The Dos and Don’ts of Going to Market for Sale

by | May 24, 2017 | Blog

A realtor friend of mine once told me, “As soon as a house is listed on the MLS, it’s the belle of the ball.” If it looks good online, agents in the area will want to show it to their prospective buyers. As the saying goes, “you never get a second chance to make a first impression.”

To make sure your house is ready to go, be sure to consider the following Dos and Don’ts to get your house sold as fast as possible:

  • Do make sure that there are no punch list items remaining, the property has been cleaned and staged if necessary, and all of the landscaping looks great. Don’t list it early or ahead of it is 100% complete.
  • Do a thorough review of the comps with an appraiser or experienced broker that knows the area, to determine what the property can be sold for based on the current market value with the improvements you have made. Don’t overprice the property! Doing this can have a negative impact on activity.
  • Do hire an experienced agent that understands the market in your area, and meets the following criteria stated in this blog here.
  • Do make sure your agent uses CSS (Centralized Showing Service) so the showings can be automated and tracked. This makes your property easy to show. Don’t hire an agent that has to be called directly to set up a showing at a specific time. This makes it difficult to show the property and receive offers.
  • Do follow up with your agent within a few days after your house goes live on the MLS to see how many showings you received. Showings indicate that you are priced correctly. If you have no showings, you are probably priced too high.
  • Do follow up with your agent to hear what the feedback is from the showings (i.e., everyone liked the house and said they were submitting offers, bedrooms were too small, etc.).
  • Don’t drop the price by a large percentage of you are not getting showings or offers. Large price drops can give the impression that something is wrong with the property, and not just that you are priced too high. You and your agent should determine the process ahead of time regarding price reductions. Use an experienced agent to help you with this.
  • Do try to make that first offer work. 

If you follow these steps, rest assured that you’re bound to get the highest possible offer in the shortest possible time in your market.

If you are in Texas looking for an experience Hard Money Lender Near You, contact us today!

Three Reasons “For Sale by Owner (FSBO)” Is A Mistake!

by | Feb 2, 2017 | Blog

The more time you spend in real estate, the more you will see things and wonder if they make sense or not. One of those is certainly the decision to list your property on the MLS with a broker or go the other route: For Sale by Owner (FSBO). When I was getting started, I thought FSBO was a great way to market a property and didn’t see any value in using a real estate agent. At the time, I didn’t think it made sense to pay someone a commission just to list a property. I have a sales background, so why would I let someone else sell my property when I can do that myself. Once again, this was one of the things I learned the hard way.

Early in my investing career, I sold many houses FSBO, which skewed my thinking even more. The first few I sold were rentals I had owned for a while, and it was during a time when financing was becoming easier to obtain. You are likely very familiar with the story of subprime lending and the subsequent mortgage crisis that followed. If not, well, it was very easy to get financing which made it easier to sell houses. This made selling to tenants customary. If you didn’t sell to a tenant who was looking to buy, they were eventually going to vacate because they had seen their friends, neighbors, and co-workers get mortgages, and they too wanted the dream of homeownership.

Selling FSBO does the following:

  1. Limits your market exposure
  2. Taints the market’s perception of you and your property
  3. Costs you more than hiring a real estate agent

Limits Exposure

Think this through with me: If your property is not on the MLS, it is receiving ZERO market exposure from every other broker/agent in town. If all you have is a sign in the front yard, you only get local traffic. No exposure means no buyers. Why would you limit yourself to such a small buyer pool? Even if you paid too much for this deal, or repairs spiraled out of control and you are going to lose money, you still need to move the property of your books as quickly as possible. The fastest way is with an agent/broker listed on the MLS.

Taints Your Property

There are two things going on here with regard to perception:

First, you are being cheap and don’t want to pay a real estate commission. Whether that is true or not, that’s what is going to be perceived. This will certainly prevent many agents from even showing your property to one of their clients, because they know they are going to have to deal with you personally (and not another agent), and they will have to negotiate some form of compensation/commission with you.

Second, if the asking price for the property is higher than the average sales price for the area, and/or is in an area that is more affluent, the perception will be that your property is not worth it. But you just spent $20K on the hardwood flooring, $18K on the custom cabinets, and $15K on the appliances. You put travertine in the kitchen and baths, modern chrome fixtures, and a number of other upgrades. No one knows this because they would have to call you to get the info. You are asking $750,000 for this house on the same street as another house that is listed with a local, brand named brokerage sign, who also has a stellar reputation. That house has a description of the same things in yours, but theirs is on every real estate site on the Internet. When buyers drive by, they see your $3 sign you bought from Home Depot that says For Sale By Owner with your phone number scratched in the white space at the bottom. Please don’t do this!

If you think that all an agent does is enter the property address and description in the MLS and wait for the deal to close so they can get a commission, you are absolutely mistaken. If that’s all your current agent does, it’s time to go out and find a good one. I can personally guarantee you from experience, this will make all the difference in your ability to make money flipping properties.

Costs You More

In most cases, you are going to have to pay someone a commission to bring you a buyer as most homes are sold by agents/brokers that are listed on the MLS. Also, in most cases, FSBO is going to keep your property on the market for a much longer period of time. The longer it stays on the market, the more interest, utilities, and property taxes you pay, along with the more landscaping you have to maintain. If you don’t have any experience working with buyers, you may end up going with someone who is not really approved for financing, wasting even more time. It’s much safer and faster to list the property on the MLS, with a good real estate agent, as it will certainly be more profitable.

If you have a property deal and you are looking for an award-winning hard money lender in Austin, please contact us today!