Ready to sell our Flip House... but how?

Question

My partner and I are just completing our first flip house in the San Fernando Valley in California. We are looking for options to sell it. We'd like to avoid having to pay the 4 to 5% in commissions, if we can! But, we'd also like to sell it fairly quickly.

Any advice would be appreciated!

Michael Plante · Answer

you can get it listed on the MLS  with pro photographer for $7 a day and you get a yard sign as well

Your contact phone number is on realtor dot com, Zillow etc

I just sold a place myself and saved $15,000 in commissions

If you want to do an open house s real estate agent does it for you for $200 and supplies the contracts

Trevor Baker · Answer

We did end up going with a broker who was highly recommended by a friend and who gave us a good deal on the commission.  The winning offer came in after the second open house.  We closed in about 5 weeks and just got our check!  Very happy!

Now searching to find our next fixer project!

David Dachtera · Answer

@Trevor Baker,

If you price under market, can you still meet your financial goals?

That's one way to get a lot of interest quickly. Let the buyers bid it up between them.

James Wise · Answer

The exposure you get using brokers more than pays for the 4-5% in commission. Trying to sell without the MLS is going to a gun fight with a knife.

Jonathan Minerick · Answer

List it on the MLS with a flat fee agent (costs ~$100 in CA). You need mass market exposure that the MLS gives you, but you don't need to pay a big listing agent commission.

Offer the buyer agents a fair commission on the MLS (typically 2.5%). You can use a flat fee attorney/agent for ~$2,000 to handle all the paperwork, so you're covered there.

In the best case scenario, the buyer comes along without an agent and you end up only paying the flat fees to the agent/attorney.

Note that not all flat fee listings are the same. In general, here's the big things you want to look for in a flat fee listing:

1. The listing MUST be on the local MLS.

There are hundreds of MLSs in the United States. Sellers want to be on the MLS that covers the area where their home is located, so they can offer a commission to LOCAL buyer agents.

2. Cost to list + changes to listing.

Can range from $100-$400 for the exact same listing on the MLS. Watch out for fine print that requires an additional fee at closing. Make sure you are able to make changes to the listing after it has been posted for a nominal fee.

3. Photos on MLS.

Make sure you can upload at least a dozen photos. Some services offer a great price, but it's only for 1 photo - which is not useful for most properties.

4. Length of Listing.

Get at least a six month listing and be sure that there is no charge for cancellation.

5. Fine print.

You should never be required to use any closing service (e.g. escrow) provided by the flat fee service agent and you should not pay them any extra commission if the buyer comes without an agent.

We've found that a home selling boils down to getting just three things right 1) get pro photos, 2) offering a fair buyer agent commission on the MLS (typically 2.5%), and 3) price it right, which you'll know once you list (lots of offers = too low, no offers = too high. Either way you can adjust accordingly).

Jean Bolger · Answer

If you have a buyer come along who has signed an agency agreement they probably expect you to pay the buyer side of the commission, so it's not likely you'll pay 0% commission anyway.From what Nick said, my guess is that's you'd be far better off just using a traditional MLS sale through an agent.  I'm not in California so I don't know your process, but it can get complicated anywhere. Plus, you'll get far more exposure by being on the MLS than you will from that FSBO sign in the yard and Craigslist ad.

Nick G. · Answer

Hey @Trevor Baker, I think you might be the same Trevor I've met at the Mimi's meet up (I'm the guy who's a CAR director.) Congrats on finishing the that first rehab!

If you wanted to try to sell it yourself, this is the market to do it in, and honestly, it's not that hard to sell a property in general, especially a turnkey one. That you could probably do no problem.

The difficult/risky part about the real estate process is the escrow, especially in the ridiculously litigious Southern California environment we have here. The financial and contractual risk involved with being in an escrow is why most people go through agents, and are better off doing so. The reason that good agents have earned 5-6% on home sales for about a century is very similar to why attorneys are so expensive - to put it very generally, for a 5-digit price, they're protecting you from 6+ digits of loss/risk. 99% of people would probably do best to never represent themselves in a court case, and it's not too different in SoCal real estate (other states may be much more friendly to FSBO's.)

Anyhow, you shouldn't have any problem selling it yourself, that's the easy part. Getting yourself through escrow without being taken advantage of or sued will be your biggest challenge, and FSBO's attract sharks like blood in the water out here, so you'll want to be careful.

Feel free to reach out if you want more specific advice or tips, I know the SFV well and I've helped a handful of people who have gone the FSBO route over the years. Either way, see you at Mimi's in a couple weeks.

Nick

8O5.49O.15O2

Steve Vaughan · Answer

If you're comfortable with your pricing and have comped properly, put a sign out and see what happens FSBO for a week.  Low hanging fruit.  Low consequences.  You can always list if it doesn't work.

Again, if priced properly and you are comfortable with the sales process you could also explore flat fee listing services.

Most Jack and Jill homeowners know nothing about buying or selling real property and would be advised to retain a pro.  Where are you at on the experience spectrum @Trevor Baker?

David Michael · Answer

There are multiple routes. First route is an Agent. Although your reluctant to pay the commission the service a licensed realtor provides is worth the extra bucks. You could also find a good agent and begin a long term relationship and revisit the commission agreement later. Another option is to obtain the license yourself.