How to Sell Real Estate Quickly in Any Market: Your 5 Step Plan
© 2016 by M. Mitch Freeland
Whether you are an investor, real estate agent, or homeowner, selling your property quickly is essential in almost all cases. There is a reason for selling and the seller must consciously understand this reason and to act expeditiously with good judgment to make it come about. More money is lost my property owners and sales agents not understanding the basic rules of selling—that is, following the rule governed by product “value.” What does the customer “value” from the product you are selling, your property? Show them the value and they’ll buy, and they will pay your price or close to it. It is as simple as that; yet, many sellers do just the opposite. They try to convince themselves the value of their property instead of trying to convince the buyer. This is one reason properties sit on the market for long stretches. Another reason is that real estate professionals listen too much to their customer when it has to do with listing price. Sometimes agents take the listing even when they know the listing price is too high. Agents do not do the necessary research revealing the properties true value to the greater majority of buyers. And sellers do not do the required market research, personal property inspection, or prepare the property for sale, before listing it.
A lot has been said and written about selling property quickly and getting the most out of it, and a lot of articles in numerous magazines address this subject in generic form. Much of the information available these days from books and articles about selling property for top price is always somewhat useful, but not entirely complete, leaving many questions among readers, and property sellers still to be answered. There are always too many variables when it comes to selling real estate. This is because every property is different—very different. In this segment, I hope to answer, that is, fill in the gaps, to the five steps every property owner or real estate agent should come to understand and then apply. There are five steps to sell property quickly and effectively.
What is your five step plan to sell your property quickly?: (1) Pricing your property correctly; (2) pre-qualifying the buyer; (3) Preparing for the sale; (4) make all repairs before listing; and (5) Creating creative sales strategy.
STEP 1: Pricing Your Property Correctly
While this may present itself to be a simple subject often introduced as to why properties do not sell, it is nonetheless one of the most important, if not the most important reason properties stay on the market for lengthy durations. Most homeowners are out of touch with property prices and values in their own neighborhood. Many investors seem to go more by the money they invested in the property, thus determining what there sales price will be, and many agents simply want the listing, so they listen to the seller and decide to go with a sellers ideas regarding price. All three ways to determine a listing price are wrong and most of us know this. Deciding to sell a property at a price that is too high is nothing more than an amateurish business decision that becomes a huge time waster and costs money to sellers, investors and agents.
The question now remains: How do you price a property correctly to sell quickly and get the highest price possible? Here is the breakdown for you—and it’s easier than you think. Rule number one is to not get stuck on a price. The market will tell you what to list it for.
1) Do not be a greed monger. Flexibility allows contracts to close.
2) Get accurate comparables from the past two months. A CMA (Comparative Market Analysis) should be prepared by your agent.
3) Comparables should be set for around the same style house or property with the same square footage. A 1,000 square foot house can not compare to a 2,000 square foot house. A 2 bedroom 1 bath cannot compare to a 3 bedroom, 1 bath.
4) Focus on sales prices not list prices.
5) Focus on properties within one to two miles of your area only.
6) List your price 2% to 10% below all competing properties in your area
7) Make a list of all competing houses in your area and have the list available to prospective buyers (this list will show all the advantages of your property, including the price advantage—make it hard for the buyer to say “no” to your property).
8) Compare your property to others and then adjust your price up or down depending on the extras, the amenities your property offers.
9) Get an appraisal, and then set the price 2% to 10% lower. Show this appraisal to all buyers.
10) When you decide to lower the price, do not lower in small amounts. Shock for interest—lower it 8% to 10% or more. Show the world you are motivated to sell.
STEP 2: Pre-Qualifying the Buyer
Do not waste time my signing a contract with a buyer who does not qualify to buy your property. Does the buyer have a pre-approval letter from a lender? In tough times and with new investors, it may be difficult for a buyer to obtain such a letter, or sometimes new homebuyers who do not have a buyers agent and has occurred to them. If this is the case, get a copy of bank statement and other financial records to verify they have enough funds for a suitable down payment. You will sometimes work with buyers who do not have agents. You may have to work with them and even locate lenders for them. But don’t sign a contract until they are qualified.
A few points to remember:
1) A buyer who is not qualified is not a legitimate buyer until qualified.
2) Refer lenders to buyers who do not have pre-approval letters.
