How to Evaluate a distressed property before putting it on sale

Evaluating distressed property is the first actual step in putting up a distressed property up for sale, and filing a statement to the public offices.

Distressed properties are difficult to evaluate as their prices are much lower than expectations, a buyer who is interested in a distressed property usually comes with a mindset that the property worth would be around half of actual market value, or surrounding property value, if you try to sell at a greater rate there is no chance that a buyer would be interested in buying.

The key is to pitching the property properly highlighting the benefits that will get the buyer going after your property; these benefits would make the buyer more willing to pay more than the generally perceived rate for your distressed property as the additional features would add more value for the buyer.

Generally owners of distressed properties ignore the damages of their property, however in order to evaluate a distressed property, one must have a keen eye for detail, and spot any and all drawbacks that could potentially reduce the margin of sale and hurt the overall value of the property, it is generally recommended to look at your own property with a buyer’s eye but most people find that hard to do, the best way is therefore to have someone you know come to your house and help you spot the small stuff that you might miss out on, ( make sure it’s someone you know well enough, so that it does not put too much of a strain on your relationship with that person )

Here are some factors that contribute to an evaluation for a distressed property.

Initial Investment

Find out the initial investment of the property, the initial investment is the investment made by the original Developer of the property, it is somewhat unfortunate that real estate is analyzed on first investment, if you were the original developer of your property it would make valuation much easier, as you would already know the basic trends, and would know the details you need to know to begin with your evaluation.

Buyers tend to ask details such as original investment on property make sure not to lie about it, as they can track down the information by consulting a real estate agent or a public office.

Market Analysis

You can seek the help of professional real estate consultants and analysts who can help analyze and evaluate your property, although don’t think it’s something you can’t do for yourself if you feel like you can crunch numbers pretty well, take a stab at it, best way to go about doing this is to actually do some leg work, research properties with similar problems such as your property, and visit them, check their rates, however if you find the rates too low, don’t feel disheartened, there are other factors that also influence price other than the condition of the property.

 Location

An important factor in the valuation of a property is the location of the property itself, if the condition of the property is not that great but it is close to a really good school and within walking distance to a transportation route or a market chances are the condition of the house would although impact the sale but the proximity to such facilitating real estate would serve to keep the price to a reasonable margin.

Contractor Feedback

Call a contractor for assessment of the property, professional contractors know a lot about the fine details that go into construction of a house, a contractor would be able to tell you stuff like if your walls are at the right angle or not, or if the bathroom floor is lower than the rest of the house or not, common construction flaws go a long way into affecting the life of a house and therefore its value.

Combining all the elements you can make a pretty strong evaluation of your property and plan your sale accordingly.

If you feel like raising the value you could even plan for minor renovations that could help increase the overall value of your house. Read more about how to renovate house for sale here.