# How Much is My House Worth?

We all want to know how much our home is worth. There is a reason why home value websites, such as Zillow, are so popular. However, having already addressed in my last blog post how inaccurate Zillow is, it’s worth discussing the flip-side of things – how much is your house actually worth?

First, let’s think about the term “value” on a general level. Something’s value – what it’s worth – is only as much as someone is willing to pay for it. You might think your car is worth \$15,000, but if you can’t find anyone to buy it for more than \$10,000, then the real value is \$10,000. It is no different with houses.

Here is a general rule of thumb – the only sure way to accurately appraise how much your house will sell for is to use this formula: the general value of homes in your neighborhood minus the cost of repairing/renovating your house minus 20-30% equity. Let’s break down the pieces of this formula.

Most people understand that their home value correlates in some way to the value of the other homes in their neighborhood. But how do you determine what those homes are worth? This is actually very simple – you just look at what the similar homes that are nearby to your home have sold for in recent months. For instance, if there have been four homes in your neighborhood that recently sold in the range of \$70,000-80,000, then your home, after any necessary repairs have been done, is worth about that much.

However, that doesn’t mean that you can just sell your home for that price. You still need to factor in the repairs that need to be done on your home. Let’s say that homes in your neighborhood sell for \$70,000-80,000, but your home needs \$10,000 in repairs done. Here is the reality: no one is going to buy your house for \$70,000-80,000 because after the repairs, they have paid more than what the home is worth!

Now, it’s worth mentioning that most people would not be willing to purchase your home with \$10,000 worth of repairs to be done on it. Most homebuyers want you to do the repairs for them, and then they purchase the home after you do those repairs. But when it comes to the numbers, the end result is the same: if you do the repairs yourself, you may sell the home for \$10,000 more but you will be out \$10,000 from when you did the repairs. You lose out on the repair money either way.

There is one more consideration: equity. The days are long gone that someone is willing to buy a home for simply what it’s worth. Everyone these days understands that home values can plummet overnight, and they want to play it safe by getting a home with equity – in other words, purchasing the home for slightly less than what it’s worth. The general rule of thumb is if you want to sell your house fast, you should plan on giving your buyer 20-30% equity in the home. If you aren’t willing to give your buyer equity, there is a possibility that you may still be able to sell your home, but you can plan on having it sit on the market for a very long time (something I discussed in point #2 of this blog post), which I assume, since you are on this site, you want to avoid.

So let’s give an example. Let’s say your house is in a neighborhood that typically sells homes for \$70,000-80,000. That means your home is worth about \$75,000. But you also have about \$10,000 of repairs that need to be done and about 25% equity (\$18,750) that needs to be factored in. The real value of your home is approximately \$75,000 – \$10,000 – \$18,750 = \$46,250.

You might be thinking: “\$46,250! That’s all I can sell my home for!??” In this case, yes – but if you were to sell your home to Upstate House Buyers, that number isn’t as bad as it may seem. With Upstate House Buyers, you don’t pay any closing costs, realtor fees, attorney fees, commissions, etc. – fees which can run into the tens of thousands of dollars – and you don’t even need to repair or clean your house. We will buy it as-is and take care of all the other expenses for you. (You can see a breakdown of how much money you could save by selling to Upstate House Buyers in point #5 of this blog post.)

The good news is that you can get a free evaluation and estimate of what Upstate House Buyers will purchase your home for by simply clicking here and filling out our survey. The worst thing that can happen is that you decide not to sell us your house – no harm is done to you or to us! So give us a shot, and let us know how we can help you.

# How accurate is Zillow?

In real estate, the million (actually, more like billion) dollar question is this: how much is my house worth? Sites have popped up all over the internet claiming to estimate home values. Type in your address and – voila! – you have a neat and tidy figure for how much you should be able to sell your home for.

There’s only one problem, however. Those websites almost always are way off in estimating home values. Why? Because they don’t have any way of assessing what number of repairs need to be done on a home or, on the flip side, how many upgrades have been done. So one home that is literally falling apart may be next to another home that recently had \$20,000 in upgrades done to it, and Zillow will list them as being worth just about the same amount, since the website’s algorithms don’t take those factors into account.

To illustrate the inaccuracy of these websites, I refinanced my mortgage last year and had to have an appraisal done on the property. An appraiser came out and walked around the outside and inside of my house taking detailed notes, and then did an extensive amount of research on the surrounding neighborhood that I live in to determine my exact home value. In other words, her appraisal was very detailed, and it needed to be, because that’s what the banks who provide the mortgages demand. So how close do you think her appraisal (taken just a year ago) compares to what Zillow currently says my home is worth? Zillow claims that my home is worth a whopping \$38,000 more than what the appraiser concluded!

