4 Creative Ways to Market a House for Sale
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Originally Posted On: https://www.dohardmoney.com/4-creative-ways-to-market-a-house-for-sale/
Many real estate investors don’t profit on a deal until they actually sell a house. And, in some markets, this can be challenging. As a result, investors often ask me to explain some creative ways to market a house for sale.
It depends on the type of house for sale. For wholesalers selling distressed properties, I recommend A) finding all the cash buyers in a market, and B) confirming what they want. For flippers selling rehabbed properties, listing on the MLS and following up with potential buyers makes the most sense.
I’ll use the rest of the article to provide some more insight into creative ways to market houses for sale. Specifically, I’ll discuss the following topics:
- Creative House Sale Marketing for Wholesalers
- Creative House Sale Marketing for Flippers
- Final Thoughts
Creative House Sale Marketing for Wholesalers
With a wholesaling strategy, investors don’t actually purchase homes. Instead, they find distressed properties that typically appeal to fix & flip investors. And, once they find a property that would be a good deal for a flipper, wholesalers put the property under contract. However, rather than close on the deal, wholesalers assign the contract to a fix & flip investor – for a fee. Then, this investor can close on the deal, and the wholesaler walks away with a profit.
As this description makes clear, wholesalers have a very specific pool of potential buyers – other investors. Wholesalers generally do not look to assign property contracts to people buying a primary home. Accordingly, the following creative marketing techniques revolve around selling to investors.
Marketing Technique #1: Cash Buyers List
With traditional mortgages, lenders will not approve the financing of a distressed property. These sorts of homes pose too much collateral risk for lenders, so investors need to either A) use hard money loans, or B) purchase distressed properties with cash.
Recognizing that many fix & flip investors purchase homes with cash, wholesalers can create a cash buyers list. Basically, this is a tracker of all people who’ve bought properties for cash in the same zip code over the last year. Armed with this information, wholesalers can narrow down their list of potential buyers to motivated leads—people looking for similar properties. And, once they find a deal, wholesalers can reach out to these cash buyers directly, a far more efficient process than marketing to all potential buyers.
Marketing Technique #2: Reverse Marketing
With this technique, you reverse the sequencing of a deal. Instead of finding a deal and then finding a buyer, you find the buyer and then find the deal. Essentially, reverse marketing means finding motivated buyers – typically fix & flip investors – and asking what they’re looking for in terms of property and price, and then going out to find those deals. That way, you’ve already secured a buyer before putting a property under contract. As soon as you sign the contract, you contact the buyer, explain that you’ve found a property meeting their requirements, and then you assign the contract.
Wholesalers can take a similar approach with landlords in the area. These real estate investors also serve as a large potential pool of buyers. I personally recommend putting together a list of larger landlords in an area, and then contacting them to ask what sort of rental properties they want to purchase.
With this information, wholesalers can go out and find deals for landlords. Once under contract, they let a landlord know that there’s a contract available for a rental property that fits his or her criteria. Once again, this allows wholesalers to find the buyer and then find the deal.
Creative House Sale Marketing for Flippers
Fix & Flip Overview
As discussed above, fix & flip investors tend to look for distressed properties that they can purchase at a discount – making them prime buyers for wholesalers. Once house flippers purchase a property, they renovate it to the point that it’ll qualify for traditional financing. And, once it meets this standard and appeals to potential buyers, flippers sell the renovated properties, typically at retail to people buying primary residences.
As a result, house flippers need to market their homes to people paying retail for a ready-to-occupy property. Generally, this means marketing to people buying homes. But, some buy-and-hold investors will also purchase rental properties at retail, knowing that the property will appreciate during their investment horizon.
Marketing Technique #1: List on the MLS
When you want to sell a renovated property to retail buyers, you should absolutely work with an agent and list it on the Multiple Listing Service, or MLS. Simply put, the MLS provides maximum exposure to retail buyers. People looking for primary residences and many investors focus their property searches solely on those listed on the MLS within their market. Furthermore, real estate agents anywhere can access these listings, meaning that you also gain exposure with out-of-market buyers considering a move to your area.
When you list a property on the MLS, two factors matter the most to potential buyers: price and home condition. And, these factors lead directly into the next creative marketing technique.
Marketing Technique #2: Potential Buyer Follow-ups
As stated, I highly recommend using a listing agent when you sell a home. The value they bring in understanding the market, sales compliance, and coordination with potential buyers more than justifies the commissions they receive. And, as an aside, house flippers should just factor these commissions into their budgets from the beginning.
Unless you find yourself in an extremely hot seller’s market, most properties you list as a house flipper will have several potential buyers visit. After each one of these visits, have your listing agent follow up with them (or their agent) directly to ask what they thought about A) price, and B) property condition. At a high level, this will let you read trends in the market. For example, if five potential buyers in a row all said that the home price is too high, you’ve likely priced it above the market value.
When you see these sorts of trends, you can do one of two things. On one hand, you can just wait it out, keeping the home priced as is until a willing buyer makes an offer. But, this can come with tremendous costs. The longer you hold a property for sale, the longer you need to pay the associated holding costs (e.g. hard money loan interest, insurance, utilities, property taxes, etc.). On the other hand, you can listen to a potential buyer’s feedback and offer to make any requested changes in order to put the house under contract.
For example, say a potential buyer doesn’t like the green paint in the living room. When you hear this feedback, you can offer to paint the property as a condition to closing. This presents a win-win: you go under contract, and the buyer gets a property in the condition he or she desires.
Creatively marketing a house for sale depends on the type of house. As illustrated, wholesalers looking to assign the contracts for distressed properties will use different marketing techniques than house flippers selling renovated property at retail. But, regardless what situation applies to you, the important thing to understand is that creative marketing strategies do exist to help you quickly sell homes.