time on market?

Question

not sure really where to post this so I'll post it here.  I was curious as to what the average time on the market everyones flips are going for these days?  I am trying to gauge my local market and whether it is better to buy and hold or flip in this dismal market.

J Scott · Answer

Ryan -

Try staging and bonuses for the buyers agents.

If you're getting interest (second showings) but no contracts, it's because the buyers are on the fence and can't make the jump -- staging helps them better visualize the space and the agent bonus will push the agent to take some control of the situation.

Paul B. · Answer

As with 95% of the questions you'll ask in your lifetime, the answer is, "It depends."

It depends on your goals, your risk tolerance, your financial picture, and so on.

For the most part, I think rehabs will still sell relatively quickly if they are nicely done, in solid neighborhoods, and priced to move. If you're willing to leave a little something on the table for the buyer, then you have a better chance at moving that property.

If you're paying hard money rates, then you need to move that property even faster, since the interest costs add up quick. At that point, it's all about how quickly you can turn the capital over.

If you want to flip, find a couple good Realtors and ask them, "What's selling fast these days?" and then see if you can find that product and make any money with it.

To do buy and hold, you'll need some cash, and you'll need to have access to long-term funding.

There are pros and cons to each method, and some properties will only make good flips, while others will only make good rentals. I'd spend some time looking at what your strengths are, business-wise and financially, then look at your goals, then look at the market around you.

Dell Schlabach · Answer

I wholeheartedly agree with the importance of staging.

Reminds me of the line in the book "shift" by gary keller, chapter on staging, he says the question is not, should you stage? the question is, how should you stage?

We price our houses at or just slightly above market value, never significsntly above as I have see many rehabbbers do.

But our houses are very well designed, priced fairly and well staged. Not staged quite at J. Scotts level but much better than the competition.

We are 27 dom on average the past two years,  with no houses on the market for over 90 days. We had seven of the last  twelve sold (under contract) the first week on the market, five of those multiple offers.

Last year we didnt have as many first weekend sales but we were at 31dom avg while average dom for our area was 144 dom.

Today avg in our area is around 90 dom.

I contribute a significsnt part of our success to good staging, as well good redesign, colors, landscaping and in general making your house look better then our competition, and not overpricing the homes.

Ryan Pyle · Answer

I will echo what has already been said. If your rehab is done well and you are priced better than competing properties of similar size, location and attributes, you should be under contract within a few weeks. As John T. Reed says in his "Fixers" book, successful flippers should be going for the fast buck, not the last buck. I often remind myself of that when pricing my properties.

Here is a breakdown of my current flips and DOM:

6113 Harvest Ln- list date 12/31/10 (bad timing)- under contract 3/6/11. This house is only 1,009 sq ft and on a slab. I wouldn't suggest trying one like this unless you know what you are doing because these smaller houses can be harder to sell, hence the 65 DOM.

3018 Algonquin- list date 3/7/11, under contract 3/15/11. Great house, easy to market.

5030 Rambo- list date 3/28/11, have  interested buyer. Will know if they qualify today.

3342 Coral- list date 2/8/11- still for sale. May have it under contract by the end of the week. I have a buyer that I am trying to get qualified. Like 6113 Harvest, this is not a house for the inexperienced. It's a 3 bedroom, on a crawl, with NO garage. But I got a good deal on it and wanted to take the risk.

5730 Clover Ln.- list date 1/9/11- still for sale. This one baffles me. It's a brick ranch. Only drawback is that it's on a crawl, but that isn't unusual for the area it's in. I've had 3 "second showings" with no follow-up. For now I'm chalking this one up to bad luck, but time will tell. I may be slightly over-priced.

All of my houses are completely rehabbed and done by licensed, experienced contractors.

I hope this helps.

Zac Coplan · Answer

many of the big banks will not lend to someone flipping a home for 30 days.  There are so many regulations that have been put in place.  People need real estate agents now more than ever.  There is so much to be learned in this ever changing industry.

J Scott · Answer

As Joel (and others) have pointed out, your DOM is going to be related to your pricing strategy, the quality of your work, etc.

Personally, we try not to get greedy, and attempt to price our rehabs at the low end of the market, while still doing full rehabs.

Over our last couple dozen rehabs, our average time to first offer is less than a week, and our average time to final contract is about three weeks (the discrepancy is based on the fact that the first offer doesn't always end up closing or even getting to a binding contract).

Contrast this with the fact that the average DOM for other retail properties in my area tend to be just over 100 days, and you can see how the decisions we make (and the fact that we're willing to give up a few dollars in exchange for shorter holding periods) impact our average DOM.

Joel Owens · Answer

I can say the number one mistake made is basing a rehab off of the top of the market pricing.

In a declining market you want the best product in the bottom 50% of pricing for the immediate area.This shows a great product at a great value to buyers.

If you overprice and chase the market down you will stay behind the pricing curve and never sell.

The name of the game is sell it quick for a decent profit and move on to the next one and not get STUCK.

Bill Gulley · Answer

Hi, look in the general information for your market area in the MLS, time on the market stats might be there. You could also call the MLS and ask the question or any Realtor. You could alsolook at sold properties as comps for your property and note the time on market for your comps.

Properties will need to be viewed as to type and price range in the local area. Every market will be different so knowing what a flipper does in Miami won't help much in Austin or Denver. Good luck!

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