Don’t Forget The Final Step Of The Rehab Process
The rehab process isn’t complete until you sell your property. You can do everything right throughout your rehab but it won’t matter if your property sits on the market. Even if you did quality work and made smart upgrades you can’t overplay your hand. Where you price your property will often dictate how quickly it sells and often times for how much. It is important to fight the urge to list your property too high. The difficulty of the process or how bad the property was when you bought it should not play a factor in your list price. To maximize your value you need to list at the right price from the start. Here are four things to remember when pricing your rehab property.
- First Price Is Important. First impressions are important in every aspect of the real estate business. This is particularly the case when it comes to listing your property. Your list price is the starting point for local buyers and real estate agents. You only get one chance to make a positive impression. By listing too high you lose a large segment of interest right off the bat. These people may have been interested at the right price but are not at your inflated number. Instead of attempting to drum up curiosity you accomplish the complete opposite effect. Not only do would be buyers turn elsewhere but real estate agents will look for other properties as well. There may be some curiosity views but nothing of substance will come from it. In a matter of just a few days your new listing could be something of an afterthought on the market.
- Ignore What You Went Through. Rehabbing a property is often filled with plenty of ups and downs. There were probably times when you wondered if you would ever be finished. Even if you faced a curveball or two along the way you need to keep it in perspective. Buyers do not care about what you went through. They don’t care about the condition of the property when you bought it. They don’t care that you went through two electricians and three painters along the way. All buyers care about is the finished product. As difficult as it may be you need to ignore what you have gone through and only look at the current market. Buyers and real estate agents will compare your property to every recent sale and current listing. You may think that your improvements and the work you did can justify a higher list price but it doesn’t. By using your market as a guide you can list at a price that generates interest. Keep emotions out of it and only look at the data that is in front of you.
- Time Is Money. Every seller wants to get the highest possible price for their property. This isn’t exactly earth shattering news. What is often as equally important is how quickly the property sells. Time really is money in the case of rehabbing a property. Your expenses and carrying costs do not stop until you relinquish ownership of the property. Not only do these continue to add up but not selling may impact your ability to pursue other deals. This doesn’t mean you need to list the property well below market value but you do need to consider the time factor involved. By listing at the fair market value you will get your home sold as quickly as possible. With many markets still favoring buyers they are not willing to make an offer and wait for a counter offer. Instead they will target properties in their purchase price range and go after them. If you want, or need, to get your property sold quickly you need to list at the right price right from the start.
- Listing Shelf Life. Real estate in many ways mirrors what society is feeling. Anything new is seen as fresh and exciting for a limited period of time. After a while the luster is lost and attention is diminished. The same is the case with all real estate listings. The first weekend of any new listing is the most important time. If you don’t capitalize on this momentum it is difficult to gain traction. The longer your property sits on the market without offers the less demand it generates. Reduced demand usually leads to your property becoming something of an afterthought. After a few weeks you will be faced with the decision to lower your price or consider lowball offers that comes in. Once a property is reduced it might as well have a neon sign that says “any offer considered” on it. The market now knows that you are having a tough time finding offers and they may be able to steal the property.
By listing at the right price you can actually end up getting more for it. Multiple buyers can create a bidding war that pushes your price higher. Instead of having just one offer to consider you may have the ability to pick the best one for you. It is important to listen to the advice of your real estate agent during this time. Not only do they know the market better than you but they are not emotionally involved in the property. The rehab process doesn’t end when the work is done it ends when your property is sold.