Now my home has probably gone up in a value a little bit over the past year, but I haven’t done \$38,000 in renovations. The fact that Zillow would be that far off from what an actual appraiser concluded a home was worth is shocking to some degree, but again, those websites aren’t factoring in the inside of the home, which is the most important part! So we should expect them to be inaccurate.

Very few people are able to sell their home for the price that Zillow says they should. In fact, Zillow benefits from over-inflating home values because that will bring more people to the website to feel good about their home. It is a sad but very real reality, and if you really want to know what your house is worth, you should talk to someone who wants to buy it. Ultimately, your property is only worth what someone is willing to pay for it.

The good news is that finding a buyer is easy! Upstate House Buyers will evaluate your house for you and tell you what we would be willing to pay for it. Ultimately, your house is only worth what someone is willing to buy it for, and we would be glad to tell you what we will buy it for if you will only fill out a short survey on your house here.

# 10 ways to avoid being scammed when selling your house

Oftentimes, people who are trying to sell their house are desperate. Very few of us are in a position where it’s fine for our house to sit on the market for months or years without selling. As such, those of us who are trying to sell a house are particularly vulnerable to getting scammed. Scammers know that the best time to get to someone is when they are desperate and need money quickly.

I’m not suggesting that you could get scammed into losing your house. That isn’t necessarily impossible, but it would be difficult to do and most scammers are looking for quick, easy ways to con their victims. For instance, they could get you to share personal information that gives them access to your bank accounts or to other sensitive information. They could also do something very simple (but frustrating for you) such as take your address, email address, etc. and sell it to other scammers to bombard you with scam materials.

Whatever it is that the scammers are after, you want to try to avoid them at all costs. As such, here are ten questions you should ask to ensure that you don’t get scammed when dealing with someone who wants to buy your house:

1. Do they have a website or place where I can find clear, concrete information on the people I’m dealing with or with their business? This one is important because most scammers try to fly under the radar. If they do have a site, that site will usually have very little content about what they actually do and will focus more on getting your sensitive information, such as a social security number or credit card.
2. Am I able to speak to someone over the phone or do they insist that I text or email only? Scammers don’t like to talk on the phone because the person at the other end might be able to identify by their tone of voice that they aren’t legit. As such, they will try to limit this type of communication for electronic means at all costs.
3. Are they operating a real business or is it just one person who isn’t willing to disclose his motives for buying my house? Each state has a way of looking up businesses online, and you can verify there if a business is real or not. The state of South Carolina has its database of businesses here, and that is where Upstate House Buyers LLC is listed.
4. Do they immediately ask for sensitive information rather than for the usual information that a house-buyer would be interested in? Sensitive information includes: social security numbers, bank account numbers, credit card numbers, etc.
5. Do they want to buy my house without ever seeing it? This is a big red flag – no one should legitimately be willing to buy a house without looking at it first. If they tell you that they are willing to buy it without ever seeing it, don’t take the bait.
6. Do they want me to send a wire transfer/check/Paypal to close the deal, with a guarantee that they will send me their payment via wire transfer/check/Paypal shortly thereafter? This is a very common ploy. In this tactic, the scammer will insist that you will get paid a certain amount of money but that he needs you to pay some money first. When dealing with real estate, he may claim that the money you owe will cover closing costs, and that he will repay you the full amount that he owes you after he receives your money. The only problem is that once he receives your money, you will never hear from him again.
7. Do they try to purchase the house without anything official in writing (such as a contract)? Since scammers try to fly under the radar, they don’t want to mess around with contracts or other documents that could get tracked back to them (or make it obvious that they are scamming you). More often than not they will try to get you to agree to things through emails without real signatures or text messages.
8. Do they have a mailing/postal address (or a PO Box)? There is nothing a scammer hates more than having a mailing address, since mail is run by the US government and having an address or PO Box means their scam could be traceable by law enforcement. If the people you are dealing with don’t have a place where you can send them mail, you should be concerned about their legitimacy.
9. Have they clearly invested in their business or do they not have much more than a phone number and a generic email address? Scammers typically don’t spend a lot of money crafting their schemes. They want to get money (from scamming), not spend money on things like marketing materials, etc. that could ultimately track a law enforcement official to their doorstep. As such, most scammers will not have professional business cards, marketing materials, websites, etc. They will likely keep these things to a minimum and have very little noticeable infrastructure to their “business.”
10. Are they able to provide references, if you ask for them? A legitimate real estate investor will have people who can vouch for his legitimacy. If not, he is likely trying to pull the wool over your eyes.

Upstate House Buyers is a legitimate business registered with the state of SC. We pride ourselves in honesty and transparency and want all parties that we work with to have the sense that we are reputable and truthful. If you have any concerns about this, we welcome for you to check out our FAQ page to answer any questions you may have. If still not satisfied, please contact us and let us know your concerns, and we will do our best to answer them and alleviate your concerns.

