This is my first flip and I think it turned out great, the problem is I can get it to sell. I have done "for sale by owner" and now with an agent. Had a bunch of showings when I started with the agent but it has now died off.
The house blows everything out of the water in oak forest IL, so I cant understand why it will not sell. I am losing money every month having it sit around any suggestions on what to do? Places to post, marketing ideas, agents that want to show it.
It is listed all over the place this is the one on craigslist.
http://chicago.craigslist.org/sox/reo/4121227757.html
Did all the work myself so I take pride in my first flip.
Another thought: If you aren't getting feedback from your real estate agent, do not use that person next time. Your agent needs to be giving you good advice and helping you in your business. For example, if your house is overpriced (which seems to be the case), the agent should be telling you that. They should also be probing potential buyers, getting feedback from them, and relaying it to you. If the agent is looking at you and shaking their head saying "It's a beautiful house, I don't know why it's not selling", you need a new agent.
@Patrick L. - I mostly deal in first-time buyer, blue-collar type of homes. Around $80,000 retail in my area. And I've had potential buyers to confront me with stuff like:
"I know you only paid XXXXX for it"
"There's NO WAY that you spent THAT much on it"
"I'm not paying THAT much for it because I know you only paid XXXX"
I have one on the market right now and I suspect that this is an issue with it. And I have nice upgrades in it compared to others in the same price range. I'm the only brick house in the comparables currently listed, I have nice crown molding (never seen in an 80,000 house), laminate floors (again, an upgrade in my area for 80K), and no offers.
I have to agree with @Patrick L. that I don't think many retail buyers would even look at something like that. Most of their agents would even look into anything like that. Sure you will have someone here or there that will but I would guess that is an exception.
@Bryan L. maybe it could me more common in your market. Is this something that has actually been voiced to you multiple times?
I think we have been asked maybe once or twice out of 70+ flips why a buyer should pay so much more than we bought it for. For the most part buyers care how much the home is compared to the competition. They aren't going to pass up on a home they love because the current owner flipped it. In fact many agents get excited when they see our flips come on the market because they know we do quality work and the houses look nice.
I have had buyer's say those kinds of things to me. And recently I showed the house to a young couple. They didn't just come out and say it, but I could tell that they were thinking it. First off, they knew that I was flipping it. And they would ask questions like:
"was that crown molding already here when you bought it?" (several questions along these lines).
Every market is local, and ours is far from hot. And I mostly deal in first-time buyer types of homes. Young people who don't have the life-experience to know how the world really works. These same buyers are also the ones who will say, "well, Zillow says it's only worth XXXXX". These youngsters have grown up on the internet, and they think that whatever is on the internet is gospel. It's the same demographic who get totally freaked out over the word "mold", because they've never had to clean a house and noticed that every house has mold in it. The same demographic that wants every little item on a home inspectors report repaired before they buy the house (I've had them to come back with a punch-list of about 20 or so rinky-dink little items). Anyway, I'm frustrated at the moment because I can't get an offer on this house. I'm also a Realtor, so I know the comps, I know it's priced at the low end of the comps, and I know it's fixed up nicer than the comps. And all of the other Realtors also tell me that the house looks great and it's priced great. What I do know is this: In the future I will not record my deed showing my purchase price until after I get a solid contract to sell.
@Ryan S. , I think most of us have been in your shoes with this scenario. You've probably heard investors say that "you make your money going in". This is why it's CRITICAL to get your analysis right before you buy the property. I partnered with a guy about 10 years ago on a project that he wanted to keep throwing money at. He literally said, "We'll just raise the price if we spend more than we planned." I had to exit the project because he was setting us up for disaster.
You've got lots of great advice already here. I would add one trick that you might want to consider. I agree with @Ron Climer that if your house gets shown, it will eventually sell (assuming you get the price in line). What you can do is drop your price $100 every week or two so it will keep popping up in the MLS hot sheet. Listings get stale pretty quick and you have a price challenge to deal with so you need to refresh your listing often......after you get your price in line.
My project criteria (all calculations done BEFORE I buy):
- ARV estimate must be in line with the neighborhood (be conservative!)
- Pad remodeling costs 10% for safety factor
- Assume $5000 in buyers closing cost assistance (typical these days)
- Must have good curb appeal (no weird designs, ultra-modern, mid-evil, etc)
- NO BAD NEIGHBORS!
- Floorplan must have good "flow"
- Neutral colors and decor (off-white/beige walls, white trim, white ceilings, etc)
- Price it 5% under comps
This criteria usually results in a sale within 15 to 30 days. Hope this helps. Good luck.
