When selling a home, there are a lot of hurdles between signing a contract and closing successfully. Learning how to clear them safely will make you a better seller. Avoiding them altogether will make you a smarter seller. Allow me to explain.
A few weeks ago, one of my regular sellers approached me after he had reached the end of his rope. This is a seller who typically hires us to put his property in the MLS and step back. We call this a Limited-Service or MLS-Only listing. In these situations, we do the marketing and simply forward all buyers and agents to the seller. The seller handles the offers and closing process.
This particular seller has been selling for decades with hundreds of transactions under his belt, so when he asked me to look at one of his listings, I was a bit surprised.
His frustration came from the fact that the property had been under contract four separate times and each time, the deal came unglued. When I probed the reasons and reviewed his listing, it all clicked. He was trying to clear hurdles instead of avoiding them.
The property is a single-family flip. The seller bought it in foreclosure and replaced all the main items. These are what I call boring expensive items like the roof, furnace, some wiring, windows, etc. He also updated the kitchen, flooring, and paint throughout. He did a lot, but the house still needed more work.
He decided he had sunk enough into the place and was ready to sell it. The first deal was FHA. The appraiser killed the deal because the exterior paint was peeling and there was not enough clearance in the crawlspace. The second deal was conventional, but the buyers got cold feet after the inspection report.
The third deal died because the appraisal came in low and the buyer backed out. The fourth deal was another inspection/cold feet issue. Noticing a pattern here?
The seller wanted to upgrade to full-service because he was sick of the property and sick of “fooling with it”, as he put it, so we engaged. My first thought was that we are attracting the wrong buyers.
We revamped his marketing to emphasize the work that was done, and instead of targeting retail first-time buyers, we went after investors. We called out the income potential and estimated cap rate. We called out the demand for rentals in that area.
At the same time, we added language and terms to repel the wrong buyers. We removed all financing options and limited them to cash or hard money. We added an “AS IS” statement.
Instead of an inspection period, we referred to the “Due diligence” process. We published the complete inspection report inside the MLS and produced a Pro-forma profit and loss estimate.
If you know FHA will be a problem, either fix the issues or don’t allow any FHA buyers. If you know inspections are going to be an issue, publish the inspection reports and tell buyers to read them before they make an offer. If you know there are no recent comps, stop fishing for buyers who need an appraisal. You get the idea.
There are a series of hurdles that are common to selling any property. Prepare for them so you can easily clear them and if you can’t clear a hurdle, work to avoid it and save yourself the bruises and scrapes.
The process of selling a home can be really simple and easy if you arm yourself with information and try to anticipate where you might have trouble so you can be ready when the time comes.
After 20 years and several thousand transactions, even slow learners like me can see there is an easier way to sell a home. Lucky for you I’ve endured all the bruises and scrapes so you don’t have to. Besides, I hear you faint at the sight of your own blood. Why take the chance?
To get my entire secret playbook on how to sell your house, check out my latest book, “You Can Sell It: How to Advertise, Negotiate, and Close Your Home in Today’s Real Estate Market”.
You can find it at YCSIBook.com, available in paperback, Kindle, and Audible/iTunes. It’s a comprehensive guide for anyone selling their home. As a bonus, you will also get over 50 pages of forms, checklists, templates, and scripts to help you crush it.
What lessons have you learned? What secret plays are you willing to share with me?
Share your thoughts and comments with me by emailing [email protected] I read and respond to every email…eventually.
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