7 Shortcuts for Selling Properties in Record Time

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I just realized this week that we had sold a property in Taunton, Mass – but I hadn’t told everyone on my team.

As they say, the key to success in business is good, honest and open communication…I guess I should follow that one more closely!

I actually felt really bad because I get so wrapped up in acquiring properties to keep the deal flow going, I sometimes forget to tell everyone when all our hard work finally pays off!

So to my acquisition manager John Fossetti…this is a public apology! 🙂

When you get an offer accepted on a flip, it is one of the most satisfying parts of my job – and oddly enough, the selling part is one of the easiest parts of the entire house flipping process! This is true just as long as you have stuck to all the house flipping rules and have fully leveraged the collective expertise of your house flipping team.

So what are the shortcuts to selling a property in record time?

As long as you keep to the seven principles here, you’ll find that selling is the simplest and most logical endpoint of the entire house flip process and they’ll help to keep you well into the black in every deal you do.

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Seven Steps to Selling Properties

1. Nail Your ARV

This number is the most important number in the entire house flipping process. As you may recall, ARV is short for After Repair Value – or what you will sell the property for once it is all fixed up and ready for sale. In fact, all of your house flipping 5th grade math flows from this number. Here is a brief summary of how it works using some round numbers:

ARV = $200,000

70% Rule = $140,000

Cost of Repairs = $40,000

House Flip Math: $140,000 – $40,000 = $100,000

MAO (maximum allowed offer) = $100,000

If you’re not sure of any numbers click here for a full explanation.

So, as you can see, getting that ARV right from the start actually begins with the end in mind<link> and helps you stay on track.

2. Get An Awesome Broker

Somewhat related to #1 above, the ARV flows from the excellence of your real estate broker to make sure they get you the most accurate comps – which as you see from above, everything flows from that critical number. This is why it’s so important to have a top-notch real estate agent who is an expert in that market. When you do this, use as accurate a number as possible from the start.

If you can get this number right – making sure your listing broker has realistic comps and is an expert in their geographic area, your selling process will go far more smoothly.

And the best place to find good real estate brokers is through networking and meeting people in the geographic market where you operate. Take their business cards and then write on the back of the card where you met them and then call them when you are looking in that market.

3. Make Sure You List the Property at the ARV

Like I mentioned above, we all make mistakes. I still hold to the theory that more mistakes you make the more successful you’ll be (just as long as you don’t keep repeating those mistakes, LOL).

If you’ve done all the work to figure your ARV and get your broker – who’s an expert in that half mile or so radius or neighborhood to your listing – to get the most realistic comps as possible, when you list the property for sales, refer back to your ARV and make sure you list it at that price.

Unless the market has dramatically changed – which is rare if you make sure you keep your rehabs to a month or two and no more – your ARV you began with should be the ARV you list the property at.

In the case of a property we just sold in Taunton, Mass, we had an ARV of $209,000 – but for some reason or another (my fault here most likely), we listed it at $229,000.

So there it sat for 30 days – and although we had a lot of activity, there were no offers.

We then got the bright idea to look back on our original notes…and the ARV was $20,000 lower!

Oops.

In this case, the market had heated up a bit more, so our ARV was a little bit low, but probably not as hot as $229,000. We dropped the price to $219,000 and then got a bunch of offers, one of which we accepted.

This leads me to the next point….

4. Be Fast on Price Changes

Failing fast is one of my other favorite expressions, which thankfully in the case of our Taunton property, we quickly realized our error and within 30 days (as well as due to the fact that there was activity but no offers) we acted quickly to lower the list price by $10,000.

We didn’t take three months to realize our mistake. We lowered it fast – within 30 days and then immediately started getting offers.

Aside from paying attention to your original ARV, when you are getting activity but no offers…FAIL FAST…then adjust accordingly.

So if you have a property that you listed at your ARV and you’re not getting offers within the first few weeks, admit your mistake and then drop the price. In our case, we dropped it $10,000 and then sold it at $216,000 – still selling it ABOVE the original ARV.

5. Clean It Up

It’s a fact that clean homes sell fast – dirty homes sell slowly.

Do everything you can to clean up the property and do what you can to make sure that every part of the entire property is as immaculate as possible.

Used car dealers do it – why shouldn’t you? When I bought my last truck before the one I have now, it was used and one of the main reasons I bought it was because is was so clean and new looking. Although it had 18,000 miles on it and was two years old, it looked brand new. Even the bed of the truck was glistening clean.

I bought it for nearly full price – primarily because I was so impressed with the way it looked and it had none of the remnants of the previous owner.

In the case of your house flips, do the exact same thing. Make sure everything, from painting the cellar floor (which we actually did in this property in Taunton) to cobwebs in the laundry closets (none at all thanks to our awesome cleaning crew) is sparkling clean. This goes for the outside of the property as well.

In the case of this property in Taunton, one of the bigger reasons why the house sold quickly because it was so sparkling clean – both inside and out.

