Many investors think marketing a property before it is totally complete will give them a jumpstart on finding a buyer and that it will help them sell the property faster. While in theory this may seem to be an advantage, it will more than likely hurt rather than help.
I consider marketing a property early as any of the following: listing the property on the MLS, putting a for sale sign in the yard, letting potential buyers in the house, or posting ads online (through real estate sites, social media, Craigslist, etc.) all before it is 100% complete. When you do any of these things, you potentially lose some of the desirability, along with any market momentum that comes from a house that has been structurally and of course cosmetically completed. As my friend and realtor Mike Perry says, “When your house goes live on the MLS, it’s the Belle of the Ball. It will get the most attention the first week more so than any other time. You want to capture as many ready buyers as you can during this timeframe”.
Think about this for a minute. If you are a real buyer, what are the chances that you are going to want to make an offer on a house that isn’t finished? Minus a new build where the builder is offering buyer incentives, along with selections on the flooring, paint color and maybe the fixtures, in most cases you are going to want a finished product ready for move in. In fact, you cannot close until everything is completed anyway as the appraiser will inform the lender as to the status of the property.
As a seller, one thing you may experience, whether there is a for sale sign in the yard or not, is the buyer who will stop by the house when there are contractors there, claim that they love it and would like to buy it. They also want to know if they can make some changes, even though they more than likely have a lack of imagination and really don’t know what they want. I have seen some of my clients actually work with these so-called “buyers” without a contract in place! About 90% of the time, these buyers don’t close, but love the fact that they can have a say in the finish out and be put in a position to control the seller.
Most of these buyers are not even approved for financing (especially someone who is not represented by a good realtor who would verify this before even showing a house). They are tire kickers who like to look at houses they cannot afford, but think they can get a “deal” by negotiating a seller down in price, since they are working with them directly. This turns into a big waste of time and money. I am not implying that the buyer is doing this intentionally. Some just don’t realize what it takes to get approved for a loan and for whatever reason, think they are, or that it will be easy. Also, just because someone says they like your house, doesn’t necessarily mean they want to buy it. Many times they are just being polite.
I have sold many properties over the years and just like you, I am always ready to sell ASAP. To get the fastest and best results possible, you want to list when everything is completed. This includes the landscaping and curb appeal. If you are working with a good realtor (which you should be doing) they are going to make sure it gets listed at the right time so you can have successful showings that result in qualified offers.
Mike Hanna is a real estate investor, mentor, author, and public speaker. He has been an active real estate investor since 2002 in both single family and multi-family properties, and has been in the hard money business since 2005.