Planning to Refinance? Think About Your MLS Price Before You Pull the Listing

Watch the quick video above. I explain a real situation that recently happened with one of our clients and a lesson that changed the way I think we should handle properties that start as flips but eventually move into a DSCR refinance.

This is something investors should think about before simply removing a property from the MLS and applying for a refinance.

Here’s What Happened

One of our clients purchased a property with the intention of flipping it.

They renovated the property, put it on the market at their intended retail price, and waited for a buyer.

It didn’t sell.

Like most investors would do, they started reducing the price.

Maybe $10,000 here. Another reduction there. You’re trying to create activity and eventually find the number that gets someone to make an offer.

But the property still didn’t sell.

Fortunately, this wasn’t a disaster.

We had stress-tested the property before the purchase.

We already knew there was another exit strategy: rent the property and refinance it using a DSCR loan.

So instead of continuing to chase buyers down on price, the decision was made to hold the property.

Then the Appraisal Came Back Higher

Here’s where it got interesting.

The appraisal supported a value higher than the property’s most recent MLS asking price.

Normally, you’d think that’s great news.

But the lender looked at the MLS history and basically asked:

If the property is worth this much, why were you recently willing to sell it for less?

That’s a fair question.

And it taught me something.

The lower MLS price wasn’t necessarily our opinion of the property’s true retail value.

It represented our motivation to sell at that particular moment.

Those are two completely different things.

Maybe there weren’t enough buyers that month.

Maybe interest rates were hurting demand.

Maybe it was during the holidays.

Maybe the property had simply been sitting too long and we were willing to take less to move on.

But once we’ve decided we’re no longer motivated sellers because we’re keeping the property, why should we continue advertising that discounted price?

What I Would Do Differently Today

This is the process I would use moving forward.

Let’s say we originally believe a renovated property should retail for $350,000.

We list it at $350,000.

It doesn’t sell.

We reduce it to $340,000.

Then $325,000.

Then maybe $310,000.

At some point we hit the wall and say:

We’re not giving this property away. The rental numbers work. We’re going to keep it and refinance it.

At that point, I would bring the MLS asking price back to the original intended retail price—$350,000 in this example—assuming that price is still supported by the market.

Why?

Because we’re no longer trying to communicate urgency.

We’re no longer saying, “What price will get somebody to buy this property this week?”

Our position has changed.

We’re saying:

“If someone wants to buy it, this is the price that makes us willing to sell. Otherwise, we’re perfectly comfortable keeping it.”

Then I would begin working on the DSCR refinance.

If the lender tells us that the property must be removed from the MLS before closing or underwriting, then we remove it.

But before removing it, I want the listing price to reflect our actual current selling position—not the lowest price we temporarily reached while aggressively trying to generate a sale.

Asking Price and Value Are Not Always the Same Thing

This is an important distinction.

An MLS asking price isn’t automatically the value of a property.

A seller can be willing to accept less because they want liquidity.

Another seller may ask more because they have absolutely no urgency to sell.

That’s why appraisers look at comparable sales, property condition, location, market activity and other factors when developing an opinion of value.

But your MLS history is still information that a lender or appraiser may consider.

So don’t ignore the story your listing is telling.

My New Rule for Flip-to-Rental Properties

If the flip isn’t selling and we’ve decided to execute our backup rental strategy, I don’t want to keep chasing the sales price down.

Stop. Reset. Change strategies.

If the property is worth keeping, establish the price at which you would genuinely be willing to sell it today.

Then start working on the rental and refinance strategy.

If the lender requires the listing to be withdrawn, follow the lender’s instructions.

But don’t unnecessarily leave your last MLS price communicating:

“I was willing to sell this property for $310,000.”

when your current position is:

“I’m keeping the property unless someone is willing to pay $350,000.”

That’s an important difference.

This Is Why Stress-Testing Before You Buy Matters

There’s a bigger lesson here too.

We weren’t panicking when the property didn’t sell because the flip was never the only possible exit.

Before buying an investment property, we want to understand:

Can we flip it?

Can we rent it?

What happens if it takes six months to sell?

Does the property work with a DSCR loan?

Can the rent support the debt?

How much money stays in the deal after refinancing?

If you answer those questions before you buy, you’re in a much stronger position when Plan A doesn’t happen.

You don’t have to keep cutting the price because you’re desperate to get out.

You have options.

The Takeaway

This experience gave me a new perspective.

If you’re transitioning from selling a flip to keeping and refinancing the property, don’t automatically leave the MLS at the lowest price you reached while trying to force a sale.

If your original retail price remains reasonably supported by the market and that is now the price at which you would actually be willing to sell, consider restoring the listing to that price while you begin the refinance process.

If the lender requires the property to come off the MLS, follow their requirements and remove it.

The important thing is to understand that your MLS history can become part of the story during underwriting.

Don’t let temporary urgency during a slow sales period unnecessarily work against a completely different long-term strategy.

Sometimes the smartest move isn’t another price reduction. It’s realizing you’re no longer a motivated seller.

Watch the short video at the top of this article for the real-world example that taught us this lesson.

Related Reading

Continue learning with these Graystone resources:

External Resource

For additional information about appraisal requirements, property listing history, and how appraisers analyze properties, visit Fannie Mae’s Selling Guide:

https://guide-selling.fanniemae.com/sel/b4-1.3-02/subject-and-contract-sections-appraisal-report

Important: This is an investment strategy discussion, not advice to misrepresent a property’s value or conceal information from a lender or appraiser. Any MLS asking price should represent a genuine price at which the owner is willing to sell and should be reasonably supportable. Always disclose information requested by the lender or appraiser and follow the lender’s requirements.

Book an Expert

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Jorge Vazquez – CEO & Investment Strategist at Graystone. Let’s make your portfolio stronger, steadier, and more profitable.

Deals? Book with Cody.

Meet Cody Bergstrom, Your Expert in Finding Deals Let’s find an off-market deal that actually works for you.

Need financing? Book with Lisa.

Meet Lisa Kaye Price, the LendingGig Top ML Let’s figure out the smartest way to fund your next deal.

Looking for PM? Book with Jay

Jay Michalec – COO & Property Management Expert at Graystone. Let’s make your rentals easier, calmer, and more profitable.

Book an Expert

New investor? Start with Jorge.

Jorge Vazquez – CEO & Investment Strategist at Graystone. Let’s make your portfolio stronger, steadier, and more profitable.

Deals? Book with Cody.

Meet Cody Bergstrom, Your Expert in Finding Deals Let’s find an off-market deal that actually works for you.

Need financing? Book with Lisa.

Meet Lisa Kaye Price, the LendingGig Top ML Let’s figure out the smartest way to fund your next deal.

Looking for PM? Book with Jay

Jay Michalec – COO & Property Management Expert at Graystone. Let’s make your rentals easier, calmer, and more profitable.

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