There is no way to change what you have paid for and the rehab works you've already done at this time. But you have to figure out what to do about it now so you can minimize your lost.
Can you... offer owner financing or lease options to buyers who can't get financed today but in a few years they'll be able to (hopefully the market in the area will support your price by then).
Can you... move in yourself and sell your primary residence.
Can you... renegociate any existing loans on this house to see if you can lower interest or payments on it.
Can you... get refinanced.
Just some ideas...
Thanks so much for all the feedback that has come from this post. I am going to try a few of these techniques.
I agree with the zillow price thing I think that it might effect it, but only with new buyers like you were staying. People that are "internet born"
I really like the idea of the 100$ drops to put it on the hot list. Does this work with commission costs? If I raise the commission on the seller side, does this trigger agents that it has been increased? Putting it on there "hot list" for a bigger commission and a faster sell for me.
Very nice job Ryan!
Did anyone else notice the FSBO sign? Is it listed? Might have missed that, but if it's a FSBO and you've had no luck, get it listed.
That is a cheap toilet, I'd take that off in the pictures.
I'd also turn off the indirect lighting in the ceiling, it first appears (to me) as it being a painted contrast and colors seem to clash a bit, IMO. I'm sure it looks different in person. Like the ceilings.
I'd also not say it's the nicest in the subdivision, that tells me I'm buying the elephant. It means my property won't appreciate as I'm already at the top end and competing with homes in other neighborhoods.
Consider staging that dining room, the diagonal tile is pretty busy, but nice, set it off or balance it out with furnishings. All the lower hearth room needs is a small table and a couple nice leather chairs.
All good comments up there too, and I agree, any house priced right will sell. :)
I looked this up and in my very own opinion you are a good $35k+/- above market. Most of your neighborhood for similar product is around the $180k price. I don't see anything in my quick look that sold for above $190k that is not greater than 2,000 square feet. (Your close to 1,400) You did a nice job with the work but you priced yourself out of the market. If it were me, I would likely drop to $195k and see if someone wants to haggle. You might end up at $190k +/-. A solid comp is a couple of blocks from you: 15618 Sierra Drive, sold in April 2013 for $188,000. Hope it works out for you.
This house just sold one street over
http://www.zillow.com/homedetails/15505-Orogrande-Dr-Oak-Forest-IL-60452/4222977_zpid/
And also this is my neighbor
http://www.zillow.com/homedetails/15612-Orogrande-Dr-Oak-Forest-IL-60452/4222948_zpid/
The 15618 Sierra Drive home was not even remodeled. I really hope I do not have to come down 35K! I was thinking to just to drop it a little at a time to get back on the "hot list" for agents.
This house just sold one street over
http://www.zillow.com/homedetails/15505-Orogrande-Dr-Oak-Forest-IL-60452/4222977_zpid/
And also this is my neighbor
http://www.zillow.com/homedetails/15612-Orogrande-Dr-Oak-Forest-IL-60452/4222948_zpid/
The 15618 Sierra Drive home was not even remodeled. I really hope I do not have to come down 35K! I was thinking to just to drop it a little at a time to get back on the "hot list" for agents.
What Dion found others will find, consider showing the comps on the kitchen counter if you can get them in there! :)
Ryan, I've asked several Realtors in the past about raising the commission to encourage cooperation but I got a really flat response. They told me that raising the commission wouldn't really have any effect. What Realtors want are houses that will sell quick regardless of the commission (assuming it's within the normal range). It's not worth the extra hassle of multiple showings and the begging and pleading it takes to talk someone into buying something that's over-priced. In fact, I've had several occasions where the Realtor voluntarily LOWERED their commission to help close the deal. If it's priced right with the right appeal, they'll be all over it.
Lower the price and sell.
Joe Gore
@Ryan S. you may be wanting the value from these but I don't think they are good comparables for you without an adjustment.
Comp #1 has a lake view, it has a lake in the backyard. Comp #2 is bigger in the GLA and the Lot size.
Bill has a good idea and underlying point. Folks are not going to "try" and make your value work, they will look and draw a conclusion. Buyers will tend to be conservative in their methods as well.
@Ryan S. Drops to stay on the hot list are good and all, but how many "drops" will it take to get it into the supported price range? If you're $15,000 above the higher end of the comps and you're dropping $100 a week, it will take you about 3 years to get into the comp range. What would it cost you to hold that house for 3 years? I'm guessing it's more than $15k.
In other words, consider your savings on holding costs as profit, and maybe be more agressive in the price drops.
