First fip completed, however, it has been sitting on the market for 3 months! Help

Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes

Hi everyone! I am a new investor in the Hampton Roads Va area. In January I rehabbed my first property. The job was supposed to take 6 weeks it ended up taking 11 weeks. The intial budget was 73K including the price of the home and the final amnout spent was 85K. Despite the fact that I was over budget and time I am very pleased with the outcome of my first project.

I had a full price offer of 120k and a ratified contract within the first 3 weeks that the property was listed. However, the contract fell through and ever since then there has not been much activity. The home is listed with a real estate agent. Any advice as to how to proceed?

I am in the middle of a second project and want to get the first sold!

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Jeff CopelandBusiness Member

Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes

11y

@Megan Moulton-Levy - Try this:

Put together a nice "before and after" slideshow of the property, and post it on Facebook.

"Boost" the post for $50 to $100, and set the targeting for the ad to the demographic of your target buyer.

I stumbled onto this technique by accident, and sold a house (prior to listing it on the MLS) the same day! See below from an earlier post.

Can't hurt, right?

Originally posted by @Jeff Copeland at http://www.biggerpockets.com/forums/67/topics/183556-pre-marketing-flip-house-before-the-mls:

We recently had surprising success on Facebook with pre-MLS marketing. The property was a flip, so I created a Before and After Album on Facebook, then I boosted the post for $60 to my target demographic.

I wasn't really trying to sell it via Facebook when I posted the pictures (to be honest, i wasn't sure I even wanted potential buyers to see the "before" pictures!) - I just thought it was a good way to get some likes and promote my company - I know everyone is addicted to before and after pics and the rehab shows on HGTV.

There was a flurry of activity on the Facebook post and people started tagging their friends who were looking for houses.

When I stopped by the property on my way home that day, there was a buyer sitting there waiting for me. By the next day I had two offers in hand at full asking price - both directly as a result of Facebook! Cost me $60 rather than a 3% listing agent fee (I still paid the buyer's agent because the buyer already had one), and I also got like 100 new likes to my company page on Facebook (which was all I was really hoping for in the first place!).

