The incredible demand for new construction single-family homes and condos in some Chicago neighborhoods has brought many players into the field now that the market has recovered. This increased competition is pushing prices for land considerably higher. As long as the cost to acquire land can be transferred to the end buyer, there is no reason to assume the trend will stop in the near term, but one should expect buyer resistance to ever increasing prices to take hold at some point.
Anyone who owns an older single-family home or a building in a core Chicago neighborhood, where the highest and best use for the property might be to tear it down and rebuild, has probably received many letters and inquiries from builders and/or their real estate agents offering cash, quick close and convenient terms.
If you find yourself in this position and a sale is appropriate for you, there are obvious benefits to selling direct to a builder. These could include paying a very low commission or no commission on the sale, closing quickly, selling the property as-is with no repairs needed, very little tenant or personal interruption, etc. For some folks, selling direct to a ready, willing and able buyer is a welcome option.
On the flip side, the advantages of selling direct without professional representation, can quickly be off-set by getting involved in a transaction with the wrong buyer. If you choose to enter into a contract to sell your property to someone who approaches you, make sure to find out who they are and what their history of buying properties is. A lot of folks represent themselves as buyers, when they are in fact, not personally capable of purchasing your property. Be wary of this.
To protect your interests, ask questions and find out who you are dealing with. If the buyer is making a cash offer, request a proof of funds letter from their bank. If they represent themselves as a builder, find out how many homes they have built in the last 12-18 months. If you are receiving an inquiry from a Realtor on behalf of a builder or investor, can the Realtor demonstrate a history of selling properties like yours in off-market transactions? Does the Realtor really have a buyer or is he just looking for a listing? Realtors can be a tremendous resource and many times they have the ability to present more than one credible offer for top market value.
If you're considering a sale in the current market, it would make sense to look into all the options you have to maximize your sale price. Selling direct to a builder who expresses an interest in your property or talking to a Realtor who represents builders and investors, both have advantages which include lower expenses related to the sale, selling as-is with no repairs and fewer overall hassles. Sellers who are concerned with potentially leaving money on the table might be better off listing their property on the open market (MLS), to ensure maximum exposure to active buyers in the market. All methods have their pros and cons depending on your situation and ultimate goals related to the sale of your property.
Do you own a property in Chicago that you think a builder or investor would be interested in buying, either as land value or a rehab project? Contact Brent Hall to request an offer today or choose to list your property for sale on the open market.
Brent Hall: 312-725-6171