How To Sell a Flip on Your Own

So we bought a house, rehabbed it and are finally ready to flip it to a buyer.

Time for that important question… Sell it ourselves or with a Realtor?

We’ve previously discussed why to use a Realtor and how to pick a good one.

Now let’s look at selling the house WITHOUT a realtor.  If you are saving all that money on commissions, you better roll up your sleeves…. the real work is about to start.  While you can hire contractors to rehab, you are going to sell the house all on your own if you don’t have a real estate agent on your team.

Let everybody know you have a house to flip

Tell everybody.  Tell your friends, family, co-workers, people at church, folks you run into at the grocery store.  Other investors.  Realtors.  The tellers at your bank.  Tell everybody you have a great house at a great price.

You never know what connection might result in a sale. Use social media, email, phone calls.  Tell everybody.  When you are on your fifth house, you can slow down and quit bugging everyone.  Until then…. tell everybody.

Make a great flyer

Paper and ink are cheap.  Take the best photos you can, and design a full color single page flyer.  Give a complete description of the features of the house… but also give the benefits of the house- the emotional description, not just the facts.

“Large back yard” is a feature, while “huge backyard perfect for entertaining” is a benefit.  “New kitchen cabinets” is a feature….”brand new cook’s kitchen” is a benefit.  People buy based on emotion, not facts.  So appeal to your buyer with your wording.

Make sure your flyer uses words and phrases that sell.  Then give it to everybody.  Put a clear plastic box at the home. Mail them to friends and family.  Give them to everybody.

Online ads and Classified ads

Buy a cheap ad on Craig’s list.  See if your local paper offers online classifieds cheaper than the print version.  Check out your local “thrifty nickel” convenience store give-aways.  To really move a house, ask your local newspaper about a single color on neon paper flyer, stuck in the Sunday coupon section (sell the back side to a contractor).

Use words that sell

When talking about the house, creating the flyer, or drafting an ad, use the right words and phrases.  Beautiful, over-sized, impeccable, immaculate, mint, gorgeous, “walk in and fall in love”, “new landscaping”, “turn-key”, “move in”… etc.  These descriptions result in faster contracts at higher prices…. guaranteed.

What to avoid?  “Must sell” or “Motivated seller” are kiss-of-death phrases- they will slow you down and result in low ball offers.  Think about it… when you see these in an ad, don’t you expect a great deal?

Buy a big sign and/or banner

A standard yard sign is great, but why not spring for a 4’x4′ sign– it grabs a lot more attention, and you can put more information on the sign.

Also consider a 5’x3′ vinyl banner for a fence or the front of the house.  Especially in election season, when people start to tune out yard signs.

Price your house right

If your price is just 5% too high, you will get half as many calls.  Do your market research, and price the house right the first time.  It is tempting for new investors to initially price high so they “don’t leave money on the table”.

But time is money.  A fast nickel is better than a slow dime.  Repricing your house means new ads, new flyers, and new signs.  Get it right the first time.

Rehab your house right

If your house isn’t selling, and your price is right, then look at the quality of your rehab.  What isn’t done right?  What is scaring your potential buyers? Are they worried about the quality of that tile work… or do they think the house needs a new roof… or is the painting a little shoddy?

If your potential buyers aren’t offering, look to the quality of your work.  Only perfect houses get top dollar.

Ask for Feedback

Your best source of feedback is the people who see your house and don’t make an offer.  But you have to ask the right question.  Ask “what scared you”.  Then listen carefully.

They may hem and haw, but if you ask and then shut up, people will tell you exactly why they didn’t make an offer.  And if all it takes to get a contract is a new air handler or dishwasher… but your buyer is afraid of incurring that additional expense… seal the deal by agreeing to make that part of the contract.

ONLY work with Qualified Buyers

The single biggest mistake most new investors make is wasting time showing the house to a bunch of people who have no possible way of buying the home.

A Qualified Buyer is someone who has already sat down with a lender, given all the necessary documents (tax returns, pay stubs, etc) and had a credit report pulled.  If you are showing the home to someone who has not been through that process, you are simply wasting your time.

