Using the Push vs. Pull Method for Your Investment Property for Sale
Recently, we received a call from a dear investor (I like to call them The Shark Pool) who was interested in selling some rental investment property.
After we talked for a few minutes about the Metro Detroit Market and the current climate, the conversation took a strange turn.
We went from talking about a reasonable sale in a suitable time frame– very normal, not a rushed conversation– to getting several thousand dollars over the market rate for the property!
Now, selling over the market price isn’t impossible to do, but it’s rare; and there needs to be some specific market conditions happening to pull it off.
So, after the investor jumped off of their desk and calmed down, I explained a very useful strategy when it comes to selling investment property in and around Detroit: the Push vs. Pull method.
When investors set their asking price for properties, it’s critically important to know the real sales price of other similar investment properties that have sold recently.
If a seller compares their investment property to a retail property that a homeowner would buy, it sets up false expectations of value and potential profit from the sale.
The best indicator of what a buyer will purchase is exactly what they’ve taken their hard-earned money out of their pockets and actually paid for in the past few months.
Next, setting the price just below the market is key for inciting the other Investor Sharks to begin biting!
If a seller sets the price too high, they’re trying to PULL the market up to their expectations. Very difficult.
If you set the price just a bit below the average sales price, the market has a tendency to PUSH the price higher naturally through multiple offers.
This requires the best and most accurate data, so you’ll need skilled help to truly compare apples to apples (investment rental property to investment rental property) not apples to oranges (investment property to retail property).
This strategy also requires very skilled handling of the offers, negotiations, and managing the buyers.
But, with the right pricing, a savvy investor can create a market frenzy for their properties– instead of a market failure.
If you need help evaluating, pricing, and selling your Metro Detroit investment properties, you can reach us via email at: email@example.com or by calling (248) 905-1531.
Good Luck and Happy Investing!!