Written by Niko Raptis, Broker, RSIR
In real estate, the higher the listing price, the smaller the buying pool. This pool becomes even smaller when the home is completely unfinished. The level of selling difficulty becomes extreme.
With laser focus, innovation, and a considerable amount of patience, I recently sold a multimillion-dollar, unfinished listing. It wasn’t easy, but my team and I developed a strategy that produced results for my client in just six months. Read on about the pros and cons of taking on an unfinished listing, and my tips for establishing a successful sales strategy.
Pros
- Uniqueness: The buyer has the opportunity to create a one-of-a-kind home.
- Customization: They can change every little detail to fit their lifestyle and taste.
- Control cost buildout: Choosing the builder, workload, and pace of a project eliminates extra profits a builder could be gaining.
Cons
- Imaginary: Few people can envision a space with furnishings that aren’t there, which means they have a hard time visualizing what their future could look like in the home.
- Presentation: Staging a house for listing is a must. The issue with an unfinished home is there is nothing to stage, which makes it much more difficult to visually entice sellers or host promotional events.
- Price: The higher the price, the smaller the buyer pool. Most high-end home buyers also prefer to purchase turn-key houses.
- Financing: It’s near impossible to get a bank finance for an unfinished house. Private lenders are the only option, but they have much higher interest rates.
- Finished cost: The finished cost is always a major factor in every buyer’s decision. During our listing we had at least four different buyer leads, but they all backed out due to the high cost of finishing construction.
- Mindset: The client who buys a house in this stage needs to have a different mindset than a regular home buyer. You need a person who wants a project and is willing to do what it takes to finish it.
- Time: Many people are deterred by the fact that unfinished homes normally take over a year to complete.
- The unknown factor: People get intimidated by leaping into the unknown, especially if they‘ve never dealt with construction before.
It can be difficult for potential buyers to envision their life in an unfinished home.
Here are a few tips for tackling the massive “cons” list:
Build Relationships
Nothing is more important than a great relationship between you and your buyer. Without it, it’s almost impossible to gain the trust needed to close the sale. Focus on building trust right away if you want to be successful.
Take Control
When it comes to unique listings, you need to create a detailed marketing plan. Make a list of the major items that may deter buyers and find solutions for each one.
For example, we had a great view-property with two major deterrents:
- The house wasn’t finished
- Landscape was non-existent.
Since finishing the house would require unreasonable resources, we decided to create a VR rendering of what the finished product might look like.
The next goal was to improve the property’s curb appeal. I persuaded my sellers to invest in a minimal amount of landscaping to improve the allure of the home. The outcome not only improved the property’s curb appeal, but it also became a major focal point in digital marketing/photography.
Innovation/Creativity
If you have an unfinished property to sell, it is essential that you get creative when introducing the property to the public. To grab the attention of potential buyer, I created a film to mirror the lifestyle of future owners. Since the property sits up high with stunning views of Puget Sound, I felt a helicopter landing would spotlight the expansive property.
Using the luxury lifestyle scenario as a central marketing angle, we created a film blending the actual property footage with VR renderings. The outcome was unparalleled!
Marketing
Using your lifestyle film—or other amazing content—to launch a viral marketing campaign. Boost your content on social media with paid ads and organic posts.
Gulf Sotheby’s used our project to highlight the lifestyle between downtown and urban living and Sotheby’s International Realty used our video on their Youtube channel.
Events: To promote the listing, try hosting private showings with food, wine, and live music. Partner with a local furniture store, and partially stage the home for the events.
Following the launch of the listing, we hosted a lifestyle event at the home with food, furniture and entertainment.
Helping with Numbers: Have builders give estimates on the cost to finish the home and provide these estimates to potential buyers. It may also prove beneficial to bring a builder into showings to introduce the home—and its potential—to buyers.
Financing: Utilizing bank financing on an unfinished property is nearly impossible, so I recommend bringing in a private lender in case the buyer needs one.
Using a targeted strategy and the above, we SOLD our listing after just six months on the market. If you’re willing to put in the hard work, you can sell your unfinished listing too!