It would be great if every house that should be sold at a discount was priced accordingly. But that’s just not how real estate works. In a seller’s market, sellers are going to try to get the most for their home. That is why, as an investor, it may take a little extra to find those homes that have the potential to be a good flip opportunity (if the price is right).
DOM (Days on the market)
This is how long the house has been for sale. The higher the number, the longer it has been for sale. Sometimes, it may be that the house had an offer accepted on it but something happened. Maybe an inspection didn’t go well or there were additional repairs the buyer asked to be addressed. It could also be that the buyer’s financial situation changed and they are no longer able to qualify for the purchase. Whatever the circumstances, this can be a sign of a seller who would be willing to negotiate.
When a listing doesn’t show well, that will translate to the photos as well. You may notice the photos are not very appealing and there may be personal belongings or disorganized space. There may even be a person in the photo, sitting on the couch…truth. If the photos are not great, you know you are likely not dealing with a traditional sale. They are a green light for an investor since those types of pictures are likely to deter retail buyers.
A listing may have only been on the market for three weeks but if there have already been multiple price reductions, it’s a good sign. It could be that the seller is motivated and started their pricing high or it could be that they have received feedback from potential buyers that is not favorable with the pricing where it currently is. Either way, a reduction in price is a great opportunity for you to determine if the house could be a great flip at the right price.
There are specific words that, when used to describe a house, can be indicators it may be a good flip. “As-is”, fixer-upper, needs work, estate, and same owners can all be indicators that the house may be in need of some repairs and updates. An agent can set up searches for these keywords in their searches so you can have them delivered to your email.
Just because a house is listed on the market does not always mean that it is a house a retail buyer wants. By staying alert to homes in your areas that show these signs of motivation you are sure to find a flip…possibly where no one else is even looking.
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the perfect house.
For more inspiration for home renovations, follow me on Pinterest @thresholdhomesmn