Hints and Tips on Selling a Fixer Upper

Asked by vFlyer, 94103 Mon Aug 20, 2007

Has anyone had to sell a fixer upper? Any good marketing/sales/other hints and tips on off loading it? Doing a post on the subject and looking for good feedback, insight, advice, i.e.
Thanks.
Oliver
vFlyer.com

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6
Jim Walker, Agent, Carmichael, CA
Mon Aug 20, 2007
Due to Late nght seminars and shows like "Flip this House" there were and are a glut of amateur fix and flippers working in most communities. The high demand for fixer uppers has narrowed the profit margins on listed homes to the bare bone. My advice is that if has not already been fixed up, just pretty much leave it. Go ahead and do some of the least expensive things that dramatically enhance the appeal of the fixer. Haul out the trash, the broken appliances, The pet stained carpet etc.. Board windows if required to by your city but try to allow some light in somehow. Make it accessible to contractors who want to view it to make their estimates.
Contractors may want to buy one in order to generate work between consumer jobs, to keep their crews busy. There are both pro flippers and amateurs. Pros realize they will have to work on a slim margins. of 5 to 10% profit, but they can estimate the repair costs tightly. Amateurs have to delude themselves into thinking they are going to make 20% or better profit. If their estimates are accurate they won't buy at your best price, If ttheir estimates for repairs are optimistically low you might sell to an amateur.
4 votes
Paul Slaybau…, Agent, Scottsdale, AZ
Mon Aug 20, 2007
On a fixer upper, it's all about perceived value. Whether the home is priced appropriately for the work required is important (crucial), but creating the perception of untapped potential value is even more critical. I think fixer uppers are the easiest types of property to sell because there is always a buyer for cheap. No special marketing gimmicks necessary. Just saturate your marketing campaign with the price. And you absolutely do not shy away from the work that will be required to fix it up. Buyers are skeptical of anything with a disproportionately low price. They will want to know what's hidden. Broadcast to the world that this home needs help, but look at that price!
4 votes
Deborah Madey, Agent, Brick, NJ
Mon Aug 20, 2007
Close to the shore (Ocean) fixers don't get fixed; they get torn down. Close to the water, the value is all about the land. I hear people tell me that builders are not currently buying land, but I think they are just being more selective and price conscious. Lot value near the coast is mostly a builder market. A recent sale in this market was a tear down sold to a builder as end user. Along the coast, we will cross list a property as both land and single family home. Direct mail to builders, include downloadable docs on a single property site....plat mat, survey, contacts for the local building dept, etc.

Move inland a few miles, and the perception of fixing starts becoming a thought in lieu of tear down. Once a property is assessed as a fixer vs. tear down, target marketing may include emails to known investors or flippers, and adeqaute emphasis on this in the online lisitngs for the property. Contact info for the building, planning and zoning depts. Even with a fixer, we might recommend painting a neutral color, but minimizing all other costs. We hold fast on our same seller recommendations about de-cluttering, remove junk in the yard, tidy up the outside, add some flower pots, etc. Staging might include home and garden books. Property brochures include floor plans, tax/plat maps, etc.

When discussing pricing with a seller we look at the higher priced homes in that neighborhood for that style, work a rough estimtate of needed repairs, add 10-15% to that, and see what a sales price might be. The seller thinks we are nuts, and wants to price much higher. But, then isn't that quite common for non-fixers as well?
1 vote
Hi, , Virginia
Wed Mar 19, 2008
keep the house. not a good time to be a flipper
word on the street
flippers are toast

anyways

good luck
0 votes
Ruthless, , 60558
Mon Aug 20, 2007
A homeowner will pay more for a fixer upper than an investor but they might not be able to afford it. If you can offer seller financing or contribute to closing costs, a homeowner can build sweat equity. If there are BIG ticket items to be fixed, get estimates and add that to the asking price with a credit for its repair or replacement. A bank will loan the buyer the improved cost of the item (i.e. tear off roof) even if they will no longer loan the fix up costs. The money doesn't go to the owner, it goes into escrow and the contractor is paid. You need a good attorney to write the contract correctly.

Some people actually search "fixer upper" and won't even notice TLC ads. But don't put "as-is" unless it really is a can of worms and you price it for unknowns (lot price basically) such as mold or foundation problems that could result in having to tear down the home. If you suspect that the furnace will give out between the time of the first showing and the close date, than say ,"furnace as-is", not the entire home.

And PLEASE don't say "no survey" or "buyer to obtain survey". It's just a couple hundred bucks and something the seller normally pays for. But for some reason all As-Is and REOs in the Chicagoland area always say that. The homeowner fears that there is a problem with easements and clean title. If anyone can tell me why they do this, I would appreciate it. My only guess is that they might find something out that they must then disclose. But the buyer needs it to get a loan, so it would be discovered anyway. I don't get it. Sorry, I digress. I'll post it as a separate question.

I hope this help. I agree with the previous posts as well.
Ruth
Web Reference:  http://www.oak-park-il.com
0 votes
Keith Sorem, Agent, Glendale, CA
Mon Aug 20, 2007
Oliver,
Selling a fixer still requires the basics of marketing. Price it right, market it to Realtors who have investor clients, and disclose everything. Depending upon the circumstances, you have two fundamental tools to use:
First, how much time do you have? Second, how much do you want to net after the sale? I am assuming that this is listed with a Realtor and is being marketed fully. Given that this is a true fixer, your target market are Realtors and investors. Both of these types know value. So to get it sold for top dollar in the least amount of time, you might want to look at under-pricing it to get some bidding.

Our broker did this last month. He priced a fixer 10% UNDER market, ended up selling AT MARKET price, with multiple offer, and no contingencies...
0 votes
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