I was recently at a social occasion listening to someone I don’t know well bemoan the difficulties of selling their unique house so they could make a necessary relocation. This couple had spent their dozen years in this house customizing it for a particular pastime they both enjoy.

 “I know we probably won’t get back the $6,000 we spent building out the special room we use most for our hobby,” said the wife, trying hard to be realistic. Note she said “probably” – she actually is hoping someone will add that $6,000 to what they will pay for this house.

Two real estate professionals at the party were also trying to be realistic in a friendly way. “Well, you might get a little more than the average price because of the great land parcel it’s on.”

The lady was offended at the suggestion of selling at market price! “We’ve done so much to it! We aren’t selling for less than it’s worth!” Needless to say that was met by a profound silence among the polite professionals, who were wondering “worth to who?”.

So, what is it worth? For the vast majority of flip projects, the ARV is the average value of the average home sold most often in the last 6 to 12 months. Simply put, that is what people buy most often, and that will be your asking price for your flip project to be sure it sells promptly once you’ve fixed it to top-of-market condition.

Listening to realtors reassuring a seller/homeowner with a somewhat unique listing like this lady’s – saying things such as “you’ll get your price in time” “just be patient and a buyer will come along that loves it” – is enough to make a flipper bang their head on the desk. You know your fix & flip property is costing you a pretty penny every month it sits on the market!

Don’t go into a project expecting that special and unique features will bring more than the average price in the market if those extras aren’t that useful to homebuyers in that price range. Regardless of the seller’s emotion about the specialness, it is hard to find a buyer who is a collector, model railroad enthusiast, recording artist, dog trainer, etc. They may be out there, they might love and want the house … but people dedicated to a particular special interest are a small, small market indeed!

The core principal behind the worth of any item in any market is simple: It’s worth what someone is willing to pay for it. Buyers don’t pay for extras they don’t really need. What else could they buy for the same asking price – or less? 

When making a purchase offer for a flip project, you may need to explain how to understand “what it’s worth” to a seller who has invested in adding special features to their property. That is, features that are special to them … but not to the next homeowner.

What’s the most unique special feature you’ve seen added to a property for sale in your area?

Want to earn money with little or no investment of your own? Keep an eye out for my upcoming ebook explaining wholesaling and how to make it work for you!