Struggling to Sell our Flip?!

[Peake Nasrallah]

Hey BiggerPockets! I am fairly new to this whole thing. My partner and I finished our 2nd flip in a North Atlanta suburb back in February. We bought it completely in cash at $271,500 and used a family source for the construction loan. We bought higher than we wanted to, but felt the neighborhood had solid value and excellent comps. We put roughly 50K into the rehab and priced it slightly higher given the current seller's market and because of how much $$ we had in it. We completely redid all the floors, added a 1/2 bath and fully remodeled the kitchen and all new appliances along with a ton of other upgrades. We put it on the market for $370K. Our agent was able to get us under contract in 2.5 weeks. That contract fell through due to the appraisal coming in at 305K?! The appraiser's comps did not accurately reflect the home we were trying to sell at all. In fact, we felt all of the aspects of this appraisal grossly undervalued our home. 3 weeks later and we went under contract again...3 days later the buyer cancelled the contract because they decided "they weren't interested anymore." We then put it back on the market at $365K for another 2 weeks without any offers at all. So, we pulled it off the market and began to address some mild cosmetic issues with the home that buyers were pointing out: all new interior doors, replaced the rest of the old trim, new front door, and various other cosmetic touches. 1 week later back on the market at 365k just in time for our agent to do yet another open house over the weekend: no offers. Now its the beginning of May, if we drop our price anymore, we'll further cut into our profits. How long do we keep this thing on the market at its current price before we drop the price again? How can we avoid bad appraisals in the future? Are we doing anything fundamentally wrong with this deal other than maybe buying too high?

[Ned J.]

The market doesn't care what you put into it or how much profit you want to make. The market price is going to be set by the comps in your area and its very easy to put some emotion into feeling your property is "better than the comps and worth more" .... but the market doesn't care about your feelings. The market is hot in most locations and they arent buying your house..... there is a reason for that and its probably the fact that those buyers can find an equivalent or better unit for less. 

Do what you need to do to reset the DOM and drop your price..... letting it sit vacant for months to squeeze a few $$ out of the selling price is black hole. Your holding costs are gong to negate the higher selling price, assuming you get one

I would rather set the price at slightly below market and hope for multiple bidders or get it sold and move on.