Brandon: This is the BiggerPockets podcast Show 261.
“There’s this tip that I have heard from a lot of real estate agents about how you wanted to get as many people as you can through the house. No. You don’t win a prize for having 500 showings and no offers. You want to get as many targeted people into your house as possible”.
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Brandon: What is going on everyone? This is Brandon Turner, your host today on the BiggerPockets podcast, here with not just my co-host today, Mr. Scott Trench, but also my guest/co-host, Mindy Jensen. How are you guys doing?
Scott: We’re doing great.
Mindy: I’m doing wonderful.
Scott: I’m doing great.
Brandon: Okay, good. So today’s show, obviously beginning a little different than normal. Normally, we talk bad about the guests ahead of time and then we get them on the call. I’m just kidding. We don’t usually talk bad about people but we talk behind their back and then we bring them into the interview.
Today’s a little different because our guest today is also somebody who regularly—is that the word, regularly—hosts the BiggerPockets podcast as well, and that is Mindy Jensen here. So our guest and our guest host today, if you want to call it that, is Mindy. But before we do that, let’s talk bad about Mindy behind her back. Scott, what’s up?
Scott: Hey, Brandon. Well, talking about Mindy behind her back, she has actually had a heck of a past couple of months, between hosting a bunch of BiggerPockets podcasts, continuing to do all the Community Management stuff, doing some sort of writing project—I think we’ll hear about that in a few minutes—and launching another podcast, which she is also the host of.
Mindy: Wait, what’s that other podcast called, Scott?
Scott: The BiggerPockets Money podcast where you talk about personal finance and building the foundation from which to begin investing in real estate and other big ticket investment items.
Mindy: Yeah, I’m really excited about that show. It’s a great, fun show. It’s related to BiggerPockets but not related to BiggerPockets in that we talk about real estate all day long here. Money’s a big part of that. If you can’t finance a property, if you can’t afford to buy a house, you’re not going to buy it. You’re not going to get started investing in real estate and on and on and on.
So yeah, the BiggerPockets Money show is a great way to learn about money, how to fix your financial house so you can start investing. We also talk about different ways to invest. I know this is blasphemous on the BiggerPockets podcast but real estate is not the only way to invest your money to grow your wealth.
Mindy: Blasphemy. That’s the last time I will talk about anything other than—
Scott: The point of all this though is that Mindy is the busiest person on the planet right now and you’re going to hear a little bit about the things behind what she’s doing in this upcoming show, right? Isn’t that right?
Mindy: Nah, I’m not going to tell you about that.
Brandon: All right, so before we get to the show today. Actually, today we’re going to focus in on one topic. Normally, we do interviews and hear people’s stories. Today, we’re actually going to zone in on a topic and talk about how to actually make more money when you sell properties and how to reduce your stress. It’s something that we all have to deal with in our life with real estate investing. It’s something I’ve been dealing with a lot lately as I’m selling some of my earlier properties.
A lot of you guys don’t know—Mindy is actually a licensed real estate agent and she is an awesome real estate agent and she knows how to sell houses. So that’s what we’re talking about today. But before we get into that, let’s get to today’s Quick Tip. I was waiting for you.
Mindy: That was really awful.
Brandon: Good job. All right, so today’s Quick Tip is actually—three months or so, I did a podcast here on the BiggerPockets podcast alone. It was called The 90-Day Challenge: How to Buy Your First Property Before the End of the Year, or something like that. Anyway, a lot of people have done just that. In fact, I get e-mails almost every day because now here we are, 90-ish days later and people are like, yeah, I took the 90-Day Challenge and I bought a property.
So here’s what I want to ask. If you are somebody who did that, who went and took the 90-Day Challenge and went out there and bought a property in those 90 days, do me a favor and let us know. Actually shoot an e-mail over to [email protected] . What I want to do is actually put together a special either a whole episode of the podcast or maybe just a piece of a podcast, not really sure yet, just with some stories that people—about what they did during the 90-Day Challenge. It’s kind of a way to encourage everybody together.
So if that’s you, shoot an e-mail over at [email protected] and just say, hey, I took the 90-Day Challenge, and then they’ll make sure they get that over to me. So with that, 90-Day Challenge, hit them up. But yeah, congratulations to everyone who did that. We will be doing another 90-Day Challenge here. I mean, you don’t have to wait for a 90-Day Challenge to buy real estate but if you want to join kind of a community to do that, we’ll be doing another one here shortly. Make sure you guys pay attention weekly to BiggerPockets.com/webinar and you’ll see information there when it comes up.
So, with that, let’s move on and talk about today’s sponsor. Today’s episode is brought to you by our friends at RealtyShares.com. I love these guys. RealtyShares is a real estate crowdfunding platform that allows accredited investors to invest in pre-vetted real estate deals online. So investors can browse and invest in both residential and commercial properties that yield returns 8-16% annually. As a RealtyShares member, you can passively invest in professionally-managed real estate investments in a variety of asset types and geographies for as little as $5,000. All from the convenience of your own living room. So to learn more and to get started with a free account, just go to BiggerPockets.com/RealtyShares. That’s BiggerPockets.com/RealtyShares.
All right, a big thanks to our sponsors always and with that, I don’t know. I don’t really got anything else, Scott. Mindy, should we just jump into this content? People want to hear how to sell their properties. So you guys up for it?
Mindy: Bring it.
Brandon: All right, so today’s guest is Mindy Jensen and we’re going to do something fun here. I’m going to actually try to pretend I know Mindy’s entire back story, like I remember it from when we interviewed her on the podcast. You’re going to tell me, am I hot or cold, Mindy. You ready for this?
Mindy: This is going to be great. I bet you’re going to remember every single thing about me from Show 129.
Brandon: Oh, that was a long time ago. All right, so Mindy Jensen was born in the Midwest.
Mindy: Wow, yes.
Brandon: Okay, and she was actually an only child. Yes?
Brandon: Okay, she had a lot of siblings and she got into real estate when she was in her twenties by buying a house and then fixing it up and selling it. Am I correct?
Mindy: Correct. It was a condo.
Brandon: Oh, condo. Okay. And then she became a real estate agent. And today, Mindy is 29 years old?
Mindy: Yes, 29 years old.
Brandon: And she’s been a real estate agent for 18 years?
Brandon: Okay, and she is an expert at this. That’s Mindy’s story in a nutshell, and Scott, anything you want to add to Mindy’s story?
Scott: Yeah, Mindy has also been investing in real estate for over nine decades. A lot of experience here.
Brandon: Nine decades.
Mindy: Yes. I have this really amazing way to bend math so that I’m 29 years old and I’ve been investing for nine decades.
Brandon: That’s fantastic. That’s fantastic. So, the truth is, Mindy has been a real estate agent for how long?
Mindy: Almost five years.
Brandon: Okay, so in that time, you’ve helped a lot of people sell houses and you’ve sold a lot of houses yourself. I know you guys do a lot of live-in flips.
Mindy: I’ve sold a lot of houses my own self. A live-in flip is when you live in the property while you’re rehabbing it so that you—and you do the work while you’re living there so it’s a nice disaster. But then when you go to sell, you wait two years after you buy the house to sell the house and then you pay zero dollars in capital gains taxes, up to $250,000 if I was single like Scott. Since I am married, I am exempt up to $500,000.
Brandon: Wow, that’s awesome.
Scott: One thing I want to chime in about that is that some people are confused because they were talking about in the new Trump Tax Code whether or not they were actually going to change this rule so that it was going to be four or five years you had to live in your property. They had that one version and from my understanding they do not have that in the final version that passed. You can still do this exact same strategy that Mindy was just talking about and exclude those capital gains up to $250,000 or $500,000 for these sales.
Mindy: That is correct.
Brandon: Which is the number one reason you should get married. Right there, so you can exclude more.
Mindy: Yes. Right there. $250,000 right in the bank.
Brandon: Forget love.
Scott: I forget who said this but someone told me getting married to save money on taxes is like buying an airline to get free peanuts. I thought that was a good analogy on that one.
Mindy: That’s not right at all. It’s totally like getting married to save money on taxes. You save so much money.
Brandon: A ton.
Mindy: I wonder—this isn’t tax advice, I don’t know that you could do this but like, could Scott be a currently single man and buy a property and fix it up and then, oh, I’m going to make $400,000, maybe I’ll just get married and get the exemption. Like, can you do that? I don’t know. That’s an interesting question.
Brandon: I don’t know. If you’re a CPA listening to the show, let us know on Twitter. MindyatBP is your Twitter handle, right?
Mindy: That is correct. Let me know if I’m committing tax fraud. I mean, I’m already married. I’ve been married for forever so I’m not committing tax fraud. But let me know if Scott would be.
Scott: No tax fraud here.
Brandon: All right, so let’s get to today’s show talking about 16 ways to make more money when you sell a house or a property. We will separate this. Now, the reason why we’re talking about this today is specifically because Mindy has a new book. BiggerPockets is publishing a new book and Mindy wrote this book. And it’s called what, Mindy?
Mindy: How to Sell Your Home.
Scott: All right, what’s it about?
Mindy: It’s about DIY anesthesiology? What’s it about?
Scott: Puts you right to sleep.
Mindy: Oh my God. I can’t believe I walked right into that. Unlike DIY anesthesiology, this book will not put you to sleep unless you don’t care about real estate, in which case you’re probably not listening to this show anyways. No. This is the essential guide to a fast, stress-free and profitable sale by me, Mindy Jensen.
