No rehab is complete until the property is sold. Regardless of how much work you do, or how well you do it, there will be no profit if the property doesn’t catch a seller’s attention. Few things are more frustrating for an investor than seeing their property sit idly by while buyers pass it up. The first reaction by most investors is to reduce the price, but is that the right move?. A price reduction is always an option, but at what cost? Before you take money out of your pocket, there are a few other options to explore first. Here are the top five things you should be ding if your property isn’t selling:
1. Ramp up advertising: The first thing you need to do if your property isn’t selling is to reevaluate how it is being advertised. In most cases, agents are using all of the traditional methods, including open houses, the MLS and print advertising. Many real estate agents in today’s market are also taking advantage of the many social media platforms available.
The number of showings you get should be an indicator as to how well your advertising is doing. If the showings are high, the issue could be any number of other areas. If there is a low number of showings, either the price is too high or the advertising isn’t working. Even though your real estate agent handles most of the marketing, don’t be afraid to do some on your own. It only takes a few minutes to put your home on social media. You can also put up some for sale signs in your local neighborhood, or talk up the property with your contacts. Before you lower the price, take a look at the marketing.
2. Minor upgrades: While price is always important, buyers are also looking for quality. In your rush to get the property finished, you may have overlooked some minor items. These items can be more important than you realize. Start by looking at the exterior of the property. First impressions go a long way to attracting a buyer. If the exterior is a mess, a buyer’s opinion may already be made before they enter the house.
A few bags of mulch and a couple of plants can have a huge impact. (Especially if you’re selling a home in summer.) Make sure the yard is clean, the grass is cut, and there are no leaves or debris in the yard. The same is often the case with the interior of the property. Take a look at the fixtures and see where you can add an accent wall or put on a fresh coat of paint. At this point you don’t need to do a complete overhaul on your property, but look at areas you can make minor touch ups. These minor items are often the difference between finding a buyer and wondering why you can’t generate interest.
3. Consider staging: You need to spend money to make money, and staging is the perfect example. Staging is the act of adding furniture and other items in the property to give it a lived in feel. Depending on the property and location,it could quickly generate a buyer. Staging isn’t cheap, so you need to know the market you plan on staging in. That being said, staging can also help you generate demand that may help you get over the asking price. Staging is best left in the hands of professionals. Even if you feel that you know what you are doing, you run the risk of wasting time and money. At this point, you may not have too many more chances to attract a buyer. Don’t waste an opportunity on not staging properly.
4. Get a second opinion: There are times when it is important to detach yourself from a property. If you have worked on a rehab for months, you may hold it in higher regard than the rest of the market. You may also think that the property is close to perfect. When you are having trouble selling, you should seek out a second opinion. Ask someone that you trust to walk the property and give you some honest feedback. There are times when you overlook something that is right in front of you. The color scheme could be off, or something just doesn’t work with the property. Instead of getting annoyed and frustrated take this advice and make the necessary changes. A fresh set of eyes can give you perspective on the property that you may not have seen.
5. Price reduction: Only after you have tried everything else should you consider a price reduction. Lowering the price alone may not do the trick. There are certain psychological barriers that buyers look to get under. If you are currently having trouble selling for $205,000; you should consider getting that number to $199,000. There is something about seeing a one in front of the number that makes a difference. Also, when you reduce your price, do so where it will have an impact. Lowering it by a few thousand dollars alone typically won’t do much to move the needle. Put yourself in the buyer’s shoes and look at what else is on the market. If you are having trouble selling, price your property slightly below other homes on the market and be flexible when offers come in.
Not being able to sell your property doesn’t mean the project is a failure. Before you panic and drastically reduce your price, there are a few options you should explore first.