So you’ve done all the heavy lifting when it comes to locating, buying, and repairing that diamond in the rough. It was a long, hard road of demolition, redesign, and rebuilding — whoever said that house flipping was easy?
But as important as all that construction work was, an equally crucial step in the process is pricing the house to sell. If your project is leveraged, time is of the essence since the longer the house takes to sell, the more interest your loan accrues.
Luckily, there are lots of resources out there to make the task a little less formidable.
Assess Current Market Conditions
The housing market is sensitive to many factors so pay attention to where we are now but with an eye on the future.
✔️Assess current inventory levels closely since a high number of houses on the market might mean you need to be more competitive with pricing. Conversely, a low inventory situation allows for more flexibility.
✔️The average number of days on market can also be a helpful harbinger signal of housing demand. How long similar homes are sitting on the market before selling can inform your pricing strategy.
✔️Keep a close eye on macroeconomic factors like rising interest rates and inflation indicators which can strongly impact housing prices.
✔️Be alert this Friday when the U.S. core personal consumption expenditures (PCE) price index report – the Federal Reserve's preferred measure of inflation – is released. Expectations are for it to hold steady on a monthly basis which may impact overall interest rates.
Check Out Some Comps
Look closely at the prices of similar nearby houses sold over the past few months. The comparable homes or “comps” will give you a pretty good idea of the sweet spot for pricing your property.
✔️Make sure the houses offer similar amenities such as square footage, number of bedrooms, and finishes. So be smart about it—compare apples with apples. A house that sits on an acre lot and has 4 BRs won’t make a great comp for a 3 BR house on a half-acre lot.
✔️Many websites like Pennymac or FreddieMac offer free Automated Valuation Models or AVMs in which you type in your address and the model uses a nifty algorithm to compare comps in your area and then spit out a suggested price.
Of course, AVMs are just a starting point. For in-depth market analysis, it usually pays to consult a realtor.
Turn To The Professionals
Realtors know the ins and outs of the market and can pull comps in line with your property. After a thorough walk-through, they can also give you useful feedback on how to make your house more desirable to the perfect home buyer.
Happy To Help
To find out how Navigator Private Capital can help position your next project for success, reach out to your loan officer directly or call 888.444.3160 or email info@gonavcap.com to be connected. Need a quick quote? Click the link below:
https://thinknavigator.com/NavCap/GetAQuote.php
We look forward to working with you!