If you are showing the home yourself, you must screen buyers.  Ask if they are paying cash.  When they say no, ask which lender they are using.  If they can’t tell you, have them meet with YOUR loan officer or mortgage broker to get qualified…. BEFORE you agree to even show them the house.  Yes, you will piss people off.  You will hear “well I’m not even sure I want your house”.  You will have people tell you it’s none of your business.  But you will avoid wasting countless hours showing the house to people who can’t buy it.

What other tips do YOU have for people selling their own Flips?  Please leave a comment and share this post!


7 Keys to the Perfect Real Estate Agent

Well, you bought a house and fixed it.  Time to flip.

So….are you going to list with an agent or sell it yourself?

There are lots of advantages to using a local Realtor:

  • Access to MLS
  • Someone to screen buyer calls
  • Someone to show the house
  • Someone to handle offers, contracts and closing
  • Someone with knowledge of fair housing laws
  • Someone to give you unbiased advice and support

The biggest disadvantage is you have to pay a commission– and that is a REAL disadvantage.  Remember you pay the commission based on the selling price… not your profit.  If you bought a house for $70k, put $15k into rehab and plan on selling for $100k, after closing costs you and your realtors might make about the same amount… even though you were the one taking all that risk.

So how can we make sure we are picking the best Realtor?

1. Look for top “selling” agents, not listing agents

Listing agents list.  Selling agents sell.  When you hire an agent with a bunch of listings, you are hiring someone who does a good job working with sellers.  But a good selling agent has a list of qualified buyers… and helps those buyers put houses under contract.  If all your agent does is list the house on MLS, you have not received the most bang for your buck.

2. Buyers agents know a good deal when they see it

A selling agent (also called a Buyers Agent) is the one dragging buyers around to all the properties in the area.  When they see your top-of-the-line flip, with a well done rehab, they know it.  They know to show your house to their qualified buyers first… and they help convince those buyers to put in a top-dollar offer.

3. Buyers agents have good prequalified buyers

An experienced selling agent knows not to waste time with unqualified buyers.  So the good ones will have their buyers get loan approval (and all the required loan documentation) before they start showing houses.  By working with an experienced buyer’s agent, you eliminate most of the offers from people who will never be able to get through the loan process.

4. Give the top selling agents a 3-day preview

Even if you’ve listed with a specific realtor, compile a list of the Top 10 selling agents in the neighborhood where your flip house is located.  Give them a call as you are finishing your rehab, and let them know the house is about to go on the market.  Let them see the house before it hits the market, and make sure they know you are giving them a preview because they are a top producer.  This gets the agents most likely to sell your house a head start on identifying the perfect buyer… which gives you a head start on a contract.

5. Offer top selling agents a 4-5% commission

If your listing agent says something like “we take a 6% commission and split it evenly with the selling agent”, offer a better incentive.  Offer an extra 1-2% to the selling side if they bring a contract that closes within 30 days of the initial listing.  This gives agents an incentive to move quickly on your house, and the extra commission is well worth the quick contract.

6. Avoid part time or inexperienced agents

Everybody has to start somewhere.  But not on your house.  And while there are some great part time agents, you have to wonder about anybody not committed 100% to their day job, right?  The top selling agents are not new to the game and they are not part time.  I would not consider listing with someone who hasn’t brought at least 25 buyers to the table in the past year, nor would I look to someone with less than 5 years in the real estate game.

7. So how do I find the top selling agents?

First, run an MLS search for the neighborhood where you are trying to sell a home.  Look at the selling agent on all the close by homes in the past year.  Likely, you will see the 80/20 rule applies… 80% of the sales in a particular area will come from 20% of the agents.  Those are your agents for that area.

If you don’t have MLS access (a bit of a chicken and egg problem), ask loan officers, title companies, listing agents or investors at your local REIA who sells the most houses in your particular area.  They will know.

