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Welcome to Bob Vila’s Guide to House Flipping, a series dedicated to showing you the best places for house flipping, crucial steps for selecting a property, must-do upgrades and repairs, and surprising ways to reduce your costs to get the most from your house flipping sales. Here you’ll find fresh insights mixed with Bob’s tried-and-true advice, our vetted shopping guides, and the inside track to the right professionals to get your flip to the finish line.
Q: My wife and I found a great house at a great price. We bought it as an investment property and rehabbed it so we could resell it. Now, the worst has happened—our flip house is on the market and it’s been a flop for buyers. What do we do?
A: It seemed easy enough from the outside, right? You invest in a fixer-upper property, make the needed updates, list it for sale, and turn a profit. Unfortunately, it’s not always that simple. What if you can’t sell your flip house? Sometimes, for a variety of reasons, your flip house might not sell right away, and that makes for an expensive few months while you’re paying holding costs.
Or, perhaps you’ve fallen in love with your investment and want to make it your primary residence. Whether you’ve decided you want to keep it or you can’t get it sold, there are a few strategies to consider before your next move.
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If You Still Want to Sell Your Flip House
Check the price.
Is your flip house listed at the right price for the neighborhood? A number of factors go into how much a house is listed for, but buyers don’t care about all those factors. For instance, buyers won’t care how much you invested in materials to flip the house—they’re more interested in how the house compares to others nearby and whether they’re getting their must-have amenities and the most bang for their buck.
If you think price may be the issue, run the numbers again with houses in your market that are comparable. The market can shift rapidly. If you’re selling the flip yourself, several websites can help you determine the worth of the home. For those who are new to buying and selling, consider using a trusted realtor who knows the market and can accurately list your flip house, so it’s priced to sell now.
Do buyers know about your house?
Perhaps your flip house isn’t selling because buyers just don’t know about it. Make sure the MLS for your house is correct. Maybe the bedroom, bathroom, or square footage count is wrong. Is the address or zip code one number off, making it hard for people to find? If potential buyers can’t find your house, they can’t schedule a tour.
Check your listings on the popular websites such as Zillow and Realtor. You may even want to consider listing it on craigslist, Nextdoor, and other local, neighborhood websites. Someone in your vicinity may have watched your flip progress and be interested in the house or know someone who is.
Evaluate the curb appeal.
Make sure your flip home’s curb appeal makes a great first impression. If the dumpster is still out front, it may tell potential buyers that the property isn’t quite ready to be sold.
Your flip house’s outside should look like it’s also been updated, making it stand out among the neighbors. Does the yard need new sod? Do the trees need to be trimmed? Are there shrubs and plants out front that make the house look welcoming? If the exterior wasn’t a big part of the flip, you can at least clean it up with a good power wash and fresh paint on the front door or shutters.
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Does it show well?
Perhaps you chose fixtures that were a little too trendy, or went with paint colors that are a bit too bold for buyers. Maybe the inside isn’t staged well and buyers are having a hard time seeing themselves in the property.
If this is the case, consider making some manageable changes. Swap the trendy cabinet hardware, faucets, and light fixtures for more traditional options. Paint over that bold color in the dining room with an agreeable beige or light gray. Sometimes these small, inexpensive swaps can make all the difference when it comes to how buyers see the space.
If You Want to Keep Your Flip House
Consider renting it out.
If your flip house has been a flop with buyers and you’ve tried everything, consider renting it out to start recouping your investment. Whether you go with long-term or short-term tenants, you’ll start getting some money back in your pocket.
Going the long-term rental route may be a good option if houses just aren’t selling in your market and you want to wait it out. If you decide on the short-term rental route, such as listing it on Vrbo or Airbnb, know the laws in your area. Some cities restrict the ability to offer short-term rentals, or you may have to register and get a license or permit before you list your property.
Who knows? One of your tenants could fall in love with your flip house and want to buy it for themselves.
RELATED: 12 Final Touches That Can Help Sell a Flip House for More Money
Make it your residence.
It started as an investment, but after all that hard work, you’ve fallen in love with your flip house and now want to live there yourself. What do you do now? Well, there are some things to consider.
First, if you own your current primary residence, you’ll need to determine what you’ll do—sell it or rent it out.
Second, if you have a non-occupied-owner loan, otherwise known as an investment property mortgage on your flip house, the rate may be higher and the loan terms shorter than a traditional homestead or primary residence mortgage. In this case you’ll want to talk to your lender about possibly making changes to the loan or refinancing.
If you do decide to turn your flip house into your primary residence, make sure the utilities are in your name, and contact your insurance company to make the necessary changes to your homeowner’s policy. Don’t forget to notify all your creditors and banks of the address change. Also, you’ll need to note the changes on your tax returns because there are different categories for investment and primary residence properties.
Finally, you’ll want to contact the property appraiser’s office in your county to file for a homestead exemption. Homestead exemption laws vary by state, and the exemption is a type of property tax exemption that can protect you, your home, and your home’s equity in a variety of scenarios.