent will end up with a referral fee, but it won't cost anything extra, and you'll have someone nearby to consult for advice. Or you can search online for an agent in Apache Junction who's already offering property near your brother's.
Q. I heard a TV speaker recently say buying rental real estate is not just the best way to build an estate, but the only way. Do you agree? I am tempted to try it. Your guidelines, please.
A. I suppose whoever said that is selling real estate. It is a good way, but if you're going to be a landlord, you've got to be ready for constant effort. You can buy stock and then limit your effort to checking the quotations. That's not so with a two-family house three blocks from your home. You must be ready to get a phone call at 6 a.m. about a leaking water heater, buy a replacement (preferably wholesale) and arrange for someone to let the plumber in that very day.
At the start, line up some help. You need a real estate broker who is interested in your goal, an accountant and a lawyer, preferably one who specializes in real estate.
You needn't sign up for expensive courses. The public library has books with plenty of advice. It wouldn't hurt, though, to take the course required of beginning real estate salespersons. You can use the information, and you might meet someone interested in helping achieve your goal.
Forget about vacant land or lots in resort areas. It produces no income, ties up your capital and requires property tax payments. Even skilled investors can judge wrong. It's no place for beginners.
Start small. You won't risk too much, and you'll learn a lot about landlording. A one- to six-unit building in a familiar neighborhood not far from home is best for a beginner.
Before your purchase offer becomes firm, hire a building inspector so you'll know what you're getting into. After your purchase is final, ask prospective tenants to bring their credit reports. And be sure to treat all alike to meet fair housing standards.
Good luck!
• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.
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