OK....You've got it rehabbed.....Now how do you get it SOLD!!!!!

Random Ramblings
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I was asked this question by a member and thougth this might benefit a lot of people here.

Finding and rehabbing properties is pretty cut and dried…There’s TON’s of info here on each subject…But surprisingly…NOT A LOT ON SELLING.

Most people use a realtor to sell their properties…There’s a few LITTLE things you can do BEFORE signing a listing agreement that will REALLY OPEN your eyes and make the sale a lot easier.

First off…SEVERLY LIMIT THE LISTING TIME…I NEVER give a realtor more than a 30 DAY listing…I also TELL THEM about the 30 day rule, BEFORE I ask them to give me their listing price…Obviously YOU should already know what that price is…Or you didn’t do your homework when you purchased the property.

I tell my realtors all the same story…“You’ve got 30 days to get an offer, if you can’t get an offer in 30 days on a completely rehabbed, properly priced house…I’ll do it on day 31 without you”

It sounds cold but you want these people to know you DON’T PLAY GAMES…This also has another HUGE benefit…It keeps you from getting what I call a “get the listing selling price” This is a price a realtor THINKS you want to hear…It’s high so they can sell HOPE to you…It’s ALSO accompanied by a 6 month or 1 year listing agreement…If you fall for this THEY WIN and YOU LOSE…You lose because the first TWO WEEKS a new listing hits the MLS is when ALL the eyeballs are on it. You don’t want to blow that by OVER PRICING the property. Remember…If you sign a long term listing agreement, the realtor OWNS YOU…THEN you’ll hear this…“Well I think it may be OVER PRICED based on what I’m hearing…Let’s drop the price and see what happens.”

A 30 day listing agreement gets REALTORS OFF THEIR CANS, makes them work, and it gets you a REALISTIC listing price (which should be UNDER the comps) You want your house UNDER area comps because in my experience, THAT will get you OVER ASKING OFFERS…OH YES…EVEN IN THIS MARKET…An AGGRESSIVELY PRICED HOME GETS EVERYONES ATTENTION!!! Especially if it’s completely and nicely rehabbed!!!

Second…ALWAYS USE A LOCAL REALTOR…I want a realtor that knows THAT NEIGHBORHOOD…STREET BY STREET…When I say LOCAL I mean WORKING IN THE TOWN THE PROPERTY IS IN.

Third…THE LISTING ITSELF…I ALWAYS put this in my listings…

ALL OFFERS SUBMITTED TO OWNER ON x/x/xxxx (the date should be day 28 of the listing) This does TWO THINGS…First it creates a sense of URGENCY on the buyers part…Second it protects YOU because it doesn’t say you’ll ACCEPT an offer on that date…Just that offers will be submitted to you.

LAST and MOST IMPORTANT…

PRE-APPROVALS ARE COMPLETELY WORTHLESS…JUNK…DO NOT BELIEVE ANYTHING WRITTEN ON ONE…You want to have a MORTGAGE EXPERT on YOUR SIDE pre-approving your buyers…BANK OF AMERICA, WELLS FARGO and other BIG BANKS are NOTORIOUS for handing out Pre=approvals that are WORTHLESS…The problem for YOU is this…If you SIGN a P&S based on a JUNK PRE-A…YOU’RE SCREWED…That buyer can TIE YOU up for a LONG TIME…All while REAL BUYERS are WALKING AWAY…Discuss a clause in the listing agreement where pre-approvals will only be accepted from certain banks…This will scare off the idiots, but anyone that is a real buyer won’t have a problem getting another bank to review their credit. IF THEY BITCH…RUN…RUN AWAY FROM THEM.

One last item…Discuss ALL of this BEFORE you sign a listing agreement…You’d be AMAZED at the crap realtors will try and pull on you AFTER they own you for 6 months…DON’T FALL FOR IT…

This property is YOUR HAD EARNED PROFIT…Don’t let some nit wit with a leased Mercedes tell you they know more about real estate than you do…THEY DON’T.

My favorite quote I use with my realtors…

“Realtors don’t SELL real estate…PRICE sells real estate.”

100% TRUE…TRUST ME!!!

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great info…thanks for posting.

-Mike

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I can tell you guys from experience that the first time you lay this on a realtor you may want to wear some kind of shield…Because from the look on some of the faces I’ve seen I thougth HEADS WERE ABOUT TO EXPLODE…

If you see that expression…MOVE ON TO ANOTHER REALTOR!!! F A S T!!

But for the ones with REAL experience…Their EYES will light up!!! They see the BEAUTY in this…They’ll also see a CLOSING CHECK IN ABOUT 45 DAYS!!! And they’ll KNOW IT!!!

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Fdjake,

Great info… thanks!

Specifically, in some of your posts, you talk about having your buyer already in place before or during your rehab… obviously, a realtor wouldn’t be involved here… so how are you getting these buyers? If advertising, how are you drawing them in? What’s the hook?

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Your best source of buyers BEFORE you finish the rehab is right in the NEIGHBORHOOD the house is in!!!

