Real estate advice

[JB2033]

Need some advice.

Here are the specifics:
I have 2 houses one my primary and one that we used to live in that we are trying to sell.

- We moved from the one for sale when we bought this one, which was a foreclosure.

- The one for sale has been for sale for about 9 months with only one offer (looking back I should have taken this offer).

- I have had a realtor since January, and her contract is up July 31st. Before I got her I tried to sell it myself. I am thinking about trying to sell it myself again, but this time take her commision out of the price.

- The house is currently listed at 134,500. I owe roughly 103,800 on it.

- My payment and bills (electricity, water, and lawn cutting) is roughly 1,000.00 a month. The 2 houses are the only debts we have, and are able to still live comfortably. However; we are not being able to save the way I want to get to FIRE.

- My questions are once contract is up with realtor should I try to sell myself. Should I look for another relator. This one is not aggresive enough in this market. Should I not erase my paper equity, and ride out the market? Should I lowball the price to get rid off it?

Additionally, I do not want to rent the old house. To much risk at my stage. Also, I am in TN, so market is not a complete disaster like some other areas.

- Thanks for any advice or suggestions.

 

[jIMOh]

You know better than any advice on the board.

You have 31k in paper equity... if that disappears would you be "set back" from FIRE?

What is worth more
31k in paper equity in say about 5-12 months (when you sell its no longer paper equity)
or $12,000 this year in payments on that house?

Your timeframe to sell and break even in that regard (relatively simplistic) is about 31 months, and you have already had 9 of those months.

 

[Purron]

Unless you have a lot of experience, I would be reluctant to go the "sell it yourself" route in this market. I would, however, look for another agent. Not to soon to start interviewing them now since the current contract will be up very soon.

BTW, DH and I also have two homes right now. We rented one for over 10 years and are more than ready to get out of the landlord business. We are fixing up both places and will be looking to sell one within the next year. We live in the DC suburbs, which like TN, hasn't been hit as hard as some areas. Even so, we expect to use a real estate agent to help us.

Please keep us posted. I'll be interested in hearing how things work out for you.

 

[BigNick]

See if you can get a contract with the agent whereby you will pay her 25c on every dollar she gets above 125,000.

 

[MasterBlaster]

A few thoughts:

When houses are listed as For Sale by Owner it is really hard to get any buyer traffic through the house. And those that do come through want a real bargain. There may not be any real savings there.

Houses get stale if they aren't priced right. If they are overpriced then the agents know that and quit showing it. So ask yourself and your agent if your price is realistic.

If the house is priced right, perhaps the best thing you could do is to increase the buyers agent commission to incentivize buyers agents to show and sell your house.

- My two cents...

 

[HornedToad10]

You're bleeding a 1000 a month and it's been listed for 9 months. I'd drop the price to $110k-115 and get it sold. If it's a reasonable enough price you might get bids over asking if it's actually worth more. If not the bleeding is over. What did you first have it listed for 9 months ago? I'm assuming you dropped the price since then?

 

[FANOFJESUS]

Agree drop the price to 110k-115k. It is costing you 12k a year to keep it.

 

[Texas Proud]

My old house was on the market for one year from us moving to our new one...

At first, I was paying to get it fixed... but that draged on for longer than I wanted... then listed it with the agent who we used to buy our new house... nothing happened for a long time... got one offer the day before Christmas... but was not told about it for a few days... could not get with anybody etc... so it fell through... Also, my agent was a partner of the agency so she tended to sell more high end houses... so was not as interested in doing anything on mine..

Listed it with another agent after the first... she was a lot more aggressive.. wanted me to do this and that... make it look 'better'... also, dropped the price (for info.. I had it priced at $128K which was a resonable price compared to other smaller house around. I did drop it to $118K and sold for a net of $115K. I say 'net' because it was $120K, but I put $5K toward closing costs).




SOOOO... look for an agent who is more aggressive in selling... who does so in the price range you are trying to sell.... also, drop the price if needed.. and since this is a buyer's market... take any offer that is reasonable... another might not be coming for awhile...

 

[NeverBored]

If it hasn't sold in 9 months, it's priced too high. A good realtor will tell you that. If a house is listed in the MLS, it's price, price, price that sells it, not marketing by the realtor.

 

[Lusitan]

What is the history of the list price over the past 9 months? i.e. Has it been sitting at $134,500 for many months or is that a recent price change? How long ago did that one offer come in, and what was the offer price?

Hard to say what the best course of action is without much local knowledge, but the above questions are important pieces of information, I think.

If the price has recently been adjusted to $134,500 you might want to wait a bit, but if it's been sitting there for a long time, I'd say time to adjust the price.

What does your real estate agent think? Of course a higher price = higher commission, but if the place is not sold there is no commission at all, so one would think an agent would try to give a realistic perspective in price.

 

[Westernskies]

New Realtor
New Price ($119,950..)
New MLS Listing with new pictures and description

 

[tryan]

you neglected to say what the last comparible sale was in your area. I'ld drop the price 3k every month (again, not knowing what comps exist) until it sells.

There's a "magic number out there. You're above it.

 

[Texas Proud]

Just to add another note to this discussion....


I have been watching some old episodes of flip this house (or similar type show)...

One of the things that I have seen on the few shows I have watched was 'they are being greedy'... the ones I watch have 3 RE agents come through and give a price... (we are talking Cali here)... as an example... one house the RE agents were between $575K to $600K.... the flipper was asking $695K... and it did not sell...

SOOOO, take the advice of a good RE agent on the price... in fact... interview a few of them and ask all of them what they think you could sell it for... 3 or 4 opinions of a professional should give you a good range.. if you want to sell it fast, put it at the lower end...

