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!!!