I’ll send out fliers to the entire neighborhood (people ALWAYS want to see how the house is coming out) I’ll invite everyone by on a Saturday and Sunday from say 12pm to 4pm and as they come in they get a $3000 COMMISSION BONUS CHECK…Payable upon THEM sending me a BUYER…I explain that they can get the same split commission a REALTOR gets IF they bring in a buyer BEFORE I have to list it…This is a CAPTIVE AUDIENCE…They WANT to see what you’ve done to the house…and REMEMBER…PEOPLE LOVES STORIES…Your experience with the FOUNDATION on this house is PERFECT…Make sure you have plenty of pictures showing that NEW FOUNDATION…I can hear those neighbors telling their friends…“This guy didn’t fool around he rebuilt EVERYTHING in that house…even the foundation is brand new.”…If you replaced it…TELL THEM…and explain WHY…It’ll all get REGURGITATED back to their friends looking for a house!!

The beauty of this is most people have FRIENDS that have FRIENDS that know someone looking for a house in your area…NO BETTER SALES PEOPLE than those already living there.

I’ll also start bombing CRAIGSLIST with ADS a few weeks before I finish the project…This does 2 things…It let’s me TEST PRICING POINTS and I can gauge reaction to the rehab…

DO NOT under estimate CRAIGSLIST…I test market almost every property I sell on there BEFORE listing it…If I put a house on there and get 20 emails on a weekend I know I have a winner!!!

The other buyers just come from doing this for YEARS…I always have a list of people looking for something…I do TON’S of advertising and people just call looking for certain types of homes. When I get a buyer BEFORE I buy a property it’s usually someone that MISSED a previous house that sold to another buyer…I’ll make a detailed list of what they want and their price range…At that point I’ll call them when another property comes to me…We sit down, decide what they want, and it’s SOLD before I’ve even closed on it sometimes…Most people are buying NEIGHBORHOODS…If you can show them before and after pics of houses you’ve done and they’ve actually BEEN to some…they know what you do and are just happy to get first crack at it.

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Fdjake,

Again, great ideas…

I get developing contacts over the years, but when you advertise, what is your target audience? What do you say? I could very easily take a house and make it what they want… but what are you saying to get them to call?

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RE READ POST #1

“REALTORS DON’T SELL REAL ESTATE…PRICE SELLS REAL ESTATE.”

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I definitely liked the idea of giving a realtor the listing for thirty days before you flip it to other investors. Good idea… mad props for that!

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Good post jake. And you’re absolutely right, there’s tons of info regarding the purchasing and the rehabbing of properties, but people forget that they have to DO SOMETHING with the house when its completed. I do almost everything that you listed as far as marketing goes-

  1. Offer a higher co-broke commission than everyone else. In my area its 2.4% that’s average, I offer 3.5%.
  2. Bandit signs for the house. Sound desperate on the signs-Trust me people will call you if they think they can get a good deal from you.
  3. Email blast to realtors. I just signed up with a company that sends out eflyers for a PENNY per flyer! I can reach thousands of realtors for just a couple bucks.

Keep up the good work!

ps- I was also thinking of signing up for a first time homebuyers workshop and handing out flyers for my props there!

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FD,

Great post man!!Hey u think that tactic will work on my realtor?She’s my wife and don’t charge me commission,but man I’d love to sell in 30 days.LOL!!Nah,just kidding she does great.I like to add that having a realtor that knows a little about construction is a big plus also.

And you are so right on if they give you the “deer in headlights” look when you drop your tactic on them.Those are the ones that you’ve really confused and need to move on to a hustler who’s ready to move as fast as you are.

I’m closing on two houses next week and hope to have them ready in march, sold in april.Should I say hope or I will,sounds better anyway.LOL!!

Great post again,thanks.

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very good information about how to deal with the realtors…thanks.

If you would like to try selling it on your own…here is a thought. I like to call this the “milliondollar AD”…it is a real simple concept.

Take out a thumbprint Ad (the size of your thumb)…in a local or city paper…at the top put something like “Foreclosure Special”…or “Rehab Special”…then include baths/bedrooms, and (SQ footage if you like…)…then put your phone number…you want your ad to be simple yet stand out from the others…the most important feature of the AD will be the price you post…you want it to be a real eye opener…try to post a price less than what you would really like to sell it for…the idea is to get as many people as possible to call you due to the simplicity and the real low price.

Now, they should call you…they will have lots of questions, and they will want to get them all answered on the phone…dont do this…you want to be polite yet stern, and simply tell them that you are real busy, and give them the weekend day of the openhouse you will be holding…they must come to the open house to get more info…otherwisee the ad wont work for you…just tell them so many people have caled and you are real busy, and get theri contact info…the idea is create “urgency”…you want to get as many people as you can to the open house to create urgency and a buying buzz…the more the better

At the open house…the amount of people will create a sort of greed (for lack of a better word)…among the people…if someone is interested, and others are also looking at the same item (or home in this matter)…it is only human nature that they will want the house even more…they do not want to lose it to someone else…so they should offer more if you did this right…legally, as long as you identify all the people who are at least willing to offer the asking price., you can have a little mini auction right there on the property…the person who is willing to pay the most and has down payment and good credit wins the house

the important thing is urgency, getting people to the open house on a designated day, simple yet effective ad, try posting it in more than one papers at a time…keep all people who call in your logbook…this will be great people to call when you buy your next property with all the money you make off of this one

This may be worth a try if the realtor thing is not working in your area