The sale of your first fix and flip property will likely be one of the biggest financial transactions of your career so far. With so much at stake during the sale process, the pressure to sell your property successfully can be immense and it can be difficult to know which steps to take. In order to get the ideal asking price and make the highest profit, it’s important to understand the timelines of properties-for-sale on the local market.
Here is what you can expect from…
The sale of your first fix and flip property
Finding A Real Estate Agent
Once the property has been renovated and is ready to go on the market, you’ll need to decide how you want to sell it. The typical choices are to use a real estate agent, selling it yourself or teaming up with a quick-sell provider. When working with a real estate agent, finding someone that you trust and that has good reviews selling property in the area is essential. Your property might be on the market for a while, so make sure you consider an agent with whom you’d be comfortable having a long-term business relationship.
The real estate agent you select should have recent sales experience and a demonstrable record of successful sales in your area.
Setting The Sale Price Using Technology
Nowadays, technology is a valuable and easily accessible way to research sale prices for your property and compare to other, similar homes in the neighborhood. Online services like Zillow’s Zestimate, or Redfin Estimate can help you find the best-suited pricing for the size and location of your home. Other options include websites like Eppraisal which checks recently sold homes and local mortgage rates in a specified neighborhood to estimate prices.
As a rule of thumb, it’s better to price the property higher than the minimum amount you are willing to accept to give a buffer for offers which are lower than your threshold. If you overprice the property, the home’s appeal could wane with buyers after a few showings. It’s also natural for the initial interest to decrease after nearly a month on the market, so avoiding overpricing is key.
Preparing The Property
Once the property is listed on the market, property staging and viewings with potential buyers will start to take place. For this step to be successful, the property should be presented well with fresh paint, be clean with no loose ends left to fix and staged with appealing furniture to raise the curb appeal of the home. Paint choices should be kept to colors which are neutral and reflect light into the rooms to present the rooms as well as possible.
Prep should also take place outside the home with landscaping and gardening. Shrubs should be trimmed, flower beds weeded and fallen leaves raked on a regular basis while the house is for sale.
Getting An Offer
Getting an offer is a waiting game and takes some patience and a measure of good timing. Even if the property has good initial interest, offers can be retracted or fall through due to a variety of reasons, and should not be considered final. When a buyer is interested in your property, you will receive an offer to purchase. This is the stage where the buyer is evaluated and the terms are negotiated until both parties are in full agreement.
When all the terms have been settled, a contract will be drawn up between the seller and buyer known as a Purchase and Sale agreement. This is typically done by the buyer’s attorney.
The Closing Process
When you’ve received a serious offer, your attorney and/or title agent will put the closing process in motion. The process goes something like this: the offer is made and accepted, a Purchase and Sale contract signed and a deposit paid by the buyer. Then, a closing date is set. The buyer will get an appraisal of the property and typically apply for a mortgage.
Following that, the buyer will arrange a home inspection, and if all the steps work out the rest of the closing will be handled by the buyer’s attorney. The question of title insurance may also come up and be arranged by the attorney (or, in some states, the title agent) as well. Closing will be finalized when all the paperwork has been signed and submitted and the deed or title change is recorded with the town.
Selling your first fix and flip may be challenging at first, but with time will become second nature.
It’s key for you to be aware of the local real estate laws and trends, and to understand the timeline of a property sale. If the property is priced correctly and handled by a skilled real estate agent, your chances of a successful sale become much higher. Once all these steps have been completed, the property will transfer hands and leave you free to pursue a new project, ideally with great profits in hand to continue to grow your business!