In a perfect world your rehab property will sell a few weeks after it is listed for full asking price. Anyone who has flipped real estate before knows this isn’t always the case. There are times when you can do everything right and still struggle getting your property sold. It is during these times when you need to make smart decisions. If you don’t take action a few weeks can easily turn into a few months. On the other hand if your actions are too drastic you may not sell at a price point you are happy with. Here are three things you need to do if your rehab property doesn’t sell.
- Review the marketing The first thing you should do if you are having trouble finding a buyer is to review the current marketing. Your real estate agent has a log of everyone that has visited the property. If there have been a good number of showings without any offers this may be an indication that the price is listed too high or there is something wrong with the property presentation. If the showings are low this is usually a sign that there is not enough interest being generated. Sit down with your real estate agent and discuss how the property is being marketed and what suggestions they have to increase volume. This can mean an increased number of open houses or a bump in newspaper or social media activity. Whatever the current plan is reduced showings usually means poor marketing. Before you take any action you need to know that your property is getting maximum exposure.
- Reduce price As much as you may not like it a price reduction can the best move you can make. Ideally you would list the property at the right price from the start. If you took a shot and tried for the high end of the market you need to realize your mistake as quickly as possible. The longer your property stays overpriced the less likely you will find a buyer. Buyers and real estate agents will look elsewhere instead of overpaying for your property. When you decide to make a price reduction it should be significant. You should think about going below certain psychological barriers that buyers have. If you were at $210,000 your new list price should be $199,900. What you will find is by listing at fair market value right from the start not only will your property sell quickly but usually for a higher price than you think.
- Consider renting If the first two options don’t produce a buyer you need to prepare for the worst. Instead of selling at a price you aren’t comfortable with you should consider renting. There are times when renting for a year and evaluating your options after the lease is the best thing you can do. Obviously this is largely dependent on the rental market and how much rent you can command. Even if you break even on the rental there are tax benefits that can make renting an appealing proposition. As long as you understand all of the costs and risks associated with renting it may make sense on a short term basis.
The last thing you should do if your property isn’t selling is panic. The more prepared you are the better choices you will make. It is always better to be proactive than reactive when you dealing with real estate issues.