Brandon: All right. And we will obviously talk more about this later, about the launch and all of that good stuff later today in the show. But I just wanted to preface on why we’re talking about this topic today. One, because it’s really important, especially right now in today’s economy. Like, the market is really, really good for selling properties. That’s why I’m selling off a number of my properties.
So I’m looking at my portfolio saying, hey, this is probably the top of the market. We’re probably there. We’re close, anyway. Why not sell some of the ones that are maybe underperforming and then wait, when the market crashes, I’ll buy a bunch more and then I’ll sell again.
So this is a very timely episode and your book is very timely as well because we know this is very, very hot right now, this topic. So, without further ado, let’s get to 16 ways to sell your property.
Number one, Mindy, what do you got? What’s your first tip for selling faster or making more or whatever?
Mindy: Making more money. Number one is going to sound like you’re not going to make money off of it but you really are: Have a pre-listing inspection performed by a licensed home inspector.
Pre-listing means before you put it on the market. You go and you have the property inspected by a home inspector. And you’re going to want to do this for a couple of reasons. First of all, it’s not that expensive. $300-$400 will have a home inspector show you exactly what they’re looking at and what the buyers’ home inspector is looking at. If they find something big or not so big, you have the opportunity to fix it in advance.
Let’s say you have a bit of water leaking in through a roof, like a hole in the roof. Your buyer is going to freak out when they see this problem on their own home inspection. So when you go and you have the home inspected before you list it, you have the opportunity to fix this problem. All of a sudden, your roof doesn’t leak, therefore you don’t have to disclose that the roof leaks, because it doesn’t.
Brandon: There you go. So true life story, two weeks ago. Okay, like two months ago, I put a house for sale as a flip I did. I put it for sale. I did not do an inspection ahead of time and so I put it up for sale. I actually never did an inspection when I bought the property. That was mistake number two there.
But I thought, at the time I walked through it, this house was great. It was in really good shape. What do I need to do an inspection for? I mean, I’ve been doing this for 12 years. I’m not saying newbies should never do an inspection. But I was like, this is in really good shape, there’s probably nothing that’s going to come up. I’m just going to go ahead and do it. So I did it. Did the flip. Went to put it on the market. Got an offer right away. Everything was great.
Went down to like a week before closing and the appraisal had come back and the appraiser had seen that there was some rot in a beam that was underneath the house. So then, when we were supposed to be closing, we ended up having to get a contractor in there to go do all this work to replace a beam. It cost me like $1500 or something like that to replace this one beam. Really annoying. Pushing closing out a week, which is money right there. It would have been cheaper to get the inspection but anyway.
Then, we find out on the day of closing after we recorded, that the contractor had lied. He was actually not a licensed contractor. He lied about being licensed. So then I had to send another contractor in to verify all the work and to certify that it was done correctly under their license and bond after the thing closed. Anyway, had a gotten a pre-listing inspection like Mindy just said, I would have avoided all of that and would have probably closed a week earlier and not have that drama and probably saved a bit of money. So there you go.
Mindy: Yeah, thanks for not taking my advice, Brandon.
Mindy: Or maybe this is my fault for not having recorded this show six months ago.
Brandon: You know, I asked you back then and you were like, no, I don’t like you. I hate this.
Scott: Another thing to remember is like, I remember going back to my first purchase that I ever got. I remember relying really heavily on this inspection. Most people are not like people on BiggerPockets who buy many rental properties throughout the course of a lifetime. They’re buying one property, maybe two or three in their lifetime. So when you see, oh, a beam is rotting underneath this thing—that’s like an overwhelming problem for someone who’s never hired a contractor or never done any of this kind of stuff.
And it’s normal day-to-day business for folks like us. And that’s the power of having that inspection ahead of time is yes, avoiding giving the people that are buying this, making this the biggest financial decision of their life cause to worry unduly about these little things.
Mindy: So I’m a big fan of home inspectors. I think that everybody should have a home inspection. Unless you are buying the house to completely knock it down to the ground and rebuild, and maybe even then, you need to have like a foundation inspection. I am not in any way talking smack about home inspectors.
But—here, she talks smacks. Here, she talks about home inspectors. They will always find something. There is no such thing as a perfect house. It doesn’t matter if Brandon Turner himself built it all by hand. It’s not going to be perfect. Sorry, Brandon. So you get this home inspection. They come in and they list everything. They have a really great ability to make something sound like a giant deal.
Brandon: Yes. They do, right?
Mindy: It’s the language they use or whatever. So you find this—they say, there’s no GFI outlet by the sink. And you’re like, oh okay, that’s going to be like $1000 to repair. I’m going to make the seller do it. It’s like a $4 fix. Or maybe $10. I can’t remember what a GFI outlet costs. But like, it’s not a big deal.
On the other hand, if you don’t know what’s going on, if this is your first purchase, you could see all these little things add up and think, this house is just not ever—it’s going to fall apart tomorrow. So, you have the pre-listing inspection as the seller. You see everything that the buyer is going to see and then you have the opportunity to fix it.
Or maybe there’s not that much wrong. You are missing the GFI outlet by the kitchen sink so you go and repair it. You’ve got a very short list with your pre-inspection. You can give that to the buyer and say, hey, here’s the list of the things that the pre-inspector saw. Here’s everything I fixed so now you don’t have to have your own inspection. If I was your agent, I would recommend, yes you should absolutely have your own home inspection. But in a hot market, this could be all that the buyer needs to make the offer. They see you fixed everything. They see that it’s a licensed inspector and they forego their inspection.
I’m not suggesting that foregoing an inspection is the best idea for a buyer. I’m not suggesting that you’re trying to pull one over on the buyer. But it could be—every inspector is different so what your inspector finds, maybe the next inspector will find something slightly different that you didn’t catch, but it’s still totally worth the $300-$400 it costs to get the inspection done.
Brandon: All right. I like it. Good tip. By the way, there’s one more sidenote because I like telling stories. I sold a flip one time, the inspector had written on there, “The siding has failed”. Just like those four words. “The siding has failed”. Well, what it was, there was a little bit of rot in the bottom six inches on one side of the house. Go cut off the bottom six inches and replace it with wood siding.
No, the seller refused to buy the house unless we replaced 100% of the siding because the inspector said, “The siding has failed”. Even when the inspector said, well, I’m just talking about this one section. They said, no, you said it failed. And we ended up spending like $8,000 to get that deal done. And that was when the market was like really crappy so like there weren’t a lot of buyers out there so we had to. Today, I’d be like, no. Screw you. Back then, I was like fine. So we replaced all the siding, repainted the entire house because it had “failed”. Anyways. I love inspectors. Yeah, they’re great. All right, number two.
Mindy: Listen. A home inspector is a good person to have in your toolbox. I will not allow you to talk smack about them.
Brandon: No, I love home inspectors but man, they can make things sound bad. All right, number two. What is it, Mindy? What do you got?
Mindy: Clean up your home.
Brandon: That’s obvious though, isn’t it? Come on. Everyone knows that, don’t they?
Mindy: You know what? As an agent, I got through a lot of houses. I want to keep up on my local market even if I don’t have clients that I’m helping buy houses at this moment. I go through every house that comes on the market in my farm area, in my local town, and nobody knows this tip. Honest to God, nobody knows this tip.
When I was little, my mom made me take off my shoes when I came into the house because she had bought a house with white carpeting. I don’t even know why that’s a thing. And I’m in the habit of taking off my shoes as soon as I walk into a house. But as a real estate agent, I am firmly getting out of the habit because people’s houses are so disgusting. You walk in the door and you’re like, oh, what is that? Like you take off your shoes because you’re not thinking and you step on something crunchy or gritty.
Don’t have dirty dishes in the sink. Don’t have—clean your floors. Sweep and vacuum. Or hire somebody. Cleaning up your house just automatically puts your house head and shoulders above every other property because they’re not clean. Nobody understands how to clean. This also applies to decluttering. Nobody wants your stuff. When you move out, all of your stuff is going to be gone. If you are a landlord, this is going to be a little bit different. If you’re a flipper, all of your tools need to be picked up. Everything needs to be gone and even if you’re just showing an empty house, have it cleaned. Sweep the floors. Don’t look like a gross house.
Scott: And I’ll say, if you’re like me, I’m not a very clean person. In fact, as I’m recording this podcast, I’ve shoved all of the crap in my office just below the snake line of this computer. I’ll give you a quick little glance of the piles of junk in here. Hire a professional to clean your place because they’re just going to be able to do it in a very efficient manner and move all of the junk out of the way. I do that before I list any of my properties for rent and I certainly do it before selling a place.
Mindy: And it’s not that expensive to have somebody come in. They’re really good. They’re really efficient. If you don’t want to clean—I wouldn’t say you’re not a clean person, Scott. I would say you’re not the tidiest person I’ve ever met in my entire life.
Scott: You should see my car.
Brandon: I have seen your car. It’s beautiful. Yeah, I’m a big fan of that. In fact, that was one of my favorite thing—my favorite first outsourcing gigs in my life. Like, when I would do houses, whether rental or flips. When I started outsourcing the cleaning, I realize that professional cleaners charge like nothing. I feel bad—they make like nothing, and they do a really good job, a hundred times better than I could ever do.