So what Keys do you follow in picking the perfect real estate agent to sell your flip homes?  Please let us know in the COMMENTS below!  Thanks!

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Seven steps to pricing your foreclosure flip

From the Noobie mailbag:

“How do I determine the sales price of my foreclosure flip”?

Obviously, pricing a property right is the most important element of a successful flip.  Price it too high and nobody notices.  Too low and you left cash on the table.  So how do you price your flip?

House Price teeter totter

1.  Estimate price BEFORE you buy

Your max foreclosure bid should be the price you can sell the home for after it is fixed up, less the cost of repairs and closing, less the profit you hope to make.

So you should never buy a rehab property without having a very good idea about your after-repaired sales price. Price BEFORE you buy, not after.

2.  Start with comparable recent sales

Appraisers use comparable sales of similar properties to determine fair market value.  In a perfect world, the appraiser uses close-by comps the same size, age and style, that sold in the past three months.  Good luck with that.

So how do you find comps?  If you have access to a local Realtor board’s MLS, that is obviously your best source of info.  If not, you will need a Realtor or appraiser to pull  comps for you, or find another source.  Even if you have MLS access, you  want a second source of info, because your MLS only covers Realtor-listed sales, and plenty of houses sell without a Realtor.

Other sources of information:

  • RealtyTrac
  • Redfin
  • Zillow
  • Trulia
  • Property Appraiser
  • Tax Collector
  • Official Transfer Records

3.  Then consider ACTIVE sales

Appraisers are going to look at comparable recent sales, so if you have a financed buyer, your house better appraise based on the comps.

But comps are not your competition.

You sell against the other houses on the ACTIVE market, not the closed market.  So before you price your home, you better know what other homes your potential buyer will be looking at along with your home.

4.  Learn neighborhood differences

We buy homes in several large developments with over a thousand homes each.  Within these developments, there are areas where identical homes have a price difference of about 10%-15%… within two blocks of each other.

It’s a small enough difference that you would never see the trend until you are actively working that neighborhood.  But it is a difference you can’t afford to ignore.  And only experience is going to teach you to recognize the subtle differences.

5.  Cheaper, Better… or Both

Once you have a clear idea of past sales and active competing properties, it’s pretty simple to price your house competitively.

We usually try to price flips about 5% below similar active houses.  If everybody else is at $80k, we price at $76k.  That makes our property noticeably cheaper and grabs attention.  And no… we are not leaving money on the table.  The cheaper price results in multiple offers, and we end up with the maximum possible price.

The other way to go, is to make your house the nicest house on the block, with options the other houses don’t have.  An extra bedroom.  A pool.  Larger garage.  If the home has these extras, then we usually price 5% higher than the typical competitor.

But for a quick sale, nothing beats a house with extras AND a price 5% lower than the other available homes.

6.  DON’T price emotionally

Want to screw up royally?  Price your house based on:

  • “what I want to make”
  • “what I think it’s worth”
  • “what I have in it”


Yet I’ve seen investors make pricing decisions based on these irrelevant emotional factors too many times to count.  And a few months later, they are still sitting on a house that should have sold in a couple weeks.

If you overpaid for the house and ran over-budget on repairs… those are sunk costs.  Your buyer isn’t responsible for your screw up.  Sell the house, acknowledge the mistake, and try not to do it again.  But price your house to sell, not to recover from your mistake.

7.  Tweak the price as needed

If we’ve priced a house correctly, we have offers within a week.

If we don’t have at least one offer in seven days, we tweak the price.  We might only drop it by $100, but this keeps it on the MLS “Hot Sheet”… the list of recently added or changed listings.  So a new group of real estate agents add our house to their showing list for the next weekend.

The market will quickly tell you if you’ve priced correctly.  If we are not getting offers, we are priced too high.

The exception to this rule of thumb?  One-offs.  When you are flipping a large home, a farm, vacant land or a commercial property, you may just need to be patient.  The price may be perfect, but you need to wait for the right buyer to come along.

But with a typical single family home, price is what moves the house.  If the house isn’t moving, change the price.