Home Selling in Denver>Question Details

Tim Nguyen, Home Seller in Denver, CO

Can I sell a home that is not up to code?

Asked by Tim Nguyen, Denver, CO Wed May 1, 2013

Hi,
My parents bought a run down single family home in CO in 1992. They were taken advantage of because they were immigrants and did not speak any English at the time. They are now nearing retirement and want to improve their living situation. I want to unload this property for them and get them into a newer condo/town home but I know it won't pass inspection. They can't afford the expense of repairing the home and property area is extremely impoverished. Ideally, I'd like to get some value (maybe just the land) for the property but I'm willing to break-even by just unloading the property.

Thanks for any advice you have for me.

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16
Yes you can sell a home that is not up to todays code, Call us 303 327-5898, our family helping yours.

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0 votes Thank Flag Link Sat Feb 1, 2014
Tim,
Even many of the newest buildings do not pass code but slip by the city inspector. As an inspector and architect I advise many clients on this issue. It is not about passing or failing but how the buyer wants to proceed knowing what is not to today's standards. Sellers can list on an "as is" basis but may have to come down from the median price to give the buyer equity to repair and update the property.

I do preinspections for sellers to give you a chance to repair defects at a cheaper price than the money you will spend in a rush to get the deal done or the money taken off the sale price.

Ty Morozs
Certified Inspector
Level Home Inspections
Web Reference: http://Levelhi.com
0 votes Thank Flag Link Sat Feb 1, 2014
Hello Tim-

Have you been able to take care of your parents property? I'm so sorry to read that your parents were taken advantage of.

The answer to your question is yes it can be done.

I would be happy to send you a comparable market analysis if you haven't received one yet.

With Respect,

Angelica Molina,
Realtor, CDPE, REO Agent
Keller Williams Preferred Realty
303-53907670
303-808-4410
Amolina@kw.com
0 votes Thank Flag Link Mon Aug 12, 2013
Yes you can sell a home that is not up to code.
0 votes Thank Flag Link Sun May 5, 2013
I will be more than happy to send you a free market analysis that will give you an idea of what the house is worth and how long will it take to sell. Shoot me an email with the address and I ll email you back today this info. Yolivarela@Gmail.com. then you decide what to do. Thanks for asking in TRULIA and good luck with whatever you do. Yolanda
0 votes Thank Flag Link Thu May 2, 2013
Hi Tim,

My answer is short and sweet. Yes you can and the market is HOT! The market has changed so dramatically over the past few weeks that what may have seemed like lemons in 1992 can potentially be made into lemonade in 2013. Get a valuation from a couple of Brokers and see who you gel with. Move your parents forward. If you do not have a referral or know a Broker and would like more info my contact email is jeff@areapros.net take care!
0 votes Thank Flag Link Wed May 1, 2013
Hi Tim,

Sorry to hear your parents were taken advantage of. The property can be sold, you must disclose all the material defects that you / your parents know of to potential buyers. Your potential buyers will probably use either cash or conventional loan. An investor would be most likely to purchase it at a discounted price that you and the buyer negotiate. I highly recommend you use a realtor (myself or another realtor) to help you get through this. I wish you the best with this, I would be happy to discuss this more with you and your parents.
Thanks,
Tom Geffre
303-733-0015
0 votes Thank Flag Link Wed May 1, 2013
Hi Tim,

Not to sound glib, but sure, you can sell anything to the right buyer. In this case, as others have noted, you'd probably be dealing with someone experienced in fixing up homes for resale, and who deals in cash. A traditional buyer purchasing with a loan probably wouldn't want to take on such a project - nor would their bank likely approve a loan if the property is in such disrepair. But there is no law or regulation that says a structure has to meet current codes in order to be sold. (There *is* a law that says you need to disclose any material conditions you know about though!)