So like at the end of the day, you have like a bill for $150.00 and they worked for a whole day. And I’m like, wow, you did an amazing job. It would have taken me a week to clean that house. But I’m always surprised. It’s not like a high-paying job, like $15 bucks an hour, maybe $20 bucks an hour, you can get most people to clean your house for. Anyways, so get a house cleaner.
Mindy: Definitely hire a house cleaner if you’re not willing to put in the time to do it but you know, get rid of your stuff. Let’s say you’re having a personal property that you’re cleaning. You have things in your house. Nothing in your house is going to stay there. Your table’s not going to stay there. Your pictures aren’t going to stay there. Your dog isn’t going to stay there. Pick up all these things that you don’t need every day and put them away. Get a head start on packing and get the stuff out of your house. You want it to look like nobody lives there.
Brandon: Yep. There you go. All right, number three. What do you got?
Mindy: Does it pass the sniff test?
Brandon: What’s the sniff test?
Mindy: My neighbors—the sniff test is when you walk in and you’re like, eww. That did not pass the sniff test. My neighbors are selling their house. I know they have two big dogs because I live right next door to them and I went and viewed their house anyway, and I walk in and I’m like, oh, my God! It smells like wet dog in here. Like the dog had been out for a month and came in. It was really gross. I showed it to a client.
The next time I came in, it was very flowery with an undertone of wet dog. Nobody is going to walk into your house and say, wow, your house smells like garbage! But if your house smells like garbage, the people that are walking in to buy it are going to walk right back out again and say no, thank you. Or they’re going to offer a really, really low price. Like, what do they say—cat pee smells like money, on BiggerPockets in the forums? They walk in, smells like money. It doesn’t smell like money to you as the seller. It smells like money to the buyer because they know it’s not that difficult to get rid of the smell. It isn’t that difficult for you to get rid of the smell either.
So ask your real estate agent. Ask a trusted friend who will come over and give you an honest opinion. What does my house smell like? And if they say anything other than, wow, I don’t smell anything, you need to fix it. You can rent something called an Ozonator at a big box home improvement store. You can go through and—what are some other ways to deodorize your houses—dishes of vinegar. Little dishes of white vinegar around the house , the vinegar kind of sucks up the smell. Dishes of charcoal briquettes will also suck up the smell.
I had an aunt and uncle who used to smoke like crazy. And when they’d come to my parents’ house, they’d just smoke in the house which I think is weird now but at the time it was like the thing. And then every time they’d leave, my mom would put little dishes of vinegar all over the house and these little plates of charcoal briquettes and it would take a couple of days but the smoke smell would be gone.
Brandon: I never knew that.
Scott: One thing I’ve also heard is some folks won’t like the smell of like the cleaning materials as well so if you’re doing a lot of cleaning, at the same time, to try to remove the smell which is probably going to be happening at the same time, the tip was, bake a bunch of cookies. I don’t know if I’m going take that tip but if your house smells like fresh baking, that can help maybe overpower some of these other cleaning materials and those kinds of smells.
Mindy: Yeah, that’s a good tip, too. And no—that’s a really good tip because when you walk into a house and somebody’s been baking cookies or baking an apple pie, it smells amazing. And you don’t even have to actually bake something. You can just put a couple of caps of vanilla into like a baking dish and stick that into the oven for a few minutes. It makes the whole house smell beautiful and you don’t actually have to cook anything.
Scott: Quick Tip.
Mindy: Quick Tip! So I would caution against just using air fresheners. Those start to get really sickly sweet and sometimes you can walk in and be like, oh, I can taste that air freshener. It’s too strong and overpowering and it doesn’t remove the smell, it just covers it up. Oh, we are all three idiots. What about Febreze? Have you ever used Febreze? I actually bought a car once, which is not a house but it’s the same thing—I bought a car and the guy before me—
Brandon: To some people.
Mindy: Well, okay. We’ll talk about that later. The guy before me used to smoke cigars in the car with the windows up. It was really gross but I had no money and I had to buy a car. I took a bottle of Febreze and I sprayed it all over the car and it took two entire bottles. It was really, really infested, but two entire bottles of Febreze which is like, what, like $4 a bottle? And every smell was gone in this car.
Brandon: That’s impressive. I mean, that’s what their whole campaign is, right, on the commercials? It’s like, have you gone noseblind?
Mindy: Yes, well don’t go noseblind. Get a bottle of Febreze.
Brandon: Wow. And today’s episode is sponsosred by Febreze. No. Scott, you can get on that. Get Febreze to sponsor the BiggerPockets podcast. All right, number four. What do you got, Mindy?
Mindy: Number four. Take great pictures of your house.
Brandon: So good. Yep.
Mindy: Okay, there is this tip that I have heard from a lot of real estate agents about how you want to get as many people as you can through the house. No, you don’t win a prize for having 500 showing and no offers. You want to get as many targeted people into your house as possible and using things like wide-angle lenses or funky angles when you’re taking pictures of the home aren’t going to change the actual layout of the house. They will get people through the door but nobody is going to buy the house based on the pictures on the internet. They’re going to buy the house based on what’s in the actual house.
So, there’s a house in my neighborhood—I remember this because I actually got on my stomach to try to figure out what angle they shot this room from. It looked like an actual bedroom. Eight-foot ceilings, 10×10 or whatever. It was actually a four-foot nook under the stairs that they had shot with such a crazy angle that it looked like an actual bedroom and I was walking around the house and I’m like, oh, it had a very distinct paint job on the sides. Like, where’s that one room? And I see it under the stairs and I’m like, are you kidding me? This is not a bedroom. This is like, you can’t even put a bookshelf in here.
So don’t take great pictures with funky angles and fancy whatever. Take excellent pictures of your house as it is. If there’s warts on it, show the warts because those are going to show up when people walk through the house.
Brandon: There you go.
Scott: What about lighting?
Brandon: Yeah, I was going to ask the same thing.
Scott: I’ve noticed that when I take pictures that are really brilliantly lit, they just happen to look a little better. Is that something that you’ve found as well?
Mindy: Yes, so actually, in the book on how to sell your home, I give you DIY photography tips. My husband takes pictures of every house I list because he’s a really great photographer. He takes them with like some random camera. He doesn’t have a lot of fancy equipment. But he takes his time. He stages the property. He looks through the camera and takes a bunch of different angles, turns on different lights in different place and yeah, lighting is really important. You have to have pretty much all the lights on.
And some rooms are actually going to photograph better at night versus during the day. So he’ll go back multiple times during the day and take a bunch of pictures. I don’t think it looks weird to have the living room with a picture—I can’t even talk—I don’t think it looks weird to have a living room with a picture taken at night versus the kitchen taken during the day. You want to showcase the house in the best light that you can. The real house in the best light that you can.
Scott: When I bought my first property, it had snowed the day before and the yard was terrible and I didn’t even get to see that because the snow was on top of it. So maybe that helps as well. If you’re trying to cover that up.
Mindy: Yeah, wait until it snows. I would not recommend that as a seller, you wait until it snows. As a buyer, I saw a property when it snowed, the snow covered up the roof problems so then when I went to sell—like, what do you mean it needs a new roof? Let me go back to my inspection. I would have never bought a house that needed a new roof. Nope, it needs a new roof. The inspector even noted, oh, I can’t view this due to snow. I’ll come back. So he came back, he went up on the top and he’s like, yep, needs a new roof. Great.
Mindy: Sorry for that detour.
Brandon: That’s all right. I like it. Number five. What do you got?
Mindy: Number five is a two-parter. Be available.
Brandon: Like, romantically?
Mindy: Be available. Yes. You can’t sell a house if you’re married. Ugh. Scott!
Scott: You can sell a house tax-free if you’re married, I thought.
Brandon: That’s the whole point of what we were doing earlier. Getting married to avoid the capital gains.
Mindy: Okay, be available. Part one of that is be available for any questions. If your real estate agent cannot get in touch with you to ask a question that the buyer has, the buyer may get really frustrated with you and move onto the next house. If your real estate agent can’t get in touch with you for any other reason, you’re going to just harm your sale by not being available for questions. So, share all the information you can with the real estate agent but the buyer is going to have some question that you forgot to share with your agent.
The second part of that is be available for showings at almost any time. Your buyers want to see the house on their schedule. They don’t want to see the house on your schedule and if they’re driving past and they see the outside of your house and it looks amazing because you’ve already fixed it up and they call you to say, hey, can I see the house? “Oh, sorry, it’s not ready” is not a good answer. They’re not going to come back likely. So be available to having showings. That means keeping the house in showing condition at every moment. Even if you have young kids. Even if you have pets. It’s one thing when they’re driving past and they’re like, oh, can we just come in and see the house? Oh, let me just take the dog to the backyard. That’s very different then, hey, we’ve got a schedule, we’re going to show your house tomorrow at noon. Oh, sorry, that doesn’t work for me. You want to sell your house so make yourself as available, and make your house as available as it possibly can be.
Scott: I love it. And maybe you don’t cover this one but what about if you have tenants? How do you get them to maintain a clean house for when you’re trying to sell it?
Mindy: Good luck with that. I think you should incentivize your tenant. What I see a lot of times in the BiggerPockets forums, BiggerPockets.com/forums, is people will say, oh, I’m going to sell my property. I don’t know if I should tell my tenant or not. Yes, you should tell your tenant. You don’t want to surprise them even if they’re the reason you’re selling. This is still where they live. You don’t want to surprise them by having people—by the way, we’re going to have somebody come look at your house tomorrow.
