17.9.15

Sell it for More! Lessons Learned from (Sort-of) Flipping a House (Part 1: The Plan)

by Robin


Despite our inexperience, when we were tasked with selling my mom's old townhouse we weren't nervous - we were excited! I felt like that clumsy kid who finally got picked for the team they've been dying to be a part of.  (Also, I am that clumsy kid so I do know precisely how it feels.)


I'm a bit obsessive and neurotic when it comes to houses.  I love them.  Ed's with me in this department.  We were ready to finally dive into our first house "flip".


We had a lot of work to do to get my mom's house ready to sell.  We had ideas and lessons to learn.  We worked our butts off - and it paid off.  After the first open house we got an offer - and two days later it was sold!

Our realtor estimated that the work we did accounted for a $20,000 profit on the sale.


Wonder how we did it?  


Here's the first five lessons we learned when we "flipped" my mom's house - and netted a tidy profit!




Lesson 1:  Get an expert opinion

To get advice, and to make it more fun, we called in our realtor to look at the place before we started.  She walked through and gave us good advice on changes we should make to help it sell.


She gave us some great tips:
- If curtains and blinds are not in good shape - remove them.  Dated or damaged curtains distract the buyer.  Bare windows let in more light.

- Odours matter.  If the house smells funky buyers will walk.

- Fresh paint helps.  A good neutral colour - and new paint will help any place look, and smell, fresh.

- Everything should be very clean.  It's nice to have furniture in the home, but not if it's old or dirty. 

- Make repairs.  (There was a long list - and we'll get into it.)

- Kitchens and bathrooms sell.  In their current state, neither was doing us any favours. 


Nothing she told us was staggeringly new.  That was the same old stuff we'd gleaned from decades of HGTV watching.  What she did do for us, that we couldn't do ourselves, was look back at what similar townhomes in my mom's complex sold for.  She compared our unit to those and gave us an estimate of what she thought my mom's unit, it it's original condition, would sell for.  Which in its current state, was not much.


A challenge!


Lesson 2: Write your ad in advance to help guide your priorities

Our realtor gave us a long list of repairs and ideas.  As working parents, we knew we weren't going to have time to get to them all.  And we did not have the budget to make any major renovations.  We developed some key words to guide our decisions. 


Here's where my years of seemingly useless online realty browsing proved some worth.  It seemed to me that good pictures brought buyers in the door - and good descriptions helped too.  A few phrases seemed particularly helpful.


We chose two of those cliche realty phrases as guiding words for our work.


For the main floor and top floor: "Move-in ready!"
For the basement: "Lots of potential!"


This gave us permission to focus on the top two floors, where most people do most of their living, and pretty much ignore the basement.  We did not have the energy to do much beyond cleaning the basement.  That was going to have to be OK.


Lesson 3:  Understand your place in the market




Knowing what other similar units sold for was a big help.   Also, searching the realty listings for similar homes in a similar price range was duly helpful.  We could see what buyers in this range were also seeing.

We did some comparisons to help guide our changes: 


What was better about our townhome?
- It's in a good neighbourhood, near schools, college campus, and far from anything too sketchy.
- It's got a fenced yard, the other townhomes didn't.  Dog owners will be drawn to our place.


What was worse about our townhome?
- The finishes are tired.  They weren't fresh when my mom moved in, and time did not do them any favours.
- There are quite a few obvious repairs needed.
- The kitchen is passable.  The bathroom - not even close.

Quite a few townhomes were available, but most were aged looking or in neighbourhoods that were less desirable. 


This research also gave us a baseline for what was expected in this price range.  There weren't other homes with marble floors or granite counter tops.  Making high end changes would probably not pay off: inexpensive vinyl floor and laminate counters fit right into this market.  Thank goodness!



Lesson 4: Picture your buyer

We created a couple of buyer profiles to help us make decisions.


Our potential buyers were not into DIY - repairs and renovations are not their goals - a low maintenance lifestyle is.  This buyer would appreciate repairs and fresh paint done.


The townhouse has two bedrooms, we were not selling this to a big family - we pictured a first time buyer (we called them Kristie and Dan and their dog Blue), a newly divorced person (Darlene and her kids) or a couple downsizing (Gail and Stu).


Was this helpful?  Maybe.  Was it fun?  Definitely.  When the "painting madness" set in we gossiped about our imaginary buyers' back stories like we'd been creeping them on Facebook.



Lesson 5: Make repairs that matter

You are not on a reno show (as much fun as it is to pretend). Don't kill yourself on everything. Prioritize starting with repairs that a home inspector might call attention to and then attend to the more cosmetic. 


For us, this meant fixing the popcorn ceiling where it was pulling away at the borders and corners of some areas upstairs, creating the impression of water damage (though there wasn't - just a house that settled.) 


After that, we focused on kitchen counter caulking, drywall patching and other, less crucial issues. Yeah - we also didn't do a bunch of stuff that wasn't going to be a deal breaker.  All that stuff was enough for us - we still had our regular lives going on in the background of all this work!


I'll be back soon with Part 2!


In the meantime - what lessons did you learn from selling your last house? 

2 comments:

  1. Investing in a real estate is a very smart way to invest your finance in property. south africa real estate

    ReplyDelete
  2. Before selling a real estate it's important to repair the house. It can create a great effect for the buyers. It increase the chances of sell.

    ReplyDelete

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