If you have it with an agent and it isn't getting showings the only reason is because it is to expensive and it either isn't showing up when agents are looking (Above the clients price point) or they feel it is overpriced and aren't going to waste time looking at it.
Maybe you can find some comps to justify a high price but others have had no issues finding others that show the place is way overpriced. People aren't even asking to see it so you know if it walks like a duck...
Talk to your agent and tell him/her that you want to price the place right to start getting some foot traffic. You don't have to give it all away to start but make a significant drop to get people looking, then maybe do the small drops to keep it in fornt of people.
One of my podcasts featured guest waqs a feng shui lady and she analyzed my house for why it wasn't selling. I made the changes she suggested and got an offer over my asking price within weeks. PM me if you want a link to the podcast.
I think the input you have received is excellent and I believe Colleen is right on. As your looking for input, I would hang the mirrors, get rid of those chairs, stage some of the rooms, turn down some of the lights and reduce the price and think about "Sellers Assist" as a further inducement.
Offer to pay all closing cost and give the buyer a check of $5000 at closing. Another thing the kitchen is very small.
Joe Gore
Good clarification by @Adam Johns ..... drop your price to get it in line with comps first.....then do the incremental price drops to stay on the hot sheet.
Get it professionally staged. Cost is different everywhere but normally WAY lower than your first price drop. People have to connect the house and a professional "stager" will make every room feel like home and draw them in.
By the way, I am not a stager or designer. :)
Just my 2 cents.
Jerry
I think price again is the obvious factor here. Again as others have mentioned it is very taste specific. With all that detail, I look and see that if I don't like even one thing in the house I am already paying premium top dollar for every square inch. This means you have to find the buyer that loves everything.
A couple things that could be a factor that I havn't seen mentioned. The property is located right across from the elementary school. I hear that ane think I am going to be up daily at 7am with screaming kids on my front yard. Just lots of activity out front from 7am -5pm daily. Might not be the case but it was one of the first things that popped into my head when I read that. Also looking at the pictures, the kitchen has beautiful finishes but is also very small. Can't open the refridgerator and the stove at the same time and maybe the dishwasher as well. With all those appliances in such a small kitchen there alao can not be a lot of room for cabinet space. Both of these factors are difficult to deal with but alao reflect in asking price and might have been over looked. At the end of the day you will need to be in a better $/sq ft range for a sale in my opinion. Good luck and I am interested to see how it goes going forward!!
Everyone has harped on the fact that you are overpriced however I don't think that's the whole story. I've sold houses priced $20k above the neighborhood before. It doesn't always work but my suggestion is as follows.
1. Get your house staged- Buyers are very emotional!!!- They don't operate off what the real value should be- No one makes an offer unless they either feel it will not be there tomorrow or feel like other people want the same thing. The fact that you have a rolled up towel in the bathroom and a plain white one thrown over- Yikes!!!. Your dining room seems to be staged with office chairs- HELLO.. It looks like that from my end. Some of your blinds are up and others are down.. When I say stage do not do yourself !!
2. I would get rid of the non neutral things however staging can neutralize them. Like removing the giant clock thing on the wall- however with some high white chairs to make it look like a breakfast area it might not look like wonderland that much. Also that wall with multiple colored squares- I would paint that over or at least stage so people know what to do in that room.
3. Hang the mirrors in the bathroom- someone mentioned them before and for a family that looks very dangerous they are sharped edged and sitting on the vanity.
4. Once you've staged I would take NEW pictures- as much as the MLS allows - ours is 30. I would turn on all lights in the house and take the exterior picture at dusk. Somehow makes houses look so much nicer. Take ever room- These pictures you seem to be showing us the things you are most proud of instead of the entire house. You've shown me your clock but I cant identify a bedroom. You've shown me two pictures of your coffered ceiling but I cant figure out if you have two full baths or one full and one half because only mention of my bath area is thru a mirror. The second one you showed me is your toilet and vanity which makes me think only one full bath in this house???
You've also showed me zero back yard- where will my children play?? Is there a basement- No pictures for me to tell. If people shop online first them give them something to shop.
5. Oh yeah and then drop the price- New price with new pictures will get some new buyers coming thru. After a certain time on the market people begin to wonder what's wrong with the house.
6. If it was me personally I would change out the fan in the dining room and put a chandelier to show off your tray ceiling but I'm into the whole chandelier thing. Can someone see themselves living in your home right now- I think you may need to give them a little help seeing themselves having family dinners and watching tv or even sending kids off to school.
I think with some nice furniture your coffered ceiling will look beautiful.