You actually can’t do that, can you? That’s illegal to just walk into somebody’s house. You have to give them notice before you can walk in. But it’s a courtesy to tell them you’re selling the house. You want them to present the house in its best light so you’re going to have to incentivize them to have the house looking nice. Maybe you pay for the cleaner to come in. Maybe you offer them a rent credit if they don’t cancel showings. But it’s definitely more difficult to sell a property that has a tenant in it. I was actually showing clients a house with tenants in it and I walk in and I’m like, oh gross!
Of course, they don’t know what a vacuum or they don’t know what a broom is, but there’s like dirty dishes in the sink and food on the counter. The whole thing smelled like smoke and my client was like, I don’t want to buy this house. This is disgusting. I think you should definitely view the tenant’s house beforehand. And honestly, if they’re gross, you may just want to wait until after their tenancy has ended before you sell the house.
Scott: Or maybe you hire a cleaner or something, right? And you say, hey guys, free house cleaning for you guys. Valued at $300. They’re going to be in there for eight hours this Saturday just scrubbing away. It’s going to be great. You’re going to love it.
Mindy: Yeah, and if you have a hot market, you can arrange it so you have the cleaner come in and then you have like an open house where the tenants are out of the property where you’re selling, or while you’re showing it.
Brandon: I think you’re right on the try not to sell a house with a tenant in it. If you can avoid that, that makes life a lot easier not to have that. One time, I actually offered a tenant, I think it was $1000 if they kept their house clean and somebody bought their house. They ended up actually moving out before somebody made an offer but yeah that was my plan, I’ll just give them $1000. But it was contingent on them being able to help sell the house. So that was my theory at the time.
Mindy: If you do have to sell it with a tenant in place, I recommend working with the tenant, asking them when is your ideal time to show houses? When is a time that just doesn’t work for you? If they’re working with you, maybe even give their phone number to the scheduling agency so that they can make the appointments themselves. I would caution that if they start cancelling a lot of appointments or denying a lot of appointments, maybe you take that privilege away from them. But it’s their house, what do you care when the showing is?
Brandon: Cool. All right. We are on number—that was number five. So what are we on? Number six.
Scott: Number six.
Brandon: All right, what do you got?
Mindy: Be informative. If you’ve updated anything in the property, share that information. Let’s say you have a whole new kitchen. When did you do the kitchen. Who performed the work? What work was done? It’s all new pipes or it’s just brand new electric or it’s just cabinets. Tell them what you’ve done. This is especially helpful in a flip situation where you bought the house at X, you put in so much work, and now you’re selling it for significantly more, or trying to sell it for significantly more.
Every buyer who has an agent has an agent who can look up when the house last sold—oh, it sold five months ago for $100,000 less. Why? You want to just share with them all the things you’ve done and on the other side, you want to share what needs work. It needs a new roof. And I’m not going to put it in there. Don’t try to hide that. Share everything up front because again, the goal is to get the most targeted buyers through the door. There’s no prize for having a ton of buyers with no offers. Maybe Scott will give you a prize.
Brandon: I agree.
Mindy: I’ll give you a copy of my book if you have 500 showings with no offer!
Scott: Nope, you get nothing.
Brandon: I think that’s good. I think also, have you ever heard the phrase, people buy with emotion—or they’re sold with emotion? They buy with emotion but they justify it with logic. Right? So like, they want the house. They like the house. But when they see, hey, it’s got a new roof on it, we don’t have to put a roof on for 30 years, then that’s the logic they need to justify it to make an offer, to justify to themselves or their spouse, their significant other or whoever.
Hey, look at all the work that’s been done. This is why it’s a good deal. But in reality, nobody buys a house because it’s a good deal. Investors do. But most homeowners, especially, they buy a house because they want to buy that house. It’s cute and they like it. But they don’t want to say that in their heads so they have to justify it with, look at all the work that has been done lately. And that’s another reason why it’s good to list what you’ve done.
Scott: It’s smart.
Mindy: Yes, absolutely. And don’t hide issues because they’re going to come out anyways and then you look like a skeez.
Brandon: That is true. Is that a word you just made up or is that a word I don’t know? Skeez?
Mindy: Brandon, we used that—well, I used skeezy a couple of episodes ago.
Brandon: I like skeezy. That’s a pretty good word. All right, number seven.
Mindy: Know your competition. So your house is not going to be the only house on the market. While you hopefully have priced your property correctly, which is a tip down the road—hopefully, you’ve priced your property correctly, you don’t know if that’s actually the right price until you see what other houses are going for in the general area. You want your agent to send you a list of comparable properties.
Like, you’ve got a three bedroom, two bathroom house that you’re listing at $200,000. You want to see all the three bedroom, two bath houses. You want to get a listing of all the 3/2s from $150K-$250K or $175K-$225K so you can see what other people are offering at that price. If everybody else is offering granite countertops and stainless steel appliances and hardwood floors and you’ve got crappy old carpeting and laminate countertops and white appliances, your house is not going to sell for the same price those other ones are.
So you definitely have to know your competition. You want to get competitive listings and if you’re having a hard time coming up with the price for your property, ask your agent to take you into the actual properties that are being listed at the prices that you’re considering. Let’s say your agent is saying you should list it at $175,000 and you think you should go to $200,000. Have your agent show you something at $175,000 and show you something at $200,000 so you can see what’s actually currently on the market and where buyers are going after they’ve left your house.
Brandon: There you go.
Scott: I think that’s a fantastic tip. Yeah.
Brandon: That’s good. All right, well I’m moving on. Scott’s speechless.
Scott: Number nine. Or, number eight.
Brandon: Eight, don’t skip number eight. Come on, Scott.
Mindy: Scott does not know how to do his numbers. He hasn’t learned numbers yet.
Scott: Number blue.
Mindy: Number eight? Number blue is use an agent.
Brandon: Why, Mindy? I don’t want to use an agent. I don’t want to give him 6%.
Mindy: I’m sorry, I’m going off on a tangent in my head. Okay. Number eight is use an agent. I have sold FSBO before, before I was an agent.
Brandon: What is FSBO? What does that mean?
Mindy: Oh, what a great question, Brandon. Thanks.
Brandon: Thank you.
Mindy: FSBO stands for For Sale By Owner, meaning you are selling your home by yourself without a real estate agent. And this sounds like a really awesome idea. Oh, I’m going to save all this money because while it is a violation of the Sherman Antitrust Laws to say there is a set rate of a commission, commissions hover between 5-6%. So that’s 5-6% of the entire sales price you’re paying to somebody else to sell your house. And this sounds like a huge chunk, and it is.
But, studies show that houses sell on average for like 15% less than when they’re sold For Sale By Owner than they do when they’re sold with an agent, even accounting for commissions and things like that. It takes more time to sell, For Sale By Owner, and I have to say, I am a licensed agent but it’s a lot easier to sell when you use an agent. So if you’re looking to make the most money for your house, statistics don’t lie.
Scott: What about if I’m attempting to sell my place and I decide to get my license? Maybe somebody is thinking that. Maybe their place is worth a lot of money, like $500,000-$600,000 more and they’re like, hmm 3% of this is going to be $15,000 or even more. Should I consider getting my license to sell my own home so I can avoid missing those advantages?
Brandon: Good question.
Mindy: So, that is a good question. If you are getting ready to sell your house and you have a timeline, a deadline to get your house sold, I don’t think learning your market and becoming a real estate agent and going through the coursework and getting the background check and all of that is a good choice for you at this time. I mean if you already have an agent licensed than sure, you can go ahead and try to sell it. But if you don’t know your market completely, you don’t have a lot of time to sell your house. Getting your license is—I don’t want to call it silly, but it’s a silly endeavor.
And one of the main reasons that you use an agent is because they know the market presumably. I mean, I’m not recommending that you get an agent that doesn’t know the market. You want to sell your house for the most money, you use an agent that’s got connections who can help you sell your house in the timeframe that you need to sell it in.
Brandon: I love it.
Scott: One thing I’ll throw in there is that just because you’re using an agent doesn’t mean that it’s still your responsibility to make sure that your house is ready to sell, right? All these tips that you’ve been giving—people will hire agents and not leave their house smelly or leave it messy and not—
Mindy: I know. I go into those houses.
Scott: It’s not like you hire an agent and they’re going to take care of everything for you. You hire an agent as you plan on doing all of the work necessary to get this property ready to sell and get it in good condition so that you can—this is perhaps the second biggest financial transaction of your life to this point, right? Buying the property in the first place being the first. So I think that is something that—a point of this is hey, use an agent but don’t rely on that agent to do the things that are necessary to basically present your home in the best possible light. And be informed going in.
Mindy: That’s a really good point and yes, you should absolutely use an agent but the agent is not going to come clean your house. The agent is not going to make sure it doesn’t smell. The agent is not going to be able to answer all the questions that somebody may have about your house if you haven’t given them the information and the agent is not going to have a pre-listing inspection performed. They’re not going to come clean your house. They’re not going to take great pictures of your house. Almost exclusively, if your agent takes pictures of your house, they’re not going to look great.
Mindy: And I don’t mean to talk smack about agents but they’re not photographers. My husband is just multi-talented.
