I hope you’ve had a great week and are heading into a fun weekend! I also hope that you’re really kicking butt in your real estate investing goals because we’re already eight and a half months into this year, and if you’re not well on your way to reaching your goals, you have to push down the gas pedal. I’m talking about massive action; don’t get discouraged, don’t let the challenges slow you down–get out there, take massive action, fall on your face, get back up, take more action.
In this episode, I want to talk about a popular debate in the real estate investing world. When do you list a house? There are three ways to look at this: a few people list the house the moment they close on it, others list it during the rehab, and others wait until everything is completely done. The last two are the most popular courses of action.
Some people will argue that you want to get the house on the market before you’re done renovating it, so that you can start generating a buzz and maybe even sell the house before you finish the rehab. For example, let’s say you’re doing a rehab that is expected to take eight weeks. In week five or six, you can put the house up on the MLS and start letting people see it. It will still look a little rough and not everything will be complete. Should you list it anyway so that you can go into closing the day you’re done with the rehab? If that outcome were guaranteed, you would be a fool not to list the house early.
But, sometimes you put the house up for sale before you’re done with the rehab and nobody puts in an offer. Buyers have a hard time seeing past the clutter, so people who may have otherwise loved the house will be turned off by the mess and leave. By the time the rehab is done, those people might not come back. Buyers can’t necessarily walk into something rough and see what it’s going to look like when it’s done. So now, the listing has been on the market for a few weeks and the listing has become stale. Buyers see that the house hasn’t been bought in weeks, and start to wonder what’s wrong with it.
I personally don’t put a house on the market until it’s completely done. I have been urged by realtors to put it on the market before I was done, and I didn’t see the benefit of doing that. I like to hit the market with a bang so that the first person who sees it sees a brand-new, pristine house.
I recently interviewed Scott and Jessica Holwick, who found a buyer for their house before they finished their rehab. That’s great, but it doesn’t always happen, and when you list a house early you run the risk of having a stale listing.
Finally, you could list a house on the market a couple of weeks before it’s done, but say that there will be no showings until the date when it will be finished. That way you can get the best of both worlds. I have not tried this method myself, but it’s definitely an idea to consider.
How do you do it and why? Let me know in the comments.