Winnipeg, MB · Member since 2013 · 28 posts · 8 votes
I received an offer today on a house I flipped. It's been on the market for 55 days now. No other offers. My market is a balanced market with average days on market being 35. I had it listed for $149,900, dropped the price to 139,900. After going back & forth with the buyer the best we could get out of them was &129,400. My break even is $120,000 & I have to split the profit 50/50 with my partner. We were hoping to make at least $10,000 each but this will only be $4,700 each. Should We accept the offer & move on to the next flip or try to hold out for a better offer. Showing are down to 1 ever other week now. And staging is costing us $1100/ month. What would you guys do ?
Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes
10y
Only you can determine whether you should take it or not. If you have lost your passion for this deal, it's best to move on.
However, if you and your realtor got your numbers right, then it's less about the price and more about standing out in the crowd.
The problem I've seen is that while you listed your property for 149,900, there were dozens of other houses identical to yours that went on the market at the same price.
A month or two later the realtor comes to you and says, "we're not getting any traction, lets drop the price."
The problem is, dozens of other houses were given the same advice.
So how to stand out in a crowd?
1) Stand out to the realtor: Realtors sell houses!!
If a realtor is shopping for his client and is looking at all the houses in the 150k range and sees your property with a 2% selling agent bonus *with full offer. Which one do you think he will be pushing to his buyer.
2) Stand out to the buyer: So your buyer is looking at 2 identical houses, in 2 identical neighborhoods, with 2 identical floor plans, and 2 identical price tags. However, your identical home comes with maid service for a year!! *with full price offer
Which one do you think the buyer (and more importantly, the buyers wife) is going to lean toward?
In both of these situations, offering the bonus may be cheaper than the negotiation of price tag, but the main thing is to stand out.
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
@Paul Kuegle, my instinct says: if you feel that their Offer is as high as they will go, then take it. Hopefully you can regroup afterwards to see where future projects might require a tweaked strategy. No need to beat yourselves up about it. Cheap education really.
AND a bit more money in your pockets than you started off with. There are many others out there who would prefer your outcome than their own! Cheers...
Flipper/Rehabber · Westchester, IL · Member since 2009 · 126 posts · 55 votes
10y
Markets will tell you what's really going on even though you might not like it, take the sale and the experience and get to the next one smarter for it. If 20k is your net goal then you haven't hit that yet (and won't on this deal) so I like to think you should naturally be better on the next one in terms of Every aspect. I think one of the biggest things that separates the Investors from the Hobbyists is 'velocity of money'.
Winnipeg, MB · Member since 2013 · 28 posts · 8 votes
10y
Thanks everyone for the advice! It is true some profit is way way better than no profit. I just texted my agent & said I'd accept the offer. I was going over in my head where I went wrong & it was with the renovation budget. I originally estimated $26,000 & it ballooned to $36,000. Then because of the overages I tried to increase my ARV by the same amount which then priced the house out of the market and the buyers just passed on it. Then it sat to long and buyers don't like that. I defiantly learned huge lessons on this project. On to the next!
Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes
10y
Only you can determine whether you should take it or not. If you have lost your passion for this deal, it's best to move on.
However, if you and your realtor got your numbers right, then it's less about the price and more about standing out in the crowd.
The problem I've seen is that while you listed your property for 149,900, there were dozens of other houses identical to yours that went on the market at the same price.
A month or two later the realtor comes to you and says, "we're not getting any traction, lets drop the price."
The problem is, dozens of other houses were given the same advice.
So how to stand out in a crowd?
1) Stand out to the realtor: Realtors sell houses!!
If a realtor is shopping for his client and is looking at all the houses in the 150k range and sees your property with a 2% selling agent bonus *with full offer. Which one do you think he will be pushing to his buyer.
2) Stand out to the buyer: So your buyer is looking at 2 identical houses, in 2 identical neighborhoods, with 2 identical floor plans, and 2 identical price tags. However, your identical home comes with maid service for a year!! *with full price offer
Which one do you think the buyer (and more importantly, the buyers wife) is going to lean toward?
In both of these situations, offering the bonus may be cheaper than the negotiation of price tag, but the main thing is to stand out.