Scott: A follow-up question is, how do we find a good agent who will do some of those things or who will encourage you to do some of those things?
Mindy: Just pick a name out of a hat. It’ll be fine. So, my friend who knows me, knows my job, knows that I love real estate, she decided that she didn’t want to live in her house anymore. It was her first property. She wanted to sell it and buy something new. She’s driving down the road and literally sees a sign in the yard, like she’s kind of impulsive. As soon as she decided she wanted to sell her house, it was like, bam! There’s an agent sign. I’m going to call this person up.
She calls this woman, says I want you to help me sell my house and buy another one. Of course, the agent’s like, woohoo. Dollars! Lists the house too high, does not communicate with this friend at all. She doesn’t give her any sort of advice. There was a problem with the buyer. They missed closing. And my friend was like, wait, wasn’t I supposed to close today? No communication for the longest time. Finally, it closed I think two months after it was supposed to.
She finds a new property to buy. She doesn’t understand how a home inspection works. She thought that when she has the home inspection, the inspector will just give her a list of things that are wrong and you turn that over to the buyer and the buyer fixes everything. But she didn’t fill out an inspection objection form. She didn’t ask for anything to be fixed so then the objection deadline passes because her agent didn’t give her any advice and now she’s stuck.
There wasn’t a lot, luckily—there wasn’t a lot that needed to be fixed but there was a lock missing from the sliding glass door that she had to put in herself and just a couple of things that were very reasonable requests if she would have made them on time.
So how do you find an agent? Drive by a sign and just pick a name out of a hat. No, you want to ask your friends. If you are selling an investment property, ask some of your investor friends. Who has sold your properties in the past? Who would you recommend? And just as importantly is, who would you not work with again?
Maybe you come across this woman who was a terrible investor—a terrible agent for my sister. I would absolutely not recommend to work with this woman again. I would not ever recommend anybody work with this woman. I don’t know who she’d be good for. She’s definitely not good for first-time sellers. So if you are not selling an investment property, ask your friends. Who helped you buy your house or who helped you sell your house last time and get some recommendations from them and then interview them.
Ask them—if you buy, How to Sell Your Home, you will get a copy of a real estate agent questionnaire form. Ask the agents questions. You don’t have to call up one agent and say, oh, I guess I’m stuck with you. You can interview a lot of different agents and you want somebody who communicates the way you want to communicate, who is informed of the neighborhood, who really knows the area well and who can help you sell the house in the timeframe you need to sell it.
Brandon: I love it. I think that this is such an important point because you know, too many people I think are just helpless. They go to the agent and they wait for them to bring them a deal and they’re like, oh, that sounds pretty good. Great, or whatever. They’re unable to spot competence and fire incompetence and you’ve got to give yourself the toolset necessary to be able to do that at minimum.
And you can do it in a couple of hours by reading this book, for example, and knowing what kind of questions to ask your potential agents so that you can set yourself—you can hire someone who is competent and capable enough to set yourself up for success with again, what is a huge financial decision in almost everyone’s life.
Mindy: Yes, this is an enormous financial decision. I really like what you just said. Fire incompetence. People are hesitant to fire incompetence. If your agent is not working out for you despite asking questions and interviewing a bunch of people, make sure you realize that you can get rid of that. You can fire that agent. That might be in your best interest to fire that agent.
Brandon: There you go.
Mindy: I also talk about that in How to Sell Your Home.
Brandon: Speaking of that book, let’s jump in here real quick. We are just done with Tip #8. We’ve got 16 total so we have the other half coming up on the second half, which is a little bit shorter than the first half. So if you’re listening, we’re not going for another 50 minutes. But I do want to talk about the book here for a minute. So Mindy, first of all, How to Sell Your House. What’s the whole goal of writing the book?
Mindy: The goal is, there’s this guy named Morgan Howsell. He writes for the MotleyFool.com. He is brilliant and knows everything there is to know about finance. And he wrote an article a couple of years ago—I guess it’s a couple of years ago now, that said, Here’s Everything I Didn’t Know About Buying a House When I Bought My First House Six Months Ago. And I’m like, wait a second. You don’t know something that I know? That’s amazing because he is so smart. He knows everything. So for him to not know this, I’m like, you know what? If he doesn’t know it, I bet there’s a lot of other people that don’t know it either.
And he was buying a house. And we wrote the How to Sell Your House book first because we do work for BiggerPockets.com and there are a lot of investors on the site who may have been buying as the market is increasing and now people are asking, is it time to sell? Yes, but if you’ve never sold a house before, you have no idea what you don’t know.
So I took all the information that I have from years of investing and buying and selling and I put it into a book so that people won’t have to ask questions. This was further cemented when I was on the forums a few weeks ago and somebody said, hey, I didn’t know I needed title insurance. Oh, that’s a big thing. So I covered the things like you don’t know that you need title insurance if nobody tells you, you need title insurance. So that’s why I wrote the book. So people can have a firm grasp on how to sell a house or a home.
Scott: And of course, your agent should be telling you that you need title insurance and that kind of stuff but the idea, the other part of it is that there’s a lot of agents out there that may not be so competent. And again, having that self-education, bothering to learn about this stuff before you go through it can save you tens, maybe even thousands of dollars.
Mindy: Yes, absolutely and you know, if you’ve done something a hundred times in a row, do you remember what the step one is? Do you remember to tell people what step 37 is? You might not. You might skip a step because you just know to do it. So anyway, that’s why I wrote the book.
Brandon: That’s awesome. So where can people get it at, BiggerPockets.com/SellYourHome. Right?
Brandon: Perfect. As we do with book launching—we just had a book launch like a month ago with David Greene’s book, The Long Distance Investing and we like to overwhelm people with value when you buy it right away and so during the launch which I believe is during the first two weeks—we’re going to call it the first two weeks. It comes out on January 11th, which is today if you’re listening to this show when it comes out. So, until January 25th, if you buy it by then, you’re going to get a whole ton of cool bonuses including some interviews. You’ve got a book on, what is it, Mindy? Tell me about the book. I can’t remember the title of it. I got it written here somewhere.
Scott: How to Sell Your Home.
Brandon: No, the bonus book that comes with it. The bonus book.
Mindy: The e-book is called Sell Your Investment Property.
Brandon: Ah, there we go.
Mindy: There is a video with my absolute number one top tip for selling your home. There are video interviews with experts in the real estate field for selling your house. I’ve got a video about painting tips. Some DIY fixing up your house painting tips. And if you purchase before January 25th, you will get access to the webinar that Dave Myer and I are hosting called The Ins and Outs of Selling Rental Properties.
Brandon: Perfect. I love it.
Mindy: It is a live webinar.
Brandon: I love those things because they’re good for Q&A. We just did one with David Greene’s launch just a week ago and it was amazing. We went like an hour and forty-five minutes of just questions with David about like buying out of state, long distance. It was fantastic. So I’m looking forward to this one as well.
Here’s the cool thing about this book is like, anybody who is ever going to sell a house ever, if there is one tip, which there are a million tips in this book, but if there is one tip that helps you just improve the sales price by .01%, it pays for itself ten times over. That’s why I love books like this because like, books that are how-to, a bunch of tips, yeah we know a lot of these things. We’re smart. We’ve sold houses, some of us. Some of us feel like we’re smart. At the same time, if there’s like one or two things that can help you, man, it is totally worth reading and again, I think there are hundreds of cool things in this book. So pick it up at BiggerPockets.com/SellYourHome. And also, you can get it on Amazon and Barnes & Noble, right?
Mindy: Yes. Wherever books are sold.
Brandon: Wherever books are sold. So moving on, let’s go to number nine, Mindy. Number nine. What do you got?
Mindy: Ask your agent for selling advice. You’ve already chosen a good agent and now you want to pick their brain. Part of having them be your agent is using their experiences, which is market-specific. I can sit here and tell you all about how to sell your house but I can’t tell you how to sell a house in Cleveland, Ohio because I’ve never sold a house in Cleveland, Ohio. If you’re trying to sell your house in Cleveland, Ohio, you want a Cleveland, Ohio agent and you want to pick their brain. What do I need to do to get this house sold?
Scott: Awesome, I love it.
Brandon: Yep, perfect.
Scott: Number nine?
Brandon: That was nine.
Scott: Oh, that was number nine. I can’t count today. Good grief.
Brandon: Number yellow. Number ten.
Mindy: Number ten is price your house right. You may be tempted to price it at slightly or even significantly higher than what it’s actually worth but that’s a bad choice and the reason is, your buyers are seeing everything else that’s on the market at a regular or reasonable prices and they’re going to pass your house over as your house sits on the market without an offer, without selling, it gathers days on market, or DOM time, which makes the house look like there’s something wrong with it. Especially in a really hot market.
There’s a house around the corner from me that’s been on the market for like 700 days. Everything else in my market is selling instantly for over asking price, all cash offers, no contingencies, yada yada yada because we’re in a such a hot market. But this house sits and sits and sits. It’s about $50,000 priced too high. And at that price point, that’s not a significant amount of money but it’s a significant enough amount of money that nobody is buying the house. So it just sits there and now it looks like something is wrong with the house because it’s a stale listing.
