All-New Everything
Believe it or not, the headline of this post isn’t an oxymoron — or even an insult.
On the contrary, a Buyer who intends to do a “stem-to-stern” renovation is the salvation of more than a few Sellers (see, “Tear-Down Economics“), who have neither the inclination nor resources to do needed, major updating — and may even have fallen behind on required maintenance.
Three other advantages selling to such a Buyer:
One. Fewer inspection issues.
The condition of the Kitchen appliances doesn’t matter if the Buyer is going to buy all-new everything — and re-do the Kitchen, to boot.
Two. No two-year statute of limitations on Seller Disclosure issues (at least in in practice).
Absent fraud, the standard statute of limitations for any condition-related issues is two years.
That is, if the Buyer moves in and discovers a problem with the house that: a) they can prove existed when they bought the house, and b) the Seller knew or should have known about it, they may have grounds for legal action.
However, when a Buyer guts the home after closing, practically, Sellers are in the clear.
Three. Financial strength. Buyers who have the resources to put tens (or hundreds) of thousands into a home, post-closing, are usually very well-qualified to buy the home.
Ergo, no mortgage or financing issues (aside from appraisal, anyways).
So, what’s the one drawback associated with a gut/rehab Buyer?
They’ll typically want a (deeply) discounted price to reflect the time and effort to tackle such a major project.
P.S.: It’s usually apparent to everyone when the Buyer is contemplating significant changes — if not when the deal is negotiated, afterwards when they request access to the home to meet contractors.
However, tact and discretion are still the way to go (see, “Home Sellers and Buyers’ Intentions“).
