Even before I bought my first property in 1975, I was very aware of the fact that I had to find a buyer to sell it to so I could make a profit. What I saw as a great deal didn’t seem to be so interesting to picky end-buyers.
At the time I didn’t realize the power of marketing as the only way I was selling properties was with an advertisement in the local newspaper and a sign in the front yard. There was no Multiple Listing Service (MLS®) at the time and when I did see it the listings were printed in a newspaper format and only once a week. Things have really changed with the internet and the instant access to various websites that advertise properties for sale.
Looking back I wasn’t as fearful of selling my properties and I was annoyed that it took so long to sell them. I was used to selling on the stock and commodity markets which took minutes in those days, today it takes milliseconds. I knew the properties would sell and slowly developed methods of doing better and more thorough advertising. I eventually realized that marketing was more important than the actual condition of the property!
Having said that, if you are selling a really ugly property, it can be sold; you just have to target a different type of buyer. For example, if the property can’t be financed by a bank because it needs too many repairs, you’ll need to target an investor or a “work for equity” homeowner who will live in the property and fix it until it can be financed.
I wasn’t happy about tying up money in properties I had to sit on to get buyers. My first method of overcoming this “time” obstacle and frankly, fear of not selling, was to make the property so high profile that buyers were competing for it.
We usually took a vacation every summer and went to antique auctions in Pennsylvania. I loved seeing people in a bidding frenzy each trying desperately to win. The winner usually over-paid for what he won but it was the thrill of winning the item that made the auction work. I used this idea to develop a round-robin auction program that brought in tons of unmotivated buyers but a few buyers who wanted to live in that specific neighborhood.
Now when I advertised a property, I advertised an auction that sounded to the casual observer that the property had to be sold – a “liquidation” sale. We still use this method on retail and wholesale properties whenever we can and it gets great results in only one or two weekends – even when the market is not “hot”.
The auction process is not an absolute auction so if you get bidders offering 20% of the price you want, you do not have to accept their offers. But the second, and more important thing it does, is to build a buyers list for your future properties. The auction is not like an open house that a realtor does – this only works about 2% of the time.
The auction process works 75% of the time the first time you hold it and 90% of the time on the following times you hold it. Yes, we hold the auction over and over for the same home even when we have it under contract. We then build a bigger and bigger buyers list for either wholesale or retail buyers.
If your property is a wholesale deal, you can put out bandit signs in the neighborhood, list it on Craig’s list online and run it on free classified online websites. Be careful as some of these sites are actually traps to get your information so a realtor can get you to list your property.
If you decide to list your property consider a flat-fee listing agent who will charge you $199 to $399 to put your property in the MLS® and Realtor.com and possibly other assorted sites. You will still have to pay a buyer’s agent a commission but it should be ½ of the normal going rate in the neighborhood.
If you get a wholesale deal, you can additionally ask other wholesalers in the area to run it through their buyers list. They may want to split the deal which is common, or they may charge a flat fee to use the list. Either way, if they bring a buyer or even just prospects, you can incrementally grow your buyers list.
In summary, don’t be afraid of not selling, get prepared with the methods you’ll use before you get a deal and attack the marketing during the inspection period. If you can’t get a contract on the property before the inspection period is over, you can always cancel the contract and have no monetary risk at all.
To your limitless success,