 

[W2R]

Get another realtor, a good, experienced, full time realtor, and lower the price drastically. You need to get this sold pronto in a tough market, so IMO you should forget the FSBO idea.

 

[oilspill]

You can sell it yourself. In this world people will try to tell you that you can't or shouldn't do a lot of things yourself. That's nonsense. I wen to the bathroom by myself this morning and was so glad I did it.

Set a fair price. Then every month or half month reduce it by X amount (say $1k) until it sells.

 

[NW Landlady]

I have sold several houses myself & I am currently selling some apartment buildings w/out a realtor.....

In your area there are probably some outfits that will list your house for a small fee plus you give the buyers agent commission. (some states don't allow this though...so check it out.) This will save you a bit of realtor cost & give you the traffic you need & a realtor lock box on the door and a realtor hang sign & MLS listing. You will save the selling agent commission. Even using this method, I have often sold the houses w/out a buyers agent.

Lot of good advice on this thread...make up some of your own pretty flyers. Hold an open house or 2 & put ads in the paper. Even in a down market this will work & save you at least the selling realtor commission. Get market analysis on comparables & discount your sale price to move it fast....at least discount by selling agent commission if you sell on your own.

 

[calmloki]

Curious - did you use loopnet and/or Craigslist? Carrying paper? Considering putting an old 7 unit out on the market (again) and like to hear what works.

 

[NW Landlady]

Curious - did you use loopnet and/or Craigslist? Carrying paper? Considering putting an old 7 unit out on the market (again) and like to hear what works.

Calmloki, on the apt bldgs, actually I got very very lucky!

It is still not final yet, but I had a young new investor who kept bugging me to sell one of the bldgs that was next to theirs & also indicated an interest in owner contract sales. I thought I might sell them the ones next to their bldg, but actually they want everything I am interested in selling....all 3 complexes!! I had 2 CMAs done & the prices work for me and the buyer....so it will be a good deal all around. I am going owner contract financing. I am paying an attorney to review and create documents for the loan agreement, P & S, etc.

The Commerical Broker who provided CMAs indicated that they used Loopnet a lot. I don't have a lot of faith in Craigslist for something like this, but sometimes the newspaper works also. I know that I purchased many of my rental properties off of newspaper ads before the internet exploded on the scene.

Not sure if this will help in your situation, but it seems that multifamily sales are hotter right now than residential real estate. One realtor said that in todays economy, peeps don't quite know a safe place to put their money, so this is one of the safer investments. Also, banks require 40% DOWN on multis with loans under $1mm, so owner contract terms are more attractive even with 25% down. YMMV

 

[Buckeye]

When we sold our house ourselves, the first thing we did was get a professional appraisal done. You never have to show it to anyone but it will provide at least a ballpark figure of what your house is currently worth in your local market. If you like the number you see, you can throw the appraisal on the kitchen counter for buyers to see. If you don't like the number you see, it still tells you what mortgage a buyer will be able to get. No point in holding out for a price for which a buyer cannot get financing.

Another place to go for a quick check of market value is www.zillow.com.

 

[srlimoges]

Realtor seller commissions are typically low, under 2%. IMO the risk of not selling because of sale by owner are greater than the 2% commission.

 

[Lusitan]

When we sold our house ourselves, the first thing we did was get a professional appraisal done.

Just curious - who did you use for the appraisal? I know banks do an appraisal pre-mortgage, but if you're just Joe Homeowner who would you call for something like that?

 

[Coderguy]

Another place to go for a quick check of market value is www.zillow.com.

What a fantastic link! Thank you!

As a young potential home buyer. It's very odd looking at homes right now. I remember when my parents bought their home; they made a list of what was available; looked at them all, and chose one. My DF and I can drive around a neighborhood all day seeing new houses; meeting realtors. There are 100's of homes in our price range and in good neighborhoods. I say this just to communicate the buyers side.

You can sell the home yourself; but you won't have the benefit of a realtor website; neutral open houses (it's uncomfortable being shown the house by the owner; they are obviously partial), etc.

What would make us buy a home from the owner?
- Great Price
- Lots of paperwork to see (same as with a realtor)
- Well organized open house(s)
- Clearly marked property lines
- Flexibility
- Some type of visibility, either via a website or ? (we have to know the house is for sale without directly driving by it)

 

[Buckeye]

[C[/CODE]

You can sell the home yourself; but you won't have the benefit of a realtor website

We had our own website with our street address as the website address which we listed in our weekly newspaper ads and on our professional looking signage. We posted a virtual tour (done by a pro), tons of photos, and a spreadsheet showing total cost of ownership (utilities, taxes, insurance) on the website. We paid ($500) to be listed on Realtor.com, had open houses every weekend and would show the home with no notice.

All this stuff was helpful, but ultimately because were were realistic about what the house was worth, i.e. whatever someone will pay for it, we sold the house in about 4 months.

I used Google to start the search for a local appraiser that I felt comfortable with.

 

[Gardener]

When everything goes smoothly you don't need a realtor, however... I've bought 3 houses, sold 2. Nothing smooth, simple or on schedule in any of my experiences. The first was a true nightmare - thank god for my realtor. Went into contract, then legal issues w/ the title. Took 8 months to close (seller had to do some major legal work.) This in an on-fire market - the value of the house went up by at least $50,000 in those 8 months - the whole time the seller was trying to get out of the contract so she could list it at a higher price. But I am a pitbull at heart, and I had my teeth sunk into it. That poor realtor probably cleared $0.10 an hour when that deal was done.
So what is your karma like? I have good "money making" karma, but man do I have bad "easy buying and selling" karma.
Gardener