Brandon: There was a property I flipped back in, I don’t know, it was probably six years ago now. And I listed it at $170,000 because I thought that was like top of the market but I thought this is the best house ever so I can get top of the market in this neighborhood. It sat on the market for I think it was ten months before we got an offer. It took a year, beginning to end, on the market to sell the thing. And I ended up selling it for $120,000. We dropped the price that much, from $170,000 down to $120,000 just to sell it. Ended up losing money on that flip. The one flip I ever lost money on because I got greedy.
Had I just listed it at the $150,000 where it probably should have been, $155,000, I probably would have gotten an offer right away. But the longer it sat on the market before I started dropping the price, it just got longer and longer and longer days on the market. Now granted, this was in the pit of real estate hell back in like 2012, I think it was, when I listed this thing. But still, I shouldn’t have been greedy. I should have just taken the money. I just look at dollar signs and I’m like I can make so much money. I can get a lot of money. No, no. Stupid. Even if I could, it probably wouldn’t have gotten the appraisal to justify it so I would have probably had to drop the price anyways.
Mindy: Yeah, exactly.
Scott: How do I know if my agent is listing it too high or perhaps too low? How can they present the price that they want to list it at to me in such a way that I can have confidence they know what they’re doing?
Mindy: That’s a great question. You should ask them why they are recommending this price point. Ask them to justify this price. They should use words like “comps” or “comparable properties” and a comp is not a house that is currently on the market. A comp is a property that has sold recently in your area that is comparable to your house. Like, you don’t want to comp, when you’re trying to sell your 3/2, you don’t want a comp of a 6/4.
You want a comp of 3/2s that are selling around the same time that yours is. One or two months, three months in a hot market, and six months or maybe even 12 months in a slow market. But you definitely want to see what other houses are selling for because that’s what makes a house worth what it’s worth. It isn’t how much money you put into the house. It isn’t how pretty you painted the walls. It is what other houses are selling for in the area at the time of sale.
Brandon: Can I say one more thing with this? This is something that occurred to me the last few years. I used to look at like the sales price and thought, well, let’s just say I drop the sales price on my property by $20,000 but it took me four months longer to sell it, we’ll say, right? Like, when I looked at that, that’s like $5,000 a month. I mean, my mortgage payment is only $1000 so I might as well just keep the property on the market at the higher price because it was worth it.
However, what I discovered is like the opportunity cost is what I’m really losing. I’m not just losing on the expenses of holding a property for three or four or five months longer. I’m losing it on the fact that I’m not buying more real estate for the next three, four, or five months because all of my money is tied up in a deal.
So just to those investors out there that are listening, thinking they’re trying to get top dollar, or they’re really trying to get the top amount, ask yourself how much are you losing by not dropping your price? How much are you slowing down on your ambitions? What are you holding yourself back from by not lowering your price? So, some tip for ya’ll.
Mindy: That’s a good point. Another tactic that some people use is to price the house really, really low in the hopes that they’re going to instigate a bidding war. I don’t like this tactic personally. I find it disingenuous to list a house that’s $200,000 at $150,000. I think if you list the property at that price, you should be willing to accept that price. Maybe somebody thinks they found a really great deal and they’re really disappointed they didn’t get this house at $150,000 when it’s really not ever going to be in their price range anyway. But that said, if it’s a $200,000 price, that’s a real psychological stop. So people will put their price range in basically $25,000 increments of $50,000 increments. If I’m looking for a house for $185,000, I’m going to look for $175,000-$200,000 because maybe the guy at $200,000 will come down. Maybe he didn’t pay any attention to me and listed it way too high and now has to come down because nobody is buying this house.
But listing it at—if it’s a $200,000, listing it at $195,000 may have people come in and say, oh, this is a good deal. I’m going to make an offer at $195,000 or I’m going to go over asking so I can definitely get this house. They’ll go up a little bit. They might even instigate a bidding war but it’s not a disingenuous bidding war. Instead of $195,000, you get $197,500 or something. So you’re still getting about what you need but you don’t have to drop the price because maybe you’re a little bit overpriced and you’re not hitting that psychological barrier of $200,000.
Brandon: That makes sense to me.
Scott: Awesome. I think it’s a great tip. I think we’re—let me try this. Let me see if I can get this right this time. Number eleven.
Mindy: Oh, good job. Scott figured out numbers!
Brandon: No, we’re on number purple. Sorry, Scott.
Mindy: Number purple. List in peak market time. The whole point of this podcast is 16 Ways to Make More Money When You Sell Your Property. Selling it in the dead of winter is not the peak market time for you to get the most money. Buyers are looking in the spring. The weather’s not so crappy. Kids are finishing up the current school year and moving on to the next school year. There’s a big space in the middle for summer where you can move and have a nice time, move smoothly. So spring is when everybody is out looking for houses and if you want the most money for your house, you want to be where the buyers are and that’s listing it in the spring.
Brandon: Can’t argue with that.
Mindy: You can’t argue with that because it’s true.
Brandon: I will add one tip on there. If you are a landlord thinking about selling your investment properties and you want it vacant, you don’t have to do, unless your state law is different, you don’t have to do one-year leases. There have been times when I know I’m going to sell a property so I will deliberately do a six-month lease or an 18-month lease just so that it ends at the peak selling time, which is usually late spring for me because nobody buys a house in the middle of winter. At least in my area.
So there’s a little tip for you. If you plan ahead and schedule your leases accordingly. I do that as well for just renewal leases on any rental property I have. I never want a lease renewal anytime between November, December, January, February, March, April. I’ll just deliberately make sure it does not renew then.
Scott: Twelve months straight of winter back in Washington up there.
Brandon: It’s like ten months of rain and then two months of the most gorgeous weather you’ll ever experience. So, all right.
Mindy: We live in Colorado. We’ve got the most gorgeous weather you’ll ever experience. Okay, question orange.
Brandon: And nosebleeds. All right, question orange.
Scott: Number twelve.
Mindy: This one is for after the property has been listed, double check your listing information. Every property that goes on the MLS, there’s forms to fill out to put it on the MLS. How many bedrooms does it have? How many bathrooms does it have? What’s the square footage, garage space, etc.? You want, after your agent has filled all of that information out and hits “Go Live”, you want to go into that listing and double check that all of your information is correct.
Brandon: That’s a good tip.
Mindy: I have seen houses that say they’re six bedrooms and they’re really two bedrooms or houses that two and three are right next to each other—you think you’re getting a three-bedroom house. You walk in and you’re like, where’ s the third bedroom? Well, it’s only a two-bedroom house. Well, it says three on the listing sheet.
Again, you don’t want extra people in your house. It’s a hassle to show your house. It’s not a ton of a hassle but you know, it’s a hassle to leave the house, especially if you have young kids. You don’t want people coming into your house looking for a three-bedroom house if it’s only got two bedrooms. So make sure all the information in your listing is correct.
Scott: Yeah, and I’m going to chime in here because, first of all, sometimes it’s not the agent that’s entering this information. Sometimes, it is their intern or their office admin or something like that and they’ll get it wrong. They’re doing this all day long, every day. They’re going to make a certain number of mistakes when you’re typing in hundreds of thousands of pieces of data into the MLS.
And the second thing is, this happens a ridiculous amount of time here in Denver. The properties, people will be selling like a house—they’ll list it as a house and it’s really a duplex or a triplex and it’ll be listed at like $600,000 and it’ll be completely wrong. The description will be correct but the actual listing information will be completely wrong.
So as a buyer, I have to go in and look at all these properties that are four, five, six, eight-bedroom homes and just go through them one by one to make sure that I’m not missing any of the duplexes, triplexes, or quads that are in the market. And it’s amazing the percentage of these things that are listed completely incorrectly. And those are real dollars coming out of the sellers’ pocket and into my pocket as the buyer, the only one that’s actually recognizing this as the correct type of deal.
Mindy: Yeah, and we’ll use that tip in reverse when we publish How to Buy Your House. But when we’re talking about sellers, we’re the ones in charge of the listing right now. We want to make sure all that information is correct. It’s really easy to go in and make the change but if your agent doesn’t know there’s a problem, they’re not going to go in and make the change. So you want to make sure that, ultimately, this is your house. The agent made a mistake. It’s not a huge deal but you want to get it fixed.
Brandon: Perfect, love it.
Scott: Great tip.
Brandon: All right, number thirteen.
Mindy: Number thirteen is stage those weird areas that don’t have an obvious use. Have you ever walked through an open house that’s vacant and you’re like, what on earth would they ever do with that space? Your buyers are seeing that weird space and they don’t know, they’re going to just keep on walking.
I went to a house, they had this basement space and it was this really odd, L-shaped, wiggly, whatever basement but they had staged it in such a way that it was a reading nook. And that makes perfect sense in this particular space but I would not have thought of that. And I’d like to think I’m pretty creative when it comes to houses. I would not have thought to make that a reading nook. I would have just looked at that space and be like, what on earth am I going to put there? I guess just boxes. That’ll be more spaces for boxes.
So if you’ve got a weird, weird, weird space but you have a creative use for it, stage it. Even if nothing else in the house is staged. Showing what they can do with that weird space, I mean what’s a bedroom? Oh wow, you can put a bed in here. If you do or don’t have a bed in there, people are going to know it’s a bedroom.
Scott: The thing with the book nook is that seems to be a go-to because I’ve seen a lot of places that will just have like these really strange—I saw a place that had a four-foot, maybe three-foot high by four-foot deep box underneath the stairs. So they painted it blue and they put in like a little pillow, a little carpet on there, and it looked like a book nook for the kids. I’m not going to go sit in that little crawl space under the stairs but maybe some kid might. I don’t know.