6. Stage It

Staging sis something that we have started to do more and more – as it has really helped us to sell our homes more quickly. At first when we were doing this, we only did staging for our higher end homes, but now it seems like we do this with nearly every home we sell.

Although staging can vary in price from $300 to $1200 per month, it’s a small price to pay to sell the home as quickly as possible. If you’re selling a $100,000 property, a $1,000/month expense for staging may not make a whole lot of sense, so use your judgment here.

It just helps people to feel comfortable in the home and allows them to envision themselves in the home, with nice furniture and even many of the amenities including flat screen televisions and all the creature comforts. Staging is also very helpful in warming up a home and making people feel comfortable in it – so comfortable that in one case, people simply wouldn’t leave the house!

On that home, we got three offers that day and sold it for $5000 more than asking.

Staging is also very helpful in selling because it helps to help people envision how the home will look if you have an odd-looking space or a challenging layout.

7. Do Open Houses

Open houses are a great way for masses of people to come in and look at the property. We have found that not only is this a great social way in which to sell properties, but when combines with staging, it oftentimes allows for people to lounge around and really get to know the house with other people. This creates a sense of group validation and crowd interest – a valuable psychological tool when selling.

The more people want something, the more desirable that thing is. If there are a lot of people at the open house, then the people there feel validated in their interest as they see others interested as well.

In some case, people start to get comfortable in the house hand out and sometimes we have a hard time getting them to leave! This happened with this house flip – which sold in just two days.

If the property is not on a main street make sure that your listing brokers uses plenty of signs – signs out on main streets which point to the home and its location. In the case of the Taunton property, it was on a cul-de-sac so we had signs from the main street to the side streets all the way to the home itself – which was isolated a half mile from the main roadway. This is one of the main reasons why the open house was so well attended.

So make sure your broker schedules and markets a few open houses – a must for selling any flip.

If you’ve made it this far, please leave a comment below! What do you think? Are there any other tips you’ve used to help sell properties fast? Leave a comment below and let me know!

Photo: Robert Fairchild

About Author

Mike LaCava

Michael LaCava is a full time real estate investor, house flipping coach and the President of Hold Em Realty located in Wareham, MA. He runs the website House Flipping School to teach new real estate investors how to flip houses and is the author of "How to Flip a House in 5 Simple Steps".

20 Comments

  1. Great article!
    When the market wasn’t quite so crazy, we would list at slightly below ARV. We figure we make more money selling homes fast and being able to buy more, than we do trying to get every penny we can on a sale. With inventory extremely right we have been listing slightly higher than ARV.

    We have never staged, and people think we are crazy for this. Most of our sales are under 150k and we’ve never found a good staging company. I happen to think our houses look great without the staging. I can definitely see how staging would be beneficial.

    It is weird, but for whatever reason if we have it priced right, we get a solid offer about three weeks after listing. If we don’t have an offer in 30 days we lower the price.

    • So true Mark. Definitely pricing it right is most critical because even if you sold it for more than it is worth and a buyer accepts the bank may deny the financing. Certainly experienced this before. Under $150,000 is tough for staging and if you feel there is not a need because it is working without it then that is perfectly fine as well. Depends on your market. One thing you might want to check on is talking to a furniture rental place & try to bargain with them. You will have to do a little leg work but it may be a cost effective way to stage in a lower price home. We are doing that on some of our lower priced homes for around $300 a month.

  2. Thanks for the article, this is really good advice. I am going to add it to my list of reference articles.

    As you pointed out in your example property, the market had risen slightly from when you originally did your ARV and when you listed the house. I would suggest re-evaluating the ARV when listing the property, and to monitor any sales that occur during the rehab process in case the market is shifting. If any new comps bring down your value, there is still a chance to reduce the rehab cost if necessary, or better, if the new comp is higher, you won’t be leaving money on the table when you list.

    When I was building a new construction house a few years ago, the neighborhood became saturated during my build. As a result, we had to list it lower than we originally anticipated. It was the difference between making a profit and breaking even. If we had watched the market more closely, we might have made adjustments to the budget and still come out with a small profit.

    • You 100% exactly right Hugh and we do this but there was some confusion on this one with my team & me and the new realtor we were working with.

      This is especially true on projects that are going to be 6 months or more.

      Thanks for adding that as it so critical to know what the market is doing for better or worse.

  3. Good advice as always Mike.

    Folks have to learn to be brutally honest with their numbers. I always do a conservative ARV and estimate on the high side for repairs. The second point that I love in your article is all about “presentation and perception”.

    If your house has at least some staging and it shines because it has been “detailed” (just like the truck you spoke of”, you will always get more money.

    We used to tell homeowners getting ready to sell to have a pre-sale home inspection so they could take care of those annoying small defects before putting the house on the market. They would also discover if they had any unexpected major issues.

    When the new buyers had their own home inspection and none of those small repairs turned up, it made buyers have the “perception” that the home was well maintained and well cared for. It also made a larger repair that was needed a whole lot easier to swallow especially if it was disclosed up-front.

