fsbo while renovating or wait and list

[Dave Charron]

I have a thought to possibly save listing fees on flips. What do you think about putting out a fsbo sign while renovating? I could potentially save myself the whole commission. If it does not sell by the time it is finished then I will list with agent.

Im not sure if this is not a good idea to let potential buyers see the house before it is completed?

What do you think?

[J Scott]

I'm generally on the fence about showing houses before they are completed (I've had both good and bad experiences with this, and will elaborate below), but in general, getting some exposure for your rehab while it's in progress is not a bad thing.

While we generally don't put "For Sale" signs out during a rehab, we will put "Coming Soon" signs out, with contact information for our agent (my wife). This way, while we won't get calls from every person driving by who is just curious about the listing (those people will wait until it's for sale, we will get calls from those who may be very serious about potentially buying the property.

For example, it's not uncommon to get calls on our "Coming Soon" signs from neighbors (who have friends looking for houses), from neighbors who are renting and may be looking in the subdivision, from agents who have qualified buyers looking in the neighborhood and want to know when to expect the listing, etc.

In general, the traffic we get from our "Coming Soon" signs is much more qualified than the typical calls we get from drive-by buyers who see the "For Sale" signs.

Now, that said, I try not to actually show the property before it's completed. Most buyers aren't very imaginative (I'm not either!) and can't visualize what a property will look like after it's rehabbed. In fact, I don't like to show properties until they are completely staged.

That said, if a buyer is serious (and pre-qualified), and really wants to see a property during construction, we'll generally take them to a completed rehab first, just to let them see the quality of the work and the finishes we use, and then let them walk through the rehab. During the walk-through, we will stress the layout/floorplan, and reiterate that they'll want to come back after the rehab to see the finished product.

Most of the time they'll want to come back (if they haven't already found a house), but it's clear from their reactions when they come back that they had no idea what the final product was going to look like (they are generally very pleased and surprised).

So, while it generally doesn't hurt us to show the property during rehab, the first impression the potential buyer gets is MUCH worse than what it could be if they waited, and there's always a risk with that. But, if they (or their agent) insists, we won't stop the buyer from looking...

By the way, this has been a big issue with our current three houses, which are all in the same subdivision. One is under contract, one is being rehabbed and one is waiting to be purchased by us (the seller is having some title issues). When we get calls on the one that is under contract, we tell them it's under contract but that we have two others waiting to hit the market. We encourage them to look at the one that is under contract (and is staged), and suggest that they come back to look at the others as soon as they're finished. Some buyers want to see the other two (the ones they could possibly buy) immediately, and while I will discourage it, if they really want to see it, we'll let them. We figure it's better than never getting the call in the first place.