As it happens, I do work with some folks who do repairs and flips - and they're actually looking for their next project! Give me a call and we can come out and take a look. :-)

Thanks,
Tony
720-427-4836
0 votes Thank Flag Link Wed May 1, 2013
Hello Tim! All the anserws below are spot on and I second Joetta's response to shady Realtors. It goes to show you how important it is to get to know your Realtor or agent. Unfortunately there are bad apples in every industry but I know a lot of agents who are ethical, diligent and their main focus is their clients not the bottom line. That being said, Denver continues to move forward with public transportation, culture, economy etc... you would be surprized at what home prices are commanding now. The most important thing would be to know the value of the property and not leave any money on the table. Take your time shopping for an agent, get a few comparable market analisis. Market the home "as is", DISCLOSE all items you know are defected and off to the races! I know of a few people looking for properties similar to the one you describe and would appreciate it, if you keep me in mind if you choose to sell. Good luck and best wishes!
Jesse
0 votes Thank Flag Link Wed May 1, 2013
Tim,
Given the shortage of inventory in our market today... a house priced for it's condition sells fast. There ARE buyers for EVERY home... the question is merely what "terms" do you offer in your sale. If the home will not meet FHA/VA guidelines... don't offer those terms. Offer CASH and Conventional terms...and disclose the items on the Seller property disclosure document that your parents know for sure. Buyers should do inspections.... whether they are investors or owner occupants! Cash buyers may waive inspections & an appraisal if they feel their own assessment is comprehensive enough to feel comfortable buying the property. Most agent's will be able to advise you on financing requirements for FHA/VA terms.. It would be in your best interest to have more than one opinion.
If you consider accepting an offer that has Conventional terms... there will be an appraisal but if your buyer has 20% or more down....the repairs needed may not be "financing conditions" and that is the key for you if you decide to accept an offer w/financing terms. Work with an Agent that knows your market area well... I hope that you get sound advice on this transaction to reaffirm for you that there are good Agents out here!
0 votes Thank Flag Link Wed May 1, 2013
Tim,
I can appreciate your situation. The type of Buyer who would like to invest in the property you've described is a cash buyer. Believe it or not, we have lots of cash buyers in this market. So, the answer is, yes, you can sell a property which is not up to code but it might take an investor rather than a buyer who is getting a traditional loan.
There are a lot of unknowns in your question. I would be very happy to talk to you, to look at the property, and to help you figure out what is best for your parents. I've been in the Denver real estate business for over 20 years so do have a lot of experience plus teach real estate law classes. I'd be glad to help you! Please give me a call or Email at your convenience.
Kayla Okafor, MBA
Denver Real Estate Connection
Owner/Employing Broker
Ofc: 303-455-0244, Cell: 720-296-2949
drckayla@aol.com
0 votes Thank Flag Link Wed May 1, 2013
You can sell the property at a discount and sell 'as is'. There are lots of investors out there who would probably love a home like this and may pay cash - I myself have a few. You may run into problems if you have a Buyer who requires a loan, especially taking out those who would go FHA financing. But it is certainly a viable option for you. Call me with any questions
0 votes Thank Flag Link Wed May 1, 2013
First of all, I'm sorry to hear that your parents did not receive proper representation from the real estate agent they worked with when they purchased the house. I hate to hear that, and I hope all works out well for them in this move and new home.

Now on to your questions - Homes that don't meet code sell all the time. How much of a financial impact the issues will have on the house depends on the issues. I could advise you better if I knew more detail.

Also, there's a fallacy about a house 'passing inspection'. The inspector doesn't 'pass' or 'fail' a house. He notes all the deficiencies he can find, then the buyer decides if they want to proceed with the purchase or not, or maybe they'll try to negotiate some repairs or a lower price.

The key is to disclose every issue the sellers know about, so the buyer has all the information to make a proper decision.

And, of course, to hire a reputable REALTOR who is familiar with the area where the home is located.
0 votes Thank Flag Link Wed May 1, 2013
Yes. Just be truthful about anything you actually know is wrong. I have investors looking for properties like this everyday.
Web Reference: http://www.my5280homes.com
0 votes Thank Flag Link Wed May 1, 2013
You can sell as is. Some buyers will not qualify based on their loans ie FHA. It looks like you have something an investor would jump at. I would like to take a look myself.

Dan
720 299 3538
0 votes Thank Flag Link Wed May 1, 2013
You should be able to sell anything; you just have to DISCLOSE any material fact which will impact the value of the home.
And, you will need to price it accordingly.
A lot of people are looking for houses like that.
It will limit the type of loan that the Buyers can use, but it is doable.
0 votes Thank Flag Link Wed May 1, 2013
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