# What happens if I foreclose on my mortgage?

Foreclosure isn’t fun for anyone. Having creditors call you and show up on your doorstep to tell you that you may lose your house is a nightmare for the average American. But the worst part is what happens after you lose the house – when the banks see to it that your credit is destroyed.

What do I mean? When you foreclose on a mortgage, that foreclosure is listed on your credit score, and it is the worst thing that can appear on your credit apart from a bankruptcy. There are numerous serious problems that result from having your credit damaged in this way:

• Inability to open a new mortgage to purchase another home
• Rejection from being able to rent a home, once the property manager sees your credit score
• Inability to obtain credit cards or to lease or obtain a loan on a car
• Once you are cleared to obtain a new mortgage (and most other loans or lines of credit), your interest rates will be significantly higher than the rest of the population and you will have to put down a higher down payment (probably around 20%).

The average length of time it takes for your credit to heal after a foreclosure is seven years, and that’s only if you do everything perfectly (i.e., keep up with all you credit cards, etc.) during that time.

Foreclosure is a serious problem and no one wants to end up living with their in laws because they can’t rent an apartment or get a mortgage. A better option is to sell your property to an investor, like Upstate House Buyers,  before foreclosing. We can buy the house quickly and renegotiate things with your bank to get you the best possible deal. Then you can move forward with your life, knowing that you won’t be in the credit doghouse for the next seven years.

If your mortgage is in trouble and you risk foreclosure, why not take a second to fill out our online form and let us contact you to discuss purchasing your home? Just taking those few minutes could save you years of hassle and heartache.

# Should I sell my house through a real estate agent (realtor)?

Many realtors are good people, and they serve a very valuable role in the world of real estate. However, for many people looking to sell a house, using a realtor would be a mistake. Consider the following questions:

• Do you need to sell your house quickly?
• Do you want your final transaction to result in no costs out of pocket for you?
• Do you want to sell your house in a way that is simple – no constant stream of visitors showing up to look around, no lengthy book of paperwork to be signed, no headaches of dealing with banks, etc.?
• Does your property have a lot of repair-work and/or cleaning that needs to be done on it for it to be livable or sellable?
• Do you want to cut out commission fees and make sure you get 100% of your final sale price?

If you answered yes to any of those questions, you do not want to sell your house through a realtor. The reasons are simple. When you go through a realtor, they have to spend quite a bit of time gathering information on you and the property. If the property is in bad enough shape, they may not even be interested in listing it for you (it does cost them some money to list it; so you can understand why they might be picky). If they do decide to list it, they will expect you to get the home in good condition (both repaired and cleaned), and then they will put it up on the MLS home database where people will eventually start looking at it and contacting your agent to try to visit the property. Likely you will have numerous visitors and most of them will walk away from the house with a “problem” that was a deal-breaker for them. Eventually you may find a person who likes your house and wants to purchase it. But this person likely has to get financing from a bank, which means now the bank has to appraise your house and give approval to the buyer that they will finance it. This process can take weeks and frequently results in the buyer getting rejected for financing, at which point you would have to go through the process all over again. If you do finally endure the months (and sometimes years) of hassle and get to the closing table with a buyer, you will lose out on at least 6% of the final sale of the transaction (possibly more, depending on how much negotiation the buyer did with you on closing costs) – the 6% goes to your agent and to the buyer’s agent as compensation.

Compare that process to selling your house to an investor, such as Upstate House Buyers. If you sold your house to us, you would deal with one primary person (Stan McCune) and he would handle all of the ins and outs of the transaction, from making you an offer to providing you with the simple paperwork for the contract. When you close, you wouldn’t be dealing with banks, brokers, or realtors all getting their slice of the pie through commissions. What you agreed would be the selling price of the home is the amount of money you would get on your check when you walk out the door after selling the home, and you would not have to pay any closing costs. From start to finish, the entire process can take as little as one or two weeks.

Interested in learning more? Why don’t you fill out our online form to tell us more about your house and we will contact you to discuss your options.

# When is the right time to sell my house?

Determining when is the best time to sell a house can be a tricky thing to do, but there are a few times when it is always a good idea to sell your house immediately:

1. When you need the money more than the property itself
2. When you are behind (or “underwater”) on your mortgage
3. When the home has been damaged to the point that it would take more time/money to repair it than it’s worth to you
4. When the home is vacant and not helping you in any way

Many people make the mistake of waiting too long to sell a house that they own (or not selling it at all), and that is why there are so many properties with shattered windows, overgrown landscapes, and damaged roofs. A home should do one of two things for you: either a) be a comfortable, enjoyable primary residence where you and your family can happily live in or b) provide you with money via rental income.

If your home is doing neither of those, then it is at best a nuisance (especially if you are paying taxes on real estate that isn’t giving you anything in return) and at worst it’s a serious problem that causes stress for you and your family.

If you own a home that isn’t producing anything of value for you, would you consider filling out our online form to tell us about your house and let us contact you about buying it?