Trouble selling my renovated flip house

Trouble selling my renovated flip house

Specialist · Baltimore, MD · Member since 2016 · 384 posts · 318 votes

So just like the title of this post says, I finished the renovation of a house. I put it on the market, admittedly, for more than it is worth, and I had a few tire kickers but no offers. 4 months later, I am now at 5k below what it is actually worth and offering to cover most closing costs but I am still getting no offers. The one problem I did not think would have such an impact is that the house is across the street from train tracks. It's a quiet commuter train that runs on these tracks during work hours only and doesn't use its horn. I put all this in the property description a few weeks ago hoping that it would help but still no offers.

I could keep dropping the price. I have a little bit more to go and not go negative, but is this my only play? I talked to a few agents in the neighborhood that move lots of inventory, but still nothing. Should I offer an extra $500 to the agent who brings me a buyer that closes? Extra $1,000? Should I try to work with a wholesaler or will this just tie up my property for a month or more with no results? 

I am also considering taking the property off the MLS for a month and then re-posting it.

Are there other things I could do to sell this property?

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Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
5y

@Russell Gronsky sorry to be beating up on you I swear I’m trying to help, but if you aren’t using a broker AND are trying to list on the high side of the price range that’s a classic recipe for failure.

Stop the bleeding, get someone whose job it is to sell houses to list it and listen to them.

My mom was a pretty successful broker and when a prospective client would tell her “it’s worth this” she would say “it’s worth that to you...congratulations, you own it”

See this reply in the discussion

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  • Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Russell Gronsky if you can get it fresh (30 days) I would definitely consider coming off and relisting. Your comment “5k below it’s worth and no offers” is inaccurate—the market is telling you it’s not worth that. Take what you “need” to make out of the equation. COVID holidays ain’t a great time to list so trying again in the spring may be your best bet.

    With the train track situation I might set the price gaspably low and hope for multiple bids. Your strategy right now is riding this thing down

  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    Hello @Russell Gronsky,

    When you spoke to the top producers in your market, did they mention anything about your asking price? 

    High price and lack of exposure are typically the issues with listings that sit on the market. You can't do anything about the train tracks but you can adjust the price to help homebuyers look passed them. The additional exposure can come from paid ads, prospecting buyers and brokers in the area, etc. 

    Lastly, taking it off of the market and re-listing it at the right price can help in situations like yours.

    Best of luck to you on this deal!

    Abel

    REbuild Team - eXp Realty5234 Reviews
  • Real Estate Agent · Houston San Antonio Dallas/Ft. Worth, TX · Member since 2020 · 5 posts · 1 vote
    5y

    @Russell Gronsky Certainly! Have you considered Offering financing?

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Whats the address? Ill givenyou the brutal truth. 

  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    I don't think taking it off and putting it back on is a solution. Any buyer's agent worth their salt will notice that right away and consider it a tactic. Your price isn't 5k under value or else it would be sold. You didn't talk about your agent at all? Do you have it listed on your own with a transaction brokerage? That won't help either. Every flip should be marketed and sold by a top agent. When you do a flip and go FSBO or brokerage-lite, you are telling all the buyers you are cheap and trying to save money. I would just drop the price to its real value.

  • Pomona, NY · Member since 2016 · 375 posts · 217 votes
    5y

    One of the biggest mistakes a flipper can make is over listing a property. Is the market HOT !!!!! yes it is, doesnt mean you over ask, allow the market to bring it over asking. You should pull the listing and relist in 30 days. Buyers notice price drops and dom, this in the buyers and agents eyes may represent an issue with the property especially when inventory is moving at a rapid rate. If the comps your agent showed you prior to listing the property back up her representation that the neighbor is desirable then I doubt your the only property facing the tracks and that would be your issue. Another factor not sure when you listed but the market does slow a bit when the holidays hit, so always account for that decrease in buyers for the time being. Like I and others have mentioned, remove it for 30 days and relist and see where your activity goes. Also has the agent done a brokers showing? my agent did this on my last 2 flips and received alot of feedback from other brokers. If your agent did do one, id certainly ask what the agents are saying. Best of luck

  • Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Russell Gronsky sorry to be beating up on you I swear I’m trying to help, but if you aren’t using a broker AND are trying to list on the high side of the price range that’s a classic recipe for failure.

    Stop the bleeding, get someone whose job it is to sell houses to list it and listen to them.

    My mom was a pretty successful broker and when a prospective client would tell her “it’s worth this” she would say “it’s worth that to you...congratulations, you own it”

  • Investor · Nashville, TN · Member since 2019 · 92 posts · 96 votes
    5y

    @Russell Gronsky

    I don't know what your market looks like specifically, but being the current climate of the national real estate market, and low mortgage rates, there should be no reason for you to have to advertise or incentivize agents to acquire a buyer. Take a look at the amount of inventory in your market vs the number of closings. If inventory is down but closings are up then you should have no problem selling. This would mean your property is priced too high and/or you listed it during the wrong time of the year. A covid winter could also mean that not too many people are looking. You may have it priced too high RIGHT now but come the spring time you may not have a problem selling. If your holding costs are reasonable then I would re-list in the spring. 

