Depending on when you started selling real estate, you are quite likely to think that it will be one of the easiest things in the world. If you are a real estate investor selling real estate, however, you may find that the process is not quite so easy when you are working both sides of the equation. Most investors buy an investment property, add value to it in some way, and then sell that property. Sometimes, they flip real estate, while other times they may hold the property until it appreciates or until they need to liquidate despite a good cash flow.
When you are selling real estate, understanding your motivations and the likely motivations of your buyers will be the key to selling it well and for a profit. For the purposes of this article, we will assume that you are selling real estate with the intent of making a profit or otherwise supporting and sustaining a real estate business rather than any other purpose, such as tax deductions or personal reasons.
3 Indications You Are Selling Real Estate The Wrong Way
If you are selling real estate the wrong way, there will be little doubt in your mind that there is a problem. The primary indicator you have an issue with your real estate sales will almost always be that you are overworked and unprofitable, but in some cases, you may be making money but not enough to create acceptable returns on your time.
We have identified three major indicators you are selling real estate the wrong way.
Indicator 1: You Are Spending Too Much Time Working Your Deals
If you are spending hours and hours a day on your real estate deals but feel you are spinning your wheels and cannot get to the closing table, then you may be spending too much time working on your deals instead of doing them. These delays may mean that you are focused too much on one part of the sales process, such as networking instead of lead generation, or that you have so much volume in your real estate business that you need more assistance with the logistical side selling real estate.
Take a good look at your daily routine. Are you overemphasizing some portion of your real estate sales process at the expense of another important facet? If so, then you are likely spending too much time working your deals.
Indicator 2: No One Knows You Are Selling Real Estate
If you have been selling real estate for more than a week and your immediate circle of family, friends, and co-workers are still unaware, then you are not promoting your real estate business effectively. Your success is reliant on your ability to let people know what you do and how they can work with you to mutually productive ends. You cannot afford to be reticent about your real estate investing because, in real estate, your networking will eventually contribute substantially to your net worth!
Indicator 3: You Are Not Making Any Money Selling Real Estate
Are you simply not selling real estate? If you are not making any money selling real estate and you have examined your lead generation and promotional and networking strategies and found them sound, then you probably have a sales volume problem. This problem is the simplest issue to identify but may be the most difficult to diagnose the specific reasonings.
Top 3 Mistakes Investors Make When Selling Real Estate
When real estate investors finally get to the sales side of their real estate investing process, often they make some crucial mistakes that interfere with their ability to close deals. Here are the top 3 basic mistakes investors make when selling real estate, especially when they are new to the business.
Mistake 1: They Price Too High
After you have spent months building value into a deal, it may still be difficult to see the results clearly. New investors often price their deals far too high for the market. They may price the property so high that it sits passed over in “listing mode.” This dormancy creates a problem due to continually accruing carrying costs even if it eventually sells for the list price. More often, deals priced too high sell below market value because their extended time on market hurts their perceived value.
Mistake 2: They Do Not Track Performance Metrics
New investors often do not realize they need to track their performance metrics. It is crucial to monitor performance metrics to understand and adjust based on which strategies they are using that are working and which strategies are not. As a result of this ignorance, investors find themselves wasting time, and by extension money, when they continue to sell their properties or attempt to sell them using ineffectual methods.
Mistake 3: They Are Ashamed Of Their Business
In the previous section, we mentioned how important it would be to your success that you can convey to others that you are selling real estate. You cannot do this if you feel ashamed of your role as a real estate investor! Investors are the backbone of the real estate market and of neighborhoods and communities. They solve huge problems for distressed homeowners and motivated sellers. They create housing opportunities where none previously existed. Be proud of your business and do not hesitate to tell everyone what you do.
What Should You Do If You Make These Mistakes?
If you are starting to feel a sinking in your stomach as you read this article, take heart. Just because you made these mistakes selling real estate in the past does not mean you must continue to do so! Here are a few tips to correct your real estate investing trajectory:
- Reduce your overhead costs so that your returns are more likely to cover them
- Figure out strategies to identify the things you are doing that are working in your real estate investing business so you can track your metrics
- Practice being proud of your role as a real estate investor, including refining a 30-second “elevator pitch” about your business and how to work with you
It Is Time To Take Action
If you have struggled with selling real estate, you likely recognize one or more issues in this article. Now that you can see them more clearly, take action now to correct them! Do not identify your problems and then ignore them. Instead, make adjustments and edge close to success in selling real estate.