Why is my Eastside flip not selling? What should I do to sell it?

Question

Why is my Eastside flip not selling?What should I do to get it sold?

4 bed, 3 bath, 3820 sq ft, built 1991

Listing description - Cathedral ceilings and rich hardwoods welcome you to this stunningly refreshed Burnstead home in the coveted Tibbetts Station. The versatile layout features all-new kitchen with fully restored sun wall, granite counters and SS appliances and connects to a cozy family room complete with box beam ceilings. Four bedrooms including the spacious master retreat with gorgeous remodeled bathroom. Plus, new presidential roof, 3-car garage and more on a large lot in the prized Issaquah SD. Do not miss it.

The house really does have everything a buyer in the suburbs would want.Almost every room in the house was overhauled with clean, contemporary finishes.The pro photos came out great, the house shows super well, why haven’t I gotten an offer?

The HOA is a plus in this neighborhood as it employs street sweepers, there are parks, and all houses have similar brickwork on the fascade.

I might have come out a bit bold with my original pricing, but comps and $/SF of recent sales projected I could have listed it even higher.I’m happy I didn’t.I’ve made a couple price reductions over time and really believe this house is a fantastic deal at $1.2 million.I’m seeing very few sales over a million in this area of Sammamish and Issaquah and think that’s the culprit.

What should I do to get this house sold?Any advice would be much appreciated.Anyone want to meet at the house and take a look?

Thank you!

Jeremy

Hal Thompson · Answer

So you paid $784,000 for this distressed property a year ago (at the absolute top of the Seattle market), rehabbed the kitchen, and now want +$450000 for your troubles?

Seems like some flippers are going to learn that the bidding wars of the last few years work in reverse also, when the buyers have all the options/power...

Megan Shay · Answer

Second @Jake Alger. Over $1M has definitely softened.

Case in point: I sold a $1.175M house, new construction, beautiful modern in January 2018. Couple split up, had to sell. We tried last fall (September/October) when everything hit the skids, then took it off the market for the holidays and tried again early spring this year. Took a month of hard work (lots of open houses, social media marketing, email newsletter, follow up with agents, etc.), but we got it done. Unfortunately for my sellers, they had to take a $100k bath on the price since in the meantime, inventory increased, it was the holidays, Chinese cash went away, and everyone was wondering: What is happening with Amazon's HQ2???

And in case you are wondering, what they paid for it a year ago was indeed fair for the market at the time; they even got a pretty decent break since the builder had overpriced to begin with.

@Russell Brazil, it's listed by one of those listing services, 1% fee FSBO deals. I suspect there's no agent marketing strategy, but correct me if I'm wrong, @Jeremy Benezra?

One final note: After more than a couple months on the market (and that's pretty generous), buyers wonder what's wrong with it. Never fails. Could be absolutely nothing wrong, just listings get stale. I'd take @JakeAlger up on his offer to check it out.

Good luck!

Monica S. · Answer

The house has nice architectural elements and your updates are lovely. The price also seems right for that area. My initial thoughts would be to update the exterior photos now that the deciduous trees have some leaves. Are there any flowering plants currently? If not, could you add some? A couple large pots with some colorful flowers would make the front entry very inviting and be relatively low cost. Adding little pops of color would cause the eye to stop and study the photos, flowers that smell great would be a bonus for showings.I don't see any pictures of the back yard and you mentioned it was small, but maybe that could be used as a selling point? Less yard to maintain? A family with middle school/high school aged children might not need or care to have a large back yard, but instead a fun place to hang out outdoors could make your place stand out. I would add some lounge chairs and a fire pit to the staging and some cafe lights. Show that the yard might be small but the possibilities for entertainment are not limited. I've noticed a few properties in the area are using Matterport 3D walkthroughs. I know I personally love them for getting a better idea of a house before making the trip out to see it. Perhaps that is something to consider? I can see what you mean by updating the brick fireplace, but I actually think it's pretty cool, especially with the gray shelves next to it (good color choice!)

Hal Thompson · Answer

@Jeremy Benezra Yeah, but that's precisely my point. Your flipping transaction costs are a deadweight loss to the market. The only value they create is in the tangible increase in livability to the owner. If the transaction costs of buying, light rehab, and selling outweight the value increase for the buyer, they will choose other options in the same neighborhood. In the past few years, when inventory has been incredibly tight, this has tipped the scales in favor of flippers and sellers. But in a non-inventory constrained market, it may tip the scales away from the flippers, since your transaction costs are the buyer's deadweight loss.