  • Appraiser · Rosemary Beach, FL · Member since 2009 · 29 posts · 28 votes
    5y

    Have you considered a appraisal?  The railroad tracts influence the value.  So by how much is the question.  Ask the realtor or broker how much does those tracts hurt my property and they do despite what you are hearing.  This is what a appraiser calls incurable functional obsolescence.  How many buyers stand there and look at the tracts and tell themselves little Johnny will love play dodging the train.   It's a problem.  So what is the discount, because it is something.  People don't like power lines, trains, busy streets, crack houses, commercial business's next door.  These are things you need to considered when you buy the property.  You better be getting a big discount when you buy so you can discount when you sell.  Every broker knows there is a train track on that street and won't show to a family with kids because they know it's a problem.  It will be a young couple or single person that buys this house I bet.   So look for a house that is similar to yours that has SOLD that is next to train tracks and you have your answer.  When a appraisal is done for a loan this will come up and the appraiser will have to address it.  This is why lenders want a aerial of the property in the appraisal.  They want to see if there is anything across the street that is a problem.   Lender will want to see how the appraiser addresses this issue and what impact there is on the house it's marketability and value.  As you can tell there is a marketability and value problem.  

  • Rental Property Investor · Barstow, CA · Member since 2015 · 131 posts · 102 votes
    5y

    I will usually list at a significant percentage under market to get alot of eyes on it and then those people compete over it and eventually the real price shows up. When I do not do this right and have to lower the price I delist and relist as to not give the potential buyer a negative opinion about my property. Agents will know what I have done, and they might share it or they might not. Many people look in the mls to find a house they like and then go to an agent, those are the people I do  not want seeing that my property is being discounted. Also going forward consider in your analysis a fast sale expense or what they call your farv. Good luck.

  • Investor · Golden, CO · Member since 2015 · 8 posts · 4 votes
    5y

    Do the numbers work to refi and rent it out?  

  • Investor · San Antonio, TX · Member since 2019 · 576 posts · 307 votes
    5y

    Any feedback from people who have shown it? Have there been showings?

    They should be able to tell you what the problem is.

    If you aren't having showings you might want to make a new listing with professional photos if you didn't do that the first time.

    As other have mentioned December isn't usually a great time to sell a house either so that may have contributed to the lack of action.

    I definitely would not go with a wholesaler for this, it is tough to sell a property that has already been renovated for full retail price to a cash buyer.

  • Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    Let’s see the listing. This has been done multiple times on the forum and once the poster shows the listing they get feedback on why the house isn’t selling.

  • Member since 2019 · 1 post · 6 votes
    5y

    @Russell Gronsky Hi, Russell I’m a licensed agent in Atlanta and from experience when a property stays on the market longer than normal it’s usually because of pricing or presentation. Are you using professional photos for the listing or pictures taken with a cell phone?

    Also, the information about the train you may want to leave out of the description. Giving too much information can sometimes blow up a deal because it makes the buyer think that there’s an issue when it really isn’t. Hope this helps

  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    5y

    I lived by a train track one time. I will NEVER do that again. The train is a HUGE deal, even if it's just a commuter track. 

    I'm an agent and our market is HOT HOT HOT. However, I am seeing houses sitting for a long time because they are priced too high.

    Like others have said, it isn't priced $5k below market, it's still too high or it would be sold.

    I've gone under contract 3 times in 2020 because the market didn't support the listing price. We saw the home a couple weeks after it sat on the market, made our offer based on comps and were accepted. 

    What do the comps show? And a comp is a house on that same train track street, not one a block over. What do same-street comps show?

  • Specialist · Baltimore, MD · Member since 2016 · 384 posts · 318 votes
    5y

    Thank you all for the advice and comments. I had professional photos done and I'm using a real, full-service agent to list it, not a discount listing. 

    I just looked at comps again but none on the tracks. They are the next street over so I'll have to adjust for those numbers. However, it does give me a better idea of the ball park of the value. 

    Thanks everyone.

  • Lender · Baltimore, MD · Member since 2020 · 115 posts · 70 votes
    5y

    Also wondering if the house is staged? Staging can be a real game-changer if it is staged attractively.

  • Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    5y

    @Russell Gronsky, as noted, the tracks make a big difference.  The L in Chicago is a commuter line, and while I am not an agent there, I have friends that do and have bought near the Brown Line.  A little color: condos that back up to the L on the same street as my friends, with similar quality and size seem to sell for about 25-30% less than those that face the houses that backup to the tracks.  When you go to the next block, so the properties who share the alley with my friends, they get another 20-30% simply for not being on the street adjacent to the L.  

