Holding onto a property for a long time can cost you money, so you should make sure you know How To Sell Fast.
Many people follow the old idiom, â€œSlow and steady wins the raceâ€ in their daily lives. While taking time to methodically contemplate and realize every detail of what youâ€™re doing can be a useful technique in some cases, when flipping houses, quickness is often a more rewarding virtue than patience. If you understand How To Sell Fast, you can minimize your expenses and increase your profit when you flip a house.
However, before knowing How To Sell Fast, you should consider the important reasons why. Understanding the process will help you figure out when specifically is a good time to sell.
Time Is Money
Although no one will be living in your property while it is being renovated, there are a number of ongoing costs that you will be responsible for. Some of the most obvious expenses are things like property tax, insurance as well as water, gas and electric. However, there are some of expenditures that beginners often overlook, and the longer the house stays on the market, the more these expenditures will cost.
If you are buying a house with no money of your own, then you are most likely financing your house-flipping venture through a lender. Although the average loan amount will vary depending on your interest rate and terms you negotiated with your lender, if your loan monthly interest is $1000, the longer you hold onto the property the more you will pay your lender in interest. When we flip houses, we use a six-month time frame from purchase to sale Â - so in cases like this each month past the six months will subtract from our bottom line.
That means, if you wait longer to sell, you will be subtracting hundreds if not thousands of dollars from your profit. Or conversely, if you sell faster, you will save yourself potentially thousands of dollars.
While your property waits to be sold, the surrounding environment grows and the weather changes. The lawns must be mowed frequently, and gardens and plants must be managed. If a storm hits the area, fallen tree branches and debris would need to be removed, or, in the case of a snowstorm, the driveway would have to be plowed.
Whatever the case may be, maintenance costs money. If you donâ€™t learn How To Sell Fast, you could wind up paying for this manual labor out of your own pocket.
Most vandals know better than to deface a house that still has people living in it. Rather, their prime targets are often vacant homes that are waiting to be sold. While the average vandal usually damages the house by spray-painting and breaking windows, more clever saboteurs might steal expensive appliances or even strip the copper pipes from property.
What many beginners in the house flipping community often do not realize is that most insurance providers DO NOT cover vandalism after the first thirty days that a property is on the market. The longer you wait to sell your property, the more likely vandalism will occur that your insurance wonâ€™t cover.
Putting Ideas Into Action | How To Sell Fast
Now that you know why it is important to get the property off your hands fast, you must learn how to optimize your chances of doing so. There a few key elements are important to consider after you first make your purchase.
Make Sure Your Contractors Finish On Time
Often in real estate, a house flipper will hire a general contractor, or a few subcontractors, to renovate and improve their property. Sometimes, however, these contractors take longer than projected to complete their projects.
While unanticipated problems do occur when repairing a home, it is important to remind them of their contractual obligations to finish by their deadline. You might consider having the general contractor make a schedule and meet with all of the subcontractors to discuss the order and specific dates that they will complete their piece of the puzzle.
The longer they take to complete the project, the longer the property will remain unsold. Remind them that they work for you and not the other way around.
Cash Is Faster Than Finance
When given multiple offers from different prospective buyers of your property, the higher price isnâ€™t always the best option. For example, if the higher offer is to be paid with a mortgage loan, there are many problems with the bank that can occur before the offer is finalized. You might have to renegotiate for a lower price, or the sale could be cancelled all together. If this happens, you would have to put the house back on the market and deal with several more months of the previously mentioned expenses.
With a cash offer, even though it might be initially lower, you donâ€™t run the risk of loosing your sale. The transaction is often quicker and it reduces the likelihood of having to hold onto your property longer than expected. In doing this, it will save you a great deal of money.