What I Do When I Can't Sell A Property

When A House Won't Sell...

I currently have a house that is a piece of crap. It is in horrible condition in a less than "aspirational" neighborhood. I've sent this property out to my buyer's list, marketed it online, posted it to online classified sites, syndicated it to other wholesalers, put out bandit signs and still haven't been able to sell it.

Get A Price Concession

Whenever I have this much difficulty selling a property like this, its usually because the price is too high. So I went back to the owner and got a pricing reduction and I think I've gotten the price as low as I think we're going to get it. I've even gotten him to agree to a structured purchase as well but the property still isn't selling. So what's a guy to do?

When Price Reductions Don't Work

I learned this little trick from Sean Terry via one of his podcasts last year. It's a pretty nifty tactic and while I only bring it out every now and again (because it can be a little time consuming and also has implicit costs associated with it), at the very least, it helps to get traffic to a property. What's this little tactic called?

Cash Buyer MLS

So basically what you do is

1. Log in to (or have your agent log in to) the MLS
2. Look for all the completed sales that have happened within a three (3) to five (5) mile radius around your subject property
3. Filter down to only cash transactions that have happened in the past six months
4. Find the agents on those deals
5. Contact them and tell them you have a property you need their help to sell

The Rationale

The rationale for this is that people who have purchased in the same area for cash are more likely to purchase for cash in the same area. You could definitely find the purchasers of the properties in the records and reach out directly to them if  you didn't want to pay fees (see below). My view though is that the agents usually have more than one buyer per area they can reach out to. This gets increased traffic to the property and increases the probability of getting an offer to get the deal done.

The Cost

I pay the agents a referral fee of at least $1,500 and sometimes more depending on the economics of the transaction. This fee is not a commission and I make sure to point this out to the agents in my communication with them. While I don't enjoy paying out fees (because it cuts into my margin), if they can help me move a property I have had difficulty moving it is more than worth it.

My Spin On This

Sean suggests directly calling the agents in the podcast. I am loathe to blindly place dozens if not hundreds of calls to agents who have no idea what I might be talking about. Instead, what I do is contact the agents for the prior deals via email first. Then I also send them voice blasts letting them know I already sent them an email and basically summarize what I already emailed them about. I also usually text message every one as well just to let them know what I'm doing. My message is usually something generic like this:

Hey this is Marvin at ###-###-###. I sent you an email earlier today about a property I have for sale in [NEIGHBORHOOD]. I saw you worked on a cash transaction in the neighborhood a little while ago and just wanted to see if your buyers might be interested in this one. I'm paying a referral fee of $X for buyers that is paid at closing. If you have any questions, please give me a call back at ###-###-#### or just reply to the email I sent you earlier. Thanks!  

Does It Work?

Sometimes this works and sometimes it doesn't but at the very least, it helps to get more buyers in the front door. If I can't get a deal done after heavily marketing a property then that means I probably won't be able to get a deal done in a reasonable amount of time and I just move on to the next deal. I hate letting deals go but sometimes its simply not worth investing increased time or money to try and move a property.

Tell me in the comments below...

What other ideas do you have to move problem properties?