Why You Shouldn’t List Your Flip Too High

By Christina El Moussa

Flipping a home can sometimes be a process that ‘flops’, indicating that perhaps you have listed the home at an inflated price and it shows no signs of moving from the market. However, in an ideal world, flipping is a venture that happens quickly, smoothly and easily and gives you the opportunity to turn a profit in no time at all.

The dangers of purchasing a property, taking the rehab initiative (and the investment) to make any improvements to turn it into a highly desirable home and then listing the property back on the real estate market at too high a price are clear. Faced with a flipped home that seems to be inflated compared to its market condition, property condition, location and market value, buyers may balk and become uninterested, even in a healthy market environment. We know the importance of hitting the target price mark when listing your newly flipped home and will share this with you in the handy guidelines below.

Overpricing scares away the very buyers you want to attract

In order to best appeal to the buyers who are searching for homes within a certain range, it is essential that you don’t give them sticker shock. Not only will an inflated home price cause a home to linger on the market for what may seem like forever, but it will successfully keep buyers away who believe that your home is not anywhere within their budget. Pricing your flipped home on point with its value and the profit that you need to get out of it ensures that the potential buyers who will be searching for your home will be able to find it and see that it is within their range.

Don’t aim for excess profit just for its own sake

Pricing real estate strategically and accurately is not so much a game of how much you can get, but more of an art of how you can find the best price that the right buyer is willing to pay. Of course, you did upgrade and flip the home and you deserve a profit out of the deal, but shooting for an extravagant sale price that you know is out of the water is more likely to stall the completion of the flipping process than anything else.

Inflated prices are bad news for the surrounding neighborhood

Not only is inflating your sell price not in your favor, but it bodes negatively for the surrounding real estate as well. If a buyer is initially scared off from one overly pricey home in an area, they are less likely to keep looking in that particular location, which may end up creating an overall trend in that spot and cause home shoppers to shy away from the locale. When you inflate the price of a flipped home beyond its true value, you can end up doing a disservice to the real estate health of an entire area.

When listing your flip, take into account the figure that you need to recover from the home as well as the selling prices of comparable homes in the area. These numbers, combined with any estimates of the property’s value, will help you make an informed, smart decision about a fair sell price.

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