Brandon: What do I look like, Harry Potter?
Mindy: I thought you were describing my house because I actually do have that. And my father-in-law’s an electrician and we had him put a light in there and the girls go in there, I made a little curtain and it’s like their little hidey hole and they love it. I’ll show you the next time you’re over, Scott.
Brandon: I flipped a house once that had a bedroom—it had three bedrooms but one of the bedrooms was only six feet wide by like twelve feet. It was the weirdest long, narrow bedroom. So what I did, I just went and bought the cheapest desk I could find at IKEA. It was like two little saw horses with basically a little platform on top. It was like $30. I put it in there, put some curtains up in there, put a little desk pencil holders and like a piece of paper on the desk and it became a really nice office. And the house sold really, really fast. Nobody ever brought up the fact that this bedroom was six feet wide which is an awkward size for a bedroom.
Mindy: That’s because it’s an office, not a bedroom.
Brandon: Yep, but legally it was a bedroom but we just called it—we just let people envision what they want. Cool. All right, moving on. Number fourteen.
Mindy: Okay. Number fourteen is leave during your showings and make sure you take your pets with you. So, people are allergic to animals. People don’t like certain types of animals. Take your pets out of the house if at all possible. And don’t ever be in the house during a showing. Your buyers do not want you there. They don’t care for your opinion of what the house is and they don’t want to see that cool little thing that you did. They want to talk about your house freely and if you’re in the house, they won’t feel comfortable. They will come through, see you there, glance around and leave and you will have lost a sale that you may have not lost if you just weren’t there.
So get yourself out of the house for showings and leave a few minutes early. Leave before the showings are even scheduled to start. Because if somebody is running late or running early, they’ll be able to come by and just walk in. You’re not there. They can go ahead and start the showing. If you’re there and you’re like, oh, I just need five more minutes, they’re going to go someplace else and they might not make it back to your house. And don’t come back until after they’re gone.
Brandon: All right. I like it. Number fifteen—actually on that note, let’s talk about investors real quick because obviously, it would more apply towards homeowners selling their house but what about investors—we talked about tenants earlier. Do you think you should encourage your tenants to leave, tell them to leave, or do you think it’s okay to have the tenants stay there?
Mindy: Same applies to the tenants, too. You don’t want your tenants there. You want to encourage them to leave and in fact, you don’t want to accept showings if your tenants are going to be there. I’ve been in properties where there’s been tenants just sitting around watching TV and you’re like, wow. It’s the same thing. I feel uncomfortable because regardless of who owns the property, the tenant lives there. I don’t want to see you, the person who lives in this home, when I’m looking at the house. I want to be able to talk about the house freely with whoever I am with.
Scott: What about someone like me? I like to meet the tenants. What about for that type of person? Should there be another opportunity for them, the investor, to meet the tenants?
Mindy: Do you want to meet the tenants if you’re not going to buy the property? You don’t care.
Scott: That is correct, yes.
Mindy: So after the house is under contract then you absolutely should meet the tenants. You absolutely should go over there when they’re there and say hi, I’m going to buy the property, I’m going to be the new landlord. Here’s a little sheet. I’ll give you a call at closing to let you know that it’s official. But yeah, you do want to see them after you’re under contract. But this is while you’re just looking at your house. And this is from the Southside, Scott.
Brandon: Yeah, on the buyer’s side, I love it when the tenant is there when I’m looking at a property, and this is why a seller should not want a tenant there. Because when I go to buy a property, the tenant’s like, this place is a pile of crap. Look at this wall over here. They love to brag about how crappy their property is and they show me everything.
Scott: That’s true, actually. Because when I was buying the last place, the tenants were a firehose of negative intervention about the property which was fantastic. And that was very helpful. So fair enough.
Mindy: That’s fantastic as a buyer. But as a seller, you don’t want anything to do with that.
Scott: Good, yeah.
Brandon: All right, number fifteen.
Mindy: Number fifteen is be prepared to walk away from an offer.
Brandon: What do you mean?
Mindy: The whole point of putting your house on the market is to get an offer but not all offers are the same. So, let’s say you have a buyer who is just nickel and diming you. They have a home inspection and they’re like, oh, the light switch is dirty. I need $10 for that and I need $100 because the rug is crumpled. They just keep nickel and diming everything. That’s going to be a pain in the butt buyer. That’s going to be somebody who is just going to keep asking and they might postpone the sale. They could decide at the very last minute to walk away, maybe they don’t even have funding available.
If you have a buyer who is nickel and diming you and you’re just not comfortable with it, every day that you’re under contract is a day that you’re on the market. And if the contract falls through, you now have 30, 50, 100 days on market and then you have to start over. So you want to be prepared to walk away from an offer if it isn’t working out. And you can’t just say, forget it, I’m leaving. You have to go through and offer to let them out of the contract. But don’t be afraid to offer to let them out of the contract.
Another fun tip is in our market of the Denver area, prices are skyrocketing. Everything goes under contract instantly. There’s no contingencies, yada yada yada. So what some buyers have started doing, and I don’t agree with this but you should be aware as a seller that this could happen—they will give you an outlier offer. Again, let’s say your house is listed at $200,000. They’ll offer you $250,000 and everybody else is around $205,000 or $210,000. You’re like, oh my goodness, I’m going to sell this house for so much more. This is awesome. But then it doesn’t appraise at $250,000. Now, you have to come back down to the $205,000 or the $210,000 or whatever it appraised at or risk losing the sale. And again, you risk losing the sale after a property falls out of contract, it starts to look like there’s something wrong with the house.
So you’re kind of stuck with this buyer. Again, you should be prepared to walk away but if you’re stuck with this buyer, then you’re stuck with their price, too. So a way to combat that is, okay, you’ve offered me $250,000. I will accept your offer of $250,000 but it only has to appraise at $200,000, which is the price that I offered at. If it appraises for less than $250,000, you have to bring the remainder to closing.
And that can get them to kind of back off their $250,000 price. Maybe you have an offer of $215,000 and it appraised at $215,000, those people are long gone if you’re dealing with the $250,000 guy. Make sure that your appraisal inspection is only at what you have offered the property at, which goes back to pricing it right and using your agent for selling advice and you know all of that. These kind of all build on each other.
Brandon: All right. Well, cool.
Mindy: Last tip.
Brandon: I think we have one last tip then we have the Fire Round.
Scott: Sixteen. And this is purple.
Mindy: This is number purple.
Brandon: Didn’t we do number purple already? I think this is number pink. Sorry, Scott.
Scott: Oh, yes.
Brandon: Number pink.
Mindy: Number pink. Tell everyone you know that your house is for sale. Yes, you’ve got an agent. Yes, you’ve got it on the market but you’re not done selling your house until the house has closed and you have money in your pocket. So tell everybody you know that your house is for sale. The lady down the street did that. Her house is for sale. She told all of her friends, I’m going to list the house tomorrow. She had a friend make an offer on the house and win the house, simply because she told them that it was on the market. They had wanted to move, they had always admired her house, and then all of a sudden, it’s available. Well, I’m going to get in there. What price do you need? I’m going to make that offer.
Brandon: I like it. I’ve actually sold a number of houses to people who just saw it on Facebook. Like, I shared it and then somebody else shared it and yeah.
Mindy: Facebook, Twitter, ask all of your friends to share it, if you’re on Instagram. Whatever your social media is, e-mail all of your friends. Tell everybody you know that your house is for sale because the whole goal of putting your house on the market is to get it sold. There’s sometimes this mentality of, oh, that’s the agent’s job. Well, it’s not the agent’s house. It’s your house. If you want to sell it, let everybody know. Nobody is going to call you up and be like, hey, is your house for sale?
Brandon: There you go. All right. That was good. Sixteen good tips to sell your house for more money. And I would also add that to sell faster, a lot of those tips can apply both to speed and to money. So I appreciate that, Mindy. I think I learned a lot. I always do every time I talk to you, Mindy. You’re a smart gal.
Mindy: Aw, thanks, Brandon. I learn something from you every once in a while, too.
Brandon: Well, good. Well people should pick up the book. Go to BiggerPockets.com/SellYourHome to get a copy of how to sell your home, the essential guide to a fast and stress-free and profitable sale. Or go to Amazon. Go to Audible. Is it on Audible? Did you record an audio version of this?
Mindy: I did record it.
Brandon: Wow, cool.
Mindy: I recorded an audio version of this, too. It’ll be available on January 11th, which is today.
Brandon: Perfect. And then, of course, you can get all that stuff and if you buy from BiggerPockets, you get all the cool bonus stuff so go to BiggerPockets.com/SellYourHome. I would recommend getting it there. Now, before we get out of here, let’s get to today’s Fire Round.
It’s time for the Fire Round.
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You see, with FreshBooks, you can link your FreshBooks account to your credit card or debit card so next time you expense that business lunch or that tank of gas, it’s going to show up automatically in your FreshBooks account. You can even take pictures of your receipts on your phone and put it right up into the cloud with your mobile apps. Also, they have amazing customer service. Super helpful and you actually get a real-life person, usually within three rings or less. So, to claim your 30 day, unrestricted, free trial, no credit card required, go to FreshBooks.com/BiggerPockets and then do us a favor and enter “BiggerPockets” in the ‘How did you hear about us’ section. Again, FreshBooks.com/BiggerPockets.
