I found out I can run the 400-meter hurdles a lot faster when there are no hurdles in my way. I know…genius.
When selling a home, there are lots of hurdles between signing a contract and closing successfully. Learning how to clear them safely will make you a better seller. Avoiding hurdles altogether will make you a smarter seller. Allow me to explain.
A few weeks ago, one of our regular sellers approached us 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 us to look at one of his listings, we were 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 we probed the reasons and reviewed his listing, it all clicked. He was trying to jump over hurdles instead of avoiding them.
The property is a single-family flip. The seller bought it in foreclosure and replaced all the main items, or “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. Our first thought was that he was 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 and used modeling AVMs to project the income potential.
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.
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.
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.
The process of selling a home can be really simple if you arm yourself with information and try to anticipate where you might have trouble. Be ready when the time comes.
Having both the seller and buyer expectations set correctly, a love match was bound to happen. The good news is we found the right buyer for this property. Once we negotiated the deal and all the disclosures were out in the open, we sailed smoothly to the closing table.
There is nothing mystical about successfully selling a property. Prepare it right, market it well, negotiate fairly, and troubleshoot when necessary. Sometimes we make things harder than they have to be.
So, before you actually stick that sign in the yard, make sure you and your property are 100% ready. Pick up our Ultimate Seller Bundle. It’s a free comprehensive packet that covers everything from prep to closing and everything in between. With over 50 pages of forms, checklists, and templates, you won’t miss a thing. Pick up your free set here.
Hit me up HERE with your thoughts and comments. I read and respond to every email…eventually.
Ohio Property Group, LLC
Author: “You Can Sell It”
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