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Adrian Chu
Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
11y
I would suggest reducing the asking price.
You can also rent it out and take it off the market, and try to sell again later, but I view treat as the worst-case exit strategy.
0 Reply
Kyle D.
Flipper/Rehabber · New Port Richey · Member since 2014 · 112 posts · 10 votes
11y
I'm assuming the asking price is to much. Lower the price and see what happens.
0 Reply
Richard C.
Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
11y
If it has been exposed to the market (and by your account it has) than the answer is price, 99 times out of 100.
3 Reply
Sonny Smith
Investor · Virginia Beach, VA · Member since 2015 · 9 posts · 7 votes
11y
Hi @Megan Moulton-Levy, I'm in Virginia Beach. If it's listed with a realtor, I would check with them first as to why the property has been sitting so long, and ask them what else can be done to get more activity. Are they marketing it properly? What are the comps? If the home is priced correctly, it shouldn't take that long to sell. Staging the property is something else to consider to help it sell faster if you haven't already done that.
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Megan Moulton-Levy
OP
Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes
11y
Thanks for all of the input.
There are comps in the area that support that listing price. I am having a hard time undertstanding why there would have been a full price offer on the house if it wasnt priced accutately.
@Sonny Smith, I spoke with my real estate agent today . His suggestion was to take the property off and put it back on at $119,900 and increase the marketing. I suggested staging the house but he thought that it would be too expensive for that price point. Do you know of a stager in the hampton roads area?
1 Reply
Megan Moulton-Levy
OP
Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes
11y
@Adrian Chu, my next thought was if it sits for longer than the summer I should rent it out and put it back on the market later. I thought the 6 month mark would be a good time to make that decsion. It is in Portsmouth VA close to lots of miliarty installments
0 Reply
Jeff CopelandBusiness Member
Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
11y
@Megan Moulton-Levy - Try this:
Put together a nice "before and after" slideshow of the property, and post it on Facebook.
"Boost" the post for $50 to $100, and set the targeting for the ad to the demographic of your target buyer.
I stumbled onto this technique by accident, and sold a house (prior to listing it on the MLS) the same day! See below from an earlier post.
Can't hurt, right?
Originally posted by @Jeff Copeland at http://www.biggerpockets.com/forums/67/topics/183556-pre-marketing-flip-house-before-the-mls:
We recently had surprising success on Facebook with pre-MLS marketing. The property was a flip, so I created a Before and After Album on Facebook, then I boosted the post for $60 to my target demographic.
I wasn't really trying to sell it via Facebook when I posted the pictures (to be honest, i wasn't sure I even wanted potential buyers to see the "before" pictures!) - I just thought it was a good way to get some likes and promote my company - I know everyone is addicted to before and after pics and the rehab shows on HGTV.
There was a flurry of activity on the Facebook post and people started tagging their friends who were looking for houses.
When I stopped by the property on my way home that day, there was a buyer sitting there waiting for me. By the next day I had two offers in hand at full asking price - both directly as a result of Facebook! Cost me $60 rather than a 3% listing agent fee (I still paid the buyer's agent because the buyer already had one), and I also got like 100 new likes to my company page on Facebook (which was all I was really hoping for in the first place!).
Copeland Morgan LLC4.770 Reviews
Website View Page
15 Reply
Shaun Reilly
Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
11y
Not to be a broken record but if it sits it is usually price.
Even if it IS something else you can usually "fix" that with price too...
Do you know why that full priced contract fell through? If it was financing then it might just be the case a buyer was willing to give you more of the bank's money than the bank was willing to. :)
2 Reply
Brenda Logan
Investor · Baytown, TX · Member since 2014 · 49 posts · 12 votes
11y
Are your pictures very good quality? Make sure they are bright.
Even small amount of staging can do wonders for the pictures. Doesn't have to cost, just take things out of your own house for the fireplace mantel and some flowers or pretties on the kitchen counter. Flowers and towels even shower curtain in the bathrooms makes it seem more homey. Retake the pictures if you add staging.
3 Reply
Sonny Smith
Investor · Virginia Beach, VA · Member since 2015 · 9 posts · 7 votes
11y
Megan, any drop in price will get more eyes looking at it. Your agent is probably right regarding using a staging company. You could do most of the staging yourself in the kitchen and bathrooms, such as bowls of fruit and flowers on the kitchen counter, towels, shower curtains, and wall art in the bathroom, etc. For example, here is a picture of a rehab that a friend of mine just did where they staged it themselves.
3 Reply
Megan Moulton-Levy
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Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes
11y
Here is a link to the place. I think the pictures are pretty good, however, @Brenda Logan I do agree that if it is staged I need to take new pictures.
http://www.zillow.com/homedetails/3-Cushing-St-Portsmouth-VA-23702/75390537_zpid/
@Jeff Copeland I do not have a company facebook page because I do not have a company yet. Love the idea of the before and after. Somthing that I will certainly look into.
@Sonny Smith GREAT IDEA!
0 Reply
Troy Fisher
Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
11y
The first question to ask is, why did the first offer fail? Inspection? Appraisal? Funding? That might give you a good idea.
From the rough numbers 120k list 87k rehab, I sure hope you picked it up for dirt, dirt cheap because there is not margin in that deal. [edit: Missed the part that the 87k included purchase]
Sounds to me like you probably over-improves the property!
1 Reply
Arissa Pedroza
Real Estate Agent · San Antonio, TX · Member since 2013 · 153 posts · 132 votes
11y
Most likely price but has your agent contacted all of the agents that showed it and requested feedback? That will really give you why it is sitting.
2 Reply
Megan Moulton-Levy
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Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes
11y
@Troy Fisher it was becasue of funding. She had no legal way out but I did not want to pursue taking legal action. You are right about over improving the property. I tried to stick to the 70/30 but budget got out of hand.
@Arissa Pedroza I hope to get some feedback from the Realtor.
0 Reply
Jesse T.
Herndon, VA · Member since 2014 · 1k+ posts · 324 votes
11y
How often are you getting showings?
I don't know your market in detail, but it looks a little slow and it looks like the Zillow Zestimates aren't too far off. I would try re-listing at 110 to 115K and see if interest increases.
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Jonathan Godes
Lender/Investor · Glenwood Springs, CO · Member since 2013 · 218 posts · 103 votes
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Why does Zillow have it listed, pending and back on the market so many times? It makes it look really suspicious to the average Joe.
4 Reply
Pete T.
Real estate investor · Las Vegas · Member since 2013 · 798 posts · 171 votes
11y
The price is too high and I would look for a different target audience if you consider renting. Military members will not consider craddock for the most part.
0 Reply
Jonathan Godes
Lender/Investor · Glenwood Springs, CO · Member since 2013 · 218 posts · 103 votes
11y
I think that you have "anchored" yourself to the $120k price because you had it under contract once. Just because one person decided initially to overpay, doesn't mean the property is worth $120k.
I am sorry, but after 3 months, the market has spoken and decided that the house is overpriced. Remember, you are an investor. You are not an emotional homeowner who paid too much for their house in 2006 and now is CONVINCED that their home just HAS to be worth at least as much as they paid for it back then.
Look at it this way, if you get out of this for what you have in it, you will have gotten out of your first flip with a great education for free!
3 Reply
Megan Moulton-Levy
OP
Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes
11y
The Zestimate might not but the comps justify the listing price. Zillow gets a little confused becasue it was pending at one point. Not sure how to clear the Zillow data.
There have been showings at least once every 2 weeks. The market is much slower than the Nothern VA area.
@Pete T., thanks for the input
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Megan Moulton-Levy
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Real Estate Agent · Woodridge VA, VA · Member since 2015 · 13 posts · 4 votes
11y
Well said @Jonathan Godes. I think you hit the nail on the head. Thanks for the insight.
2 Reply
Dawn BrenengenBusiness Member
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Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
11y
@Megan Moulton-Levy Zillow typically gets a feed from the MLS, so there should be no reason it's listed as pending if it's active in MLS. If your MLS does not have a direct feed, your agent should go in and "claim" the listing, and he should be able to change the status there. I think that's your main problem. Buyers think it's already sold!
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Jason Krick
Investor · Reading, PA · Member since 2014 · 196 posts · 118 votes
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The fact that it repeatedly says "pending" and "back on the market" literally every day would cause me, as a buyer to skip right over the house. When I bought my personal residence, I searched online and told my agent which ones I wanted to see. If others do this, they might not even stop to look at your house. Also, if you search the zip code on Zillow and use only "For Sale" from 100k-125k, the house does not appear in the results. I would certainly take everyone else's advice in looking at price, but the Zillow thing should be looked at as well, in my opinion. I didn't check any other sites like Trulia, Tedfin, etc.
0 Reply
David Avetisyan
Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
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Originally posted by @Dawn Brenengen:

@Megan Moulton-Levy Zillow typically gets a feed from the MLS, so there should be no reason it's listed as pending if it's active in MLS. If your MLS does not have a direct feed, your agent should go in and "claim" the listing, and he should be able to change the status there. I think that's your main problem. Buyers think it's already sold!
+1
The property is listed as pending, for awhile.
Typically, people don't bother with pending listings.
You need to make sure the correction is made on the MLS.
Good luck!
0 Reply
Brent Paul
Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes
11y
I agree with others. Most of the time if you don't get an offer in about a month your price is too high. The buyers at that point have moved onto other properties.
That's also a very important reason to get accurate comps for your area and it's not always an easy thing to do.
The question you have to ask yourself is how long can you keep this up before all your profits are gone?
Drop the price down to 110k and see what happens. It sounds to me like you priced it near the top of the market in that area.
What will be your exit strategy if you lower the price and in 3 more months it still has no offers? You always want to have a backup plan just in case. That should be done before you even purchase the house.
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Michael Hicks
Real Estate Investor · Rossville, GA · Member since 2014 · 218 posts · 96 votes
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I like @Jeff Copeland's idea. I don't have a business page set up yet but I do have a personal page. I put my last flip on the local Facebook yard sale page and had over 40 comments within a couple of hours. Had a full price offer same day from that post. I would have never dreamed it.
Others have mentioned feedback from previous showings which is a great way to get an idea of what buyers are thinking.
Also, staging with just a few items in the kitchen and bath go along way. No need to bring in a bunch of furniture.
After being on the market for that long, I would look hard at the price and comps.
Good Luck, Mike
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