Speed is a real estate investor's best friend. Every month that a renovation project sits on the market means yet another loan payment, yard maintenance cost, homeowner association payment or other fee that will have to be deducted from your profits. Here's how to get the highest price in the shortest time for YOUR flip....
Price it Right
The worst thing that a real estate investor can do is to price their fix and flip too high. According to Biggerpockets.com, a common mistake for REIs is to price their house above what they believe it is worth to leave room for negotiation. This tactic might work on a standard sale where a homeowner has more time to market their house and more time to wait. But when it comes to flipping, veteran REIs advise that you should price your project so that it is one of the most competitive in the neighborhood. Why? Because by doing so, you're likely to get more showings. And the more showings you have, the better your chances are of getting an offer or even multiple offers which can actually drive up the price.
Staging is Key
Most buyers have a hard time envisioning their own things in an empty house, so it's important to stage your flip to give it a warm and inviting feel and help buyers visualize the best layout for each room. Studies have also shown that staging can help you sell your property faster. How much faster? According to the Real Estate Staging Association, staged homes will spend 73 percent less time on the market and will also typically sell for more money than those that are not. Staging can cost anywhere from a few hundred dollars for a small apartment to a few thousand for a large home. But the higher average sales price along with the fewer days on market means you make your money back and then some.
First impressions are everything. Your flip was very recently a construction project, filled with the sights and smells of construction debris, sawdust, paint and more. Now that repairs are complete and the dumpster has been hauled off, it’s time to focus on the details and make the property shine. Hire a cleaning service to clean everything from top to bottom, inside and out (don't forget windows). Then stand back and view the home from the curb. Make sure all construction debris is gone and the ground is re-graded if necessary. Depending on the season, lay mulch, plant flowers, or install window boxes. Trim and mow. Reseal the driveway if necessary, or install a new door knocker or house numbers. Look for whatever little touches will make the home stand out and sparkle.
88% of all buyers start their search online. So make sure that your online listing is filled with high-quality, professional photos that will attract the eye of prospective buyers. The few hundred dollars you will spend on a professional photographer will pay off by driving more potential buyers to your home. Augment your MLS listing by cross-linking to your and/or your Realtor’s Facebook and Pintrest accounts. Most Realtors have their own websites and blogs where you can feature your project. [If yours doesn't, you might want to read our blog 5 Signs Your Real Estate Agent isn't the Right Fit] Also don't be afraid to tap into any neighborhood list-servs to get the word out to neighbors.
Buyers often look at dozens of houses during their search for a new home, so if you want yours to stand out and sell faster, include at least one thing that will make your house stand out. Maybe it’s a new wall-mounted flat-screen TV that is included with the sale of the home, maybe it’s a year’s worth of prepaid house cleaning or lawn mowing, or maybe it's a home warranty. Choose a feature or offer that will make your house more valuable than other comparable homes and more memorable to buyers.
First and foremost, remember that time is your enemy. The longer your home stays on the market, the more it costs you.
Brought to you by Walnut Street Finance, providing hard money loans for fix and flip projects in DC, MD, VA and DE.