As inventory increases, buyers have more options at different price points. They don't care what it costs you to flip the house, only what they can get for the same amount of $'s. If they can also buy a ~$750k house, invest $150k, and not have any transaction costs, they may prefer that to your flip.

Jeremy Benezra · Answer

Yes I am using a cut rate listing service - Savvylane.  I’ve sold I think 15 flips in this manner, so it’s worked pretty well in the past.  I agree it might be different in the $1m+ market and it also might be different as the market has lost a lot of steam the past half year.  I’ve held open houses and have had showings every week.

Feedback from showings has generally been really good.  Almost everyone has said great floorplan, great remodel, pricing is right on.  A couple buyers have said small backyard and one said the neighbor’s dog was barking, neither of which I can’t do much about.  Most recent feedback:

“Hi!  Great home!  At this time we are going to continue to look.  We will keep your home on our favorites list.  Thanks!

In my opinion, corners were not cut on the remodel.  The only things I might have done differently was paint the entire exterior, update the powder room bathroom differently to match the rest of the house, update the brick fireplace (though I love the look of a brick fireplace).

@Hal Thompson – your numbers are pretty far from realistic.  I wish it was so simple as buy for $784,000 sell for $1,200,000 = profit of 416k.  Unfortunately the numbers only work that way on the Flip that House tv show.  As you know, there are buying costs (Vestus), the remodel cost of over $150k, interest, property tax, insurance, utilities and selling costs.

On the NWMLS, I think the home has to be delisted for 90 days for it to come back as a new listing and with zero DOM.  That would take me into October, not an ideal time to come back on the market.

I think the big factors are:

Price – which everyone is saying the price is right on for the area

Timing – things have really stalled over a million in Issaquah and Sammamish

I’m debating switching this listing to a full service agent I have a relationship with.  But what will that get me?  When most buyers these days find their house online, what kind of marketing would help a sale to occur?  Postcards with photos mailed to nearby residences?  I don’t think more open houses is going to do it.  Host a meetup for local investors with food and drink and present my numbers as a case study to benefit all?  I’m not going to post my numbers publicly until after a sale.  Maybe investors who come see this house would have someone in mind who would love to live in it?

Thanks for all the ideas everyone!

Sam Shueh · Answer

Any property on the market and had a few price reductions suggest the local market is soft. Here in MV, Sunnyvale, outside MSFT, FB, GOOGL, TSLA since late last year most home sellers expect to sell on first weekend with 18-20 offers. Many found out the hard way people looked at them and left. Some stayed on the market ~ 2 months. It was not until home sellers realized the condition has changed there are more home sellers and many had to do steep cut like -15% reduction then homes start selling. This is with full employment and historical low interest rate.

It used to be easy to do a flip. A few had to really cut margin and one is going back to high tech to get a job. I think your home is beautiful you could take it off the market and price it to sell. Any property on the market longer than 30 days suggests it probably will not sell.  Good luck.

Tanner Marsey · Answer

Higher end has softened down in Southern California for sure. Maybe the same up your way? Did you guys cut corners at all on the flip? People aren’t going to spend 1.2 million on  typical flip if they can buy the same down the street that hasn’t been flipped but is nicely updated. Obviously if everything was done right then that does not apply. Can get away with quick flips on the lower end but not a million plus. Drop that price even more in order to sell. We’re in the summer swing when people are looking to buy and it hasn’t sold. softening high end market and people are unsure about when/if a down turn is coming. Do what ya gotta do to sell it. Good luck!

Jake Alger · Answer

Hi Jeremy,

What have you been doing to market it? Our market has softened a bit for the higher price point homes and they are needing more marketing attention than before, in my opinion.  Networking with other individuals and getting the property in front of agents and their clients is imperative.  The days of listing on the MLS and getting a ton of traffic isn't a strategy that's working well at the moment (not saying this is what you did, just giving insight broadly).  I've seen really well priced homes move quickly, and others sit.  The only difference I see is the marketing strategy, network and follow up.  Once restrictions on overseas money was tightened, we saw a major change.

Have you had good activity on the property?  What's feedback been?

I'd be happy to meet you to take a look, or I can go out myself.  The pictures seem pretty self explanatory and it appears you've done a great job with the rehab.  Pricing seems inline with other properties in Klahanie and it's a great location to commute from.  I really feel like it's coming down to marketing.

Give me a shout if you'd like to chat.

Russell Brazil · Answer

What does your agent say? What strategies is your agent employing to get it sold?

Why is my Eastside flip not selling? What should I do to sell it?

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