3) Get at 3% to 5% earnest money deposit from the buyer (a $10,000 deposit for a $200,000 house shows that the buyers are serious).
4) Set a ten day inspection period and state in the contract the deposit is not refundable after the 10 day period under any circumstances.
5) Talk to the lender to ensure the funds will be available on or before the closing date.
STEP 3: Preparing for the Sale
To sell quickly you’ll have to prepare your property for sale. This could take as little as a few days or several weeks depending on the size and contents of your property. Rule number one is clean it up and clean it out. Here’s the breakdown:
1) Clutter is a big turnoff. De-clutter your property inside and out. A house must feel rooming inside and expansive outside. Large furniture should be removed to open up living areas. Get a storage unit and move everything out.
2) Clean everything twice. And I mean everything. The interior should be spotless: walls, baseboards, counter-tops, mirrors, carpets, windows, doors, floors, sinks, knobs and inside and outside cabinets, ceiling fans, everything—got it. The property has to be ready to be moved into and the buyers need to see that it is ready.
3) The garage should be orderly. The garage should be emptied if possible and cleaned. Garage floor paint should be applied. You can also give it a clear coat and have it shine. This is easy to do and the benefits are huge. The garage now looks like a custom job.
4) The yards, front and back should be in green condition. Plants should be cutback, trimmed from the house. Plants need to look healthy. If they are dead, dieing or ugly—get rid of them. Everything living or not should appear that it has been cared for. Make it your goal to exhibit “Pride of Ownership.” This is what buyers want; it’s what turns them on.
5) Everything must be in good, if not great condition.
6) When the time is right, and you’ve done all the clean-up, interview three real estate agents who specialize in your area. Ask each of them what they will do to sell the property quickly. Then hire the one who is going to hustle for you.
STEP 4: Making all Repairs Before Listing
The overall condition of your property will in most cases determine your selling price and the speed to which it will sell. Many times the reason why properties do not sell quickly is because there are repairs to be made and the seller simply does not want to deal with them. No one, unless it is an investor will purchase property with needed repairs. And when a professional investor buys it he will typically buy at wholesale prices. So unless you are willing to sell at wholesale (25% to 50% discount) you better make the necessary repairs.
What are the necessary repairs, big and small?”
Don’t hold your breath hoping the buyer will overlook something that does not work right. Most items are brought to the buyer’s attention by a qualified inspector. And when repairs are needed—the buyers offer price will always drop. So, make all the repairs before you list the property.
STEP 5: Creating Creative Sales Strategy
The location of your property is a strong factor determining price and time on the market. There isn’t much you can do here for improvement, but if you are in a very desirable location, make it known to buyers and make it known early. Is it near the ocean, lakes, parks, excellent schools, shopping, etc.? Is it in a transitional area with expanding city services and federal funding for major improvements? Make this information available to buyers immediately. Contracts are not submitted because buyers do not know enough about the property; that is, they do not know all the good things you know—so let them know.
Creative selling means being open to many ideas; here are a few things you could try.
1) First things first, get feedback from people who saw your property and were not interested. Find out why they weren’t interested in submitting an offer.
2) Let all your neighbors know you will be selling, and even before you list with an agent put together a flyer and distribute it to several blocks in your neighborhood. Over 40% of sales come from people living in your neighborhood.
3) Think of inexpensive ways to market your property with cards or flyers: church affiliations, public boards at supermarkets and large companies near you.
4) List your property on Craigslist.org and other message boards.
5) Make special offers in the sale: a free car, boat, motor home, trips, etc.
The idea is to sell your property quickly. This is your aim, your number one priority. To do this, you will need to hustle. And in a deflating market, you’ll have to take charge and move with lightening speed. Realize that real estate markets change quickly. Once robust markets are busted markets, and once busted markets are now robust. This is the nature or cycle of business—the ups and downs of any commodity, supply and demand economics plain and simple.
Follow this five step plan as noted and you’ll sell your properties when you need to. Focus on the activity, the process, and the results will come. The stronger your focus the faster the results.
M. Mitch Freeland, with his brother John, have flipped over 100 properties and have managed over 100 units and engaged landlords. To learn more about house flipping, real estate investing or proactive, successful landlording, get a copy of High Engagement Landlording, The Millionaire Real Estate Flippers and 5 Day Flip: How to Get Offers Accepted Fast on Fixer-Uppers. Now available on Amazon.