When you begin your journey flipping homes, there are some things you need to know, and other things you will want to avoid. We’ve put together some tips on how to sell a fix and flip house fast in Chicago.
Flipping a home in Chicago can be a great way to turn a profit, but it is never as easy as it appears on HGTV. We hope our tips and tricks will help you sell a fix and flip house fast!
First You Must Understand Your Location and Market
They say a home’s value is based on location above all else, with 60% of its value derived from its geographical position. Home prices can vary drastically from one neighborhood to another, even within the same city.
A house that represents great value in one part of town may sell for considerably less just a few miles away. Therefore, it is crucial to do your homework and thoroughly understand the home prices in your specific neighborhood. This knowledge will help you set a competitive and realistic asking price for your property.
Additionally, it’s important to have a grasp of the demographics in the area. Understanding who is buying—whether it’s families, seniors, young professionals, or another group—will give you insight into what they are looking for and what they can afford. Different demographics have different needs and preferences, and catering to these can make your home more attractive to potential buyers.
By combining a thorough knowledge of local home prices with an understanding of the area’s demographics, you can better position your home in the market. This strategy will help you attract the right buyers and achieve a successful sale, maximizing your return on investment.
Don’t Over-Improve The Home
When making improvements to a home you plan on flipping, remember that less is more. There are no guarantees that you will recoup the costs spent on renovations. Focus on replacing things that are not working or appear very old, but avoid excessive upgrades.
Keep your improvements simple and cost-effective. For example, if the bathroom cabinets are old and unattractive, consider replacing them with a basic pedestal sink instead of opting for expensive custom cabinetry. This approach keeps your renovation costs low while still improving the home’s overall appeal.
Always keep in mind that no matter how many upgrades you make, a home will not sell for $500,000 when neighboring homes are going for $150,000. The market value of your property is largely influenced by the surrounding homes, so it’s important to be realistic about your selling price.
By sticking to necessary repairs and avoiding over-the-top upgrades, you can maximize your return on investment. This strategy helps ensure that your improvements add value without exceeding what buyers in the area are willing to pay. Practical, targeted renovations will make your home more attractive to potential buyers and increase your chances of a successful sale.
Price Your Home Before Anything Else
Before you sign the papers to buy a home, have a clear idea of what you will eventually sell it for. Be careful not to overinflate this number. Pricing competitively is key to attracting buyers and selling the home quickly.
It’s important to be realistic and stick to your numbers. Don’t assume that a $40,000 renovation to the basement will allow you to add an equivalent amount to your asking price. Home improvements can enhance the appeal and value of your property, but they rarely translate to a dollar-for-dollar increase in selling price.
Review all your numbers carefully before getting started. Take into account the initial purchase price, estimated renovation costs, and the expected selling price. Also, remember that repairs and renovations often end up costing more than anticipated, so it’s wise to budget for unexpected expenses and give yourself some financial cushion.
By setting realistic expectations and thoroughly evaluating your financials, you can make informed decisions and avoid potential pitfalls. Careful planning and prudent budgeting are essential for a successful and profitable real estate investment.
Only Drop Once
When you initially price your home, give yourself enough room to drop the price once. Plan to make a significant reduction of $5,000 to $10,000 if the house isn’t receiving much attention at your original asking price.
It’s crucial to limit yourself to just one price drop. Frequent price reductions can create the impression that something is wrong with the house or that you are desperate to sell, which can deter potential buyers.
Before embarking on any real estate investment project, it’s essential to educate yourself and collaborate with professionals you can trust. Real estate agents, appraisers, and financial advisors can provide valuable insights and guidance to help you navigate the market successfully. Understanding the dynamics of pricing, buyer psychology, and market trends will empower you to make informed decisions and achieve the best possible outcome for your investment.
Taking the time to learn and seek expert advice will not only enhance your confidence but also increase your chances of a smooth and profitable real estate transaction.