All right, today’s Fire Round. Let’s get to these questions, coming directly out of the BiggerPockets forums, which Mindy is the queen of the forums. Number one, after taking initiative landing a deal and successfully completing renovations, how can you be sure that your property is going to sell?
Mindy: You can’t. Next. No, you can’t be sure that your house is going to sell. You have to—there are things you can do to encourage it to sell. Have a pre-listing inspection. Clean up your home. Make it smell nice. Take good pictures of your house. And price it right. I mean really, if you have a good property that is presented well, that is priced within the market constraints, it’s going to sell. If you’re having a problem selling your house, nine times out of nine, it’s price.
Scott: Awesome. Well, question number two here is straight from the forums as well. I’m considering selling my rental property to two of the tenants that I know and trust who currently live there. I’ve mentioned I would offer them the discount of 5% based on agent fees. I don’t have the slightest idea of how to actually sell the house. Are there any fees or people I should consider getting involved to complete the necessary paperwork, etc.? As I mentioned, I trust the tenants. I don’t expect to have any funny business but is selling the home as simple as having them secure a loan and heading to an escrow company?
Mindy: No. I think that—I recommend you using an agent as I mentioned in my 16 tips, but if you don’t have to find a buyer, you can absolutely skip the agent. I would absolutely recommend getting a real estate attorney involved because the contract to buy and sell real estate in Colorado is 16 pages long, currently. And actually, it’s now 2018. I’m sure it’s longer. I haven’t seen the new contract yet. I probably should have done that before I recorded this. Anyway, it’s a really long document. Words that mean one thing in the English language will mean something entirely different in legalese.
So you need somebody to help you sell the property to the person who is buying it. You don’t need somebody to match you up but you need to make sure that you’re conveying the property to them in its entirety as you own it. If you convey a different property, you can screw up the whole public records and you need an attorney to help you out. You need a title company to help you out. Title company, in Colorado, handles pretty much the entire closing documents. So if you’ve got a buyer already, talk to a title company, talk to a real estate attorney, and that will help your whole transaction go smoothly.
Brandon: Very cool. All right, number three. I’m looking to buy a house and I’ll be looking to sell my current home. How do people work the timing of selling and buying a home? I’d rather have a home I’m looking to buy at least in contract with a good idea of the closing date before I commit to selling my current home. Are there issues with this?
Mindy: Yes. Well, it depends on your market. In the Colorado market, it is extremely hot. I’ve said this before and I’ll continue to say it because it just keeps going crazy. It is not uncommon in our current market to see post-closing occupancy agreements where I will sell my house to you. You will buy it from me. And then I will rent it back from you until I can find another property to buy because nobody in this market is going to accept a contingency for a home sale, meaning when you write an offer for a property, you say this offer is contingent on me being able to sell my house. Nobody is going to accept that because they’ve got nine other offers that are not contingent on the home sale. And you never know how long it’s going to take to sell a home. Maybe they have some weird geodesic dome house that’s never going to sell, even in this hot market.
So depending on your market, in a slower market, you absolutely want to sell your house before you start looking for another house. In this current hot market we have, you want to start your home buying process even before you start selling your house because your house will sell instantly but your home—you might go through six or eight contracts before you get a house under contract that actually closes.
Scott: Quick, just one question here. So if I’m trying to—I assume that this person’s problem in terms of buying the next home is, they don’t have any money with which to buy the next home until after they’ve sold their first home. Right? So how do you get around that problem? Do you just use a home equity line of credit or something like that to bridge the gap? What’s your advice there?
Mindy: So you don’t want to be stuck with two house payments. I don’t care what the market is like. You don’t want to be stuck with two house payments unless you can afford them both. What happens if some fluke, and your house doesn’t sell but now you’ve got this other house to buy? I would recommend looking into the Bridge Loan, which is a loan that bridges the gap between the home purchase and the home sale.
But I would also look at short-term rentals where you sell your house, you get it completely done, you’re on the way to buying a new house, and you move out of your current house into a rental for a couple of weeks or a couple of months until you find a new property. Or doing the post-closing occupancy agreement where you work it into the contract at the time that it’s being signed. That you will be renting the house back. This happened with the last house I sold in the area. The buyers knew that this was happening. They offered it before we even asked.
Scott: That’s great.
Brandon: All right. Question number four?
Scott: Question number four, I have rehabbed my first property. The problem is that I had my GC hire a foundation company which is not reputable and did not do the foundation work with an engineering evaluation. The house is rehabbed really nice. The buyers have no issues with the rehab, however, most of the interested buyers are asking about this engineering evaluation report which I cannot produce. Any advice would be appreciated. I’m having difficulty selling the property.
Mindy: Go get another engineering report. Go and I mean, I can understand, especially in Colorado, we have shifting soils and like a whole lot of whoppiness. You want to get a licensed engineer out there to inspect the property and then you can present that report to people. So if the original guy wasn’t licensed, just go get somebody who is.
Brandon: That’s funny, I remember earlier, I told the same story. Almost the exact same thing happened to mine. It wasn’t the report necessarily but it was the non-reputable contractor didn’t have a thing so I just had to go get another contractor to go in there and verify the work was done correct and that satisfied what the lender and the buyer wanted. So, very cool.
All right well that was the end of the Fire Round. I don’t think we need to do Famous Four today since we’ve obviously done this. But maybe we should. Mindy, other than your own—we’ll do it anyway—it’s time for the Famous Four.
All right, Mindy, what is your famous real estate related book besides your own? Come on.
Mindy: Besides my own?
Brandon: Everyone’s got a book. You get a book, you get a book, you get a book.
Mindy: I can’t say the book on rental property investing? That’s a really great book.
Brandon: You took me over, Scott. That’s amazing. Hey Scott, eat that.
Scott: So dejected.
Mindy: No, The Millionaire Real Estate Investor.
Brandon: All right. Whatever, don’t say mine. I don’t care. Don’t say mine.
Mindy: I don’t like your book.
Brandon: Whatever, I don’t care.
Mindy: I love your book.
Brandon: Number two—your turn, Scott. You ask it.
Scott: What is your favorite business related book?
Mindy: Okay, so I don’t know if I said this. I can’t remember what my answers were on Show 129, but my favorite business book lately is The Richest Man in Babylon. It was written in the ‘20s by George S. Clayson and it just tells this story—it was written in Shakespearean English, which I love, and it tells a story about this kid, like oh how do I become rich? And he was like, be frugal, invest with people you trust, don’t be so quick to spend money that you don’t have, and it’s just all these basic concepts that ring true today and it’s just, I’m a sucker for Shakespearean language.
Brandon: Alrighty, well.
Scott: What do you do for fun? What are your hobbies?
Mindy: I have two girls so I do a lot of stuff with the color pink. No. I like to ride my bike. I like to do long distance cycling. I like to snowboard. I love to snowboard.
Brandon: Wow, I did not know you were a snowboarder. That’s cool.
Mindy: I am a snowboarder. I am an amazing snowboarder. Almost made the Olympic team.
Brandon: Are you lying?
Mindy: Yes, I’m totally lying.
Brandon: All right, number four.
Mindy: I almost made the Olympic team—it was amazing!
Scott: Mindy actually comes in and some days just starts her day off with a standing backflip. Just to kind of get ready for the slopes.
Mindy: That’s not a lie at all.
Brandon: All right, number four. What do you think sets apart successful investors, especially when it comes to selling properties, from those who struggle, give up, fail, never get started?
Brandon: Hmm, they learn.
Mindy: If you are going to be—this is a successful investor. If you are going to be a successful investor, you have to know what you’re doing.
Brandon: I love it. Very succinctly put. All right, well—
Scott: We don’t ever comment on that enough though, the successful part of that. Anybody can become an investor. You just have enough cash. You buy a property, it could be a bad property, and you get started, right?
Brandon: I’m an investor, look at me.
Scott: But yeah, in order to be successful in the long run, you’ve got to know what you’re doing and have the resources to do it.
Brandon: All right, well. I like it. Good deal, Mindy. Scott, you want to close us out? Last question of the day?
Scott: Last question. Where can people find out more about you, Mindy?
Mindy: They can give me a call at—I am all over BiggerPockets.com. I am in the forums. I am in the podcast, the BiggerPockets podcast, the BiggerPockets Money podcast. You can reach me at [email protected] or you can send me a private message. I am probably your colleague on BiggerPockets because I am the first colleague for anybody who has signed up after I think like February of 2016. I have 400,000 colleagues.
Scott: So she knows you on a very personal level already.
Mindy: We’re all best friends.
Brandon: All right, so the newest book from BiggerPockets is out right now by Mindy Jensen. It’s called How to Sell Your Home. Go pick it up at BiggerPockets.com/SellYourHome. And with that, let’s get out of here, guys. Because we don’t need to do a long outro because you know, we just did a long show. So Mindy, thank you so much for writing that book. It’s going to help a ton of people be able to sell their properties for more money and thank you, Scott, for hanging out with us today.
Mindy: Thank you very much for having me. This was a lot of fun. I like being on this side of the microphone sometimes.
Brandon: Well, good. All right, guys. Thanks so much. Take it easy. For BiggerPockets.com, this is Mindy, Scott, and Brandon, signing off.
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