    Sharon

    • That is a great point Sharon. I am crazy about the details and not just because I want to do the best job possible but exactly like you said about perception. You only get one chance at a first impression.

  4. Another great post, Michael.

    Up until the past 6 months we listed our homes below retail because we want our properties SOLD, not For Sale!

    Lately, however, we’ve been listing full retail and still getting offers quickly – sometimes multiple offers. One of the reasons, I believe, is that they are immaculate and staged. Presentation is paramount! And, we stopped letting people see them before they were polished. Once someone has a bad image it can’t be fixed, so wait to show it until it’s done!

    • Thanks Karen. I agree and don’t like to show until it is immaculate as well inside and out.
      It has been a while but I found myself helping my acquisition manager helping one of my contractors to finish a house on a Saturday minutes before the first showing a few months ago. I was proud to see my manager taking that kind of action just as I would so I decided to pitch in with him.
      Great team work!
      Needless to say we try not to put ourselves in this position but deadlines are deadlines.

  5. Great post, I will be saving this one.
    On my first flip I did everything wrong except paying to much. The previous owner had 28 cats.

    That said it sold in an up market.

    As my father used to say a mistake is a lesson learned, if repeated again it becomes a failure.

  6. Michael Dorovich on

    Great article. I agree with Sharon’s point of being conservative on ARV and going on the high side for repairs.

    Any tips on how to get a broker to give you comps before you have completed a deal with him or her?

    Thanks!

    • Yes I agree especially if you are new or working on your first few flips. As you get more experienced you will get better at meeting your projections but you can’t control the market shifts.
      All about relationship building. When you go to meet them at REIA meetings or other events tell them what you are doing and ask if they would be interested in helping you find deals.
      They will be happy to run comps for you and put offers in.
      I have many different agents that do this for me each in their own markets.

  7. Michael,

    Great article, I am going to try the open house at a property I have fixed and renovated, the price may be too high for the market, and I am trying to get my wife to change it, since she is my realtor. When you are not getting offers, you have one of two issues, either too high a price or some major issues in the house. We have renovated the house and have no major issues, so it must be price. Hard to fire your wife as your Realtor, but listings that sit and do nothing are not good for her either, so we are pushing together to get this sold. The open house is the last thing we have not done, besides continue to lower the price. Home is on market at 85k, comp values are 75 and I am asking her to drop the price to the 75 level, so that we can get on and move to the next one. Tired of waiting and sitting on this one.

    Jack

    • I agree Jack. You should discuss your strategy with you wife or any realtor as to pricing structure going in. It is not always an exact science so if you decide to go with your wife’s suggestion on price that is fine as long as she agrees lets say after no more than 30 days you need to drop the price. The market is heating up but in your market it may be slightly different. a year ago it may have taken me 2-3 months or longer to sell but it wasn’t just because of price. It was the market and you just had to be patient and smart. Of course we could of lowered a lot but the math worked better to carry a little longer to get the price.
      That is not the case now. Hope that helps. Feel free to follow up with any more questions.

  8. Marvin Von Renchler on

    A story to share—especially good for newbie agents to read. I started in real estate in 1980. Got my license and was so proud! I quickly became top producer in my office and was listing and selling. A seller called me and had to sell to leave town for a jobe move. I did a CMA and told him what I thought the values was, but he wanted $25,000 more. We fenced back and forth for several days and I finally told him that Id try but he should prepare to drop it. He was totally confidant that he would get his price. I marketed it, held it open, etc. Only some interest. He only had a month to CLOSE it from when I took it. We were taking short listings because it was a hot market in Calif and homes quickly sold. About a week frrom his deadline I told him we should drop it $30,000—we did and it sold the next day but needed time for the loan to close, of course, so he had to move without his equity profit in hand. He and his family became furious with me. He told me that I should have MADE him list at proper value. I reminded him that I called it properly up front and had told him it was too high each time we received no action on ads or opens. He left town without saying goodbye. In my entire career, its the ONLY time I ever had a mad customer. I never took an over priced listing again. Told people it wasnt worth the time for either of us.

    • That is great advice Marvin. too many take listings even when they know the price is too high. My wife is a realtor and she looses listings because others price what the homeowner wants instead of actually pricing it right. She learned the hard way also. I think when your new you so hungry for business it is easy to take the listing and lower it later.
      Thanks for sharing that experience and hopefully other real estate agents agree. I think they will.

  9. Great article, Michael. I often think that using a broker to give you your ARV is sometimes not the smartest move. Learning how to value your own property, and how to learn the ebs and flows of the area, could be one of your smartest moves as a flipper. It is always good to validate your ARV with a broker who is active in your area, but doing the value yourself and actually learning how to be an underwriter may be the key to creating a sustainable flipping business.

    • Great points Josh and I agree you need to evaluate yourself as well because if you don’t understand you don’t want to be on the wrong side of a overvalued CMA if you based your purchase price on those figures. I rely on agents in area’s I am not familiar with because they are going to know those neighborhoods better than I but you must in all cases make sure the #’s work. TRUST but VERIFY

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