    If it were me, I would take off the market for a bit, and then relist at a lower price and get out from it. As Jonathan mentioned, good agents will know it is a tactic and not be fooled, but thankfully you are not trying to get the agents eyes as much as you are trying to get their clients to be interested. We have had a flip sit, and when we took it off and then resisted we had top producers (read well versed and smart agents) reach out assuming that it had already sold or something and for some reason just wasn't removed from MLS. So, getting it to pop up in agent and client's email alerts can only help in my opinion.

  • Investor · Northern New Jersey · Member since 2020 · 94 posts · 96 votes
    5y

    @Russell Gronsky

    I can't give full opinion because you aren't being transparent with any of the numbers. When you say you over priced it at one point and now you have it 5k under whats it worth makes absolutely no sense without knowing the numbers or where did you get ARV numbers from.

    From experience flipping tons of houses how could you miss that your property is on a train track. Thats a big big big issue if you over paid when it was distressed and then over renovated it.

    But with that being said I think your biggest issue is you missed the window for the market. Being on the east coast like you but more north I would never list a house for sale in the month of November, December or January. With the holiday season and the weather its the worse time. People are occupied.

    If you list and September or October and you do get under contract I would just pull it and re-list it in mid to late February when the market takes off.

    As a tip in the months while your down spend a few hundred a month doing targeted digital marketing via, Facebook, Pintrest and Instagram for private showings. This has worked for me several times.

    Good luck. I hope your deal isn't one on very slim margins

  • Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    @Russell Gronsky 

    Totally fine. Just rent it. Some renters might not worry too much about the train tracks. 

    This happened to me after a renovation and I was trying to sell the house and it just didn't move. So, I simply put for rent myself and I couldn't stop my Zillow from blowing up! I had rented in a week or so.  

    It's very fascinating as our mind will only focus on one solution when there are several options. Oh, as for the hard money loan, I just refinanced the loan and paid off the HML, who was very happy. I know I was!

    The interesting thing I've come to realize about Real Estate Investing is that it is typically forgiving over time. I still have that property rented till this day and it generates pretty decent cash flow. Don't lose hope 😊 

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y
    Originally posted by @Ola Dantis:

    @Russell Gronsky 

    Totally fine. Just rent it. Some renters might not worry too much about the train tracks. 

    This happened to me after a renovation and I was trying to sell the house and it just didn't move. So, I simply put for rent myself and I couldn't stop my Zillow from blowing up! I had rented in a week or so.  

    It's very fascinating as our mind will only focus on one solution when there are several options. Oh, as for the hard money loan, I just refinanced the loan and paid off the HML, who was very happy. I know I was!

    The interesting thing I've come to realize about Real Estate Investing is that it is typically forgiving over time. I still have that property rented till this day and it generates pretty decent cash flow. Don't lose hope 😊 

     Ola you bring up a great point here on renting it. Many of my rentals, are ones that have flaws in it from an owner occupant standpoint, but dont matter as much to renters. Ive got a property that backs to a busy main road.  Basement level condos.  I get these properties cheaper than the other parts of the neighborhood or building, but end up with the same rents.

  • Real Estate Agent · Baltimore Maryland · Member since 2019 · 98 posts · 74 votes
    5y

    I see you're in Baltimore...what part? Message me the address and I'll see I get any bites in my database. Also, I had a listing like this in the past...fully renovated but wouldn't sell. Part of the problem is that it was originally a FSBO who kept in on the market for 2 years straight. It was a very stale listing by the time I got it. If you can't find a buyer within the next few days, I would take it off for 4-6 weeks and then re-list it.

  • Rental Property Investor · GA · Member since 2020 · 30 posts · 8 votes
    5y

    @Russell Gronsky

    See if you can rent it make cash flow on it.

  • Member since 2021 · 1 post · 1 vote
    5y

    @Russell Gronsky i’ve been in the situation before and I’ve never sold a property loss. it may be best to take the property down and relist it in two months. Best of luck

  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    5y
    Originally posted by @Evan Polaski:

    @Russell Gronsky, as noted, the tracks make a big difference.  The L in Chicago is a commuter line, and while I am not an agent there, I have friends that do and have bought near the Brown Line.  A little color: condos that back up to the L on the same street as my friends, with similar quality and size seem to sell for about 25-30% less than those that face the houses that backup to the tracks.  When you go to the next block, so the properties who share the alley with my friends, they get another 20-30% simply for not being on the street adjacent to the L.  

    If it were me, I would take off the market for a bit, and then relist at a lower price and get out from it. As Jonathan mentioned, good agents will know it is a tactic and not be fooled, but thankfully you are not trying to get the agents eyes as much as you are trying to get their clients to be interested. We have had a flip sit, and when we took it off and then resisted we had top producers (read well versed and smart agents) reach out assuming that it had already sold or something and for some reason just wasn't removed from MLS. So, getting it to pop up in agent and client's email alerts can only help in my opinion.

     I lived in Chicago for a while, the L train will rattle your teeth when it drives past your apartment. I can't believe they're only a 25% discount.

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