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your real estate advice please
Old 01-21-2008, 12:38 AM   #1
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your real estate advice please

just call me mary, quite the contrarian, as i am considering raising the price of the inherited house as south florida continues to fall. after cutting my price by $350k, not even a low ball offer in 365 days so why not not sell at a higher price. where would i put the money now anyway? the stock market? i don't know witch is scarier.

i really do want to sell but it just isn't happening so here's the deal and then you tell me what to do:

location location location: high end area of high end town (so not my style). parents paid $165k in 1980 (possibly $10k too much based on other sales i've researched, but mom just had to have that screened-in waterfall & pond by the pool.) at that time, though this area was built out, there were still vacant waterfront lots within this city while now there are none.

city & area income & character:
city medium income $60k
immediate area medium income $90-$120k
immediate area income $250-500k between 5-9%
immediate area income over $500k between 6-9%
number of brand name neighbors (names you would know), at least three that i know of. in the town? innumerable.
number of sex offenders in the zip code: 4
quiet street in quiet area with easy access to shopping, landscaped highway through town and to interstate.
protected moorage & very easy walk to beach and excellent park
extremely well funded town forever upgrading

city and area house prices:
city (houses & condo) medium $433,500 in 2005 up from $230,200 in 2000
target zip code (following information on deepwater houses from mls):
jan 2006: 40 houses for sale average $5,780,800 medium $4,800,000
feb 2007: 22 houses for sale average $5,326,400 medium $4,950,000
jan 2008: 36 houses for sale average $4,615,300 medium $2,900,000**
(**though house prices have dropped considerably, i imagine most of that last figure is mostly due to the mix of what's for sale.)

within this zip code, inherited house is in the 2nd best area. the better area houses for sale start at $2.9mm & go up to $20mm. the lesser area houses now asking $895k and go up to $5mm.

within our association, the last house on a dry lot sold for over $500k. there is only one other deepwater house for sale near my price then the price jumps to $1.25mm and north. i've had mine priced at $947,500 (the lowest priced house in our association), right about where the county has me taxed and at hearing they refused to lower their appraisal. the other house at my level is asking over $1mm yet has 20 ft less seawall, accomodates only a very small boat due to that & their property's configuration and looks out onto a four-story condominium building. they did however add a new roof and redid the kitchen which i think was a waste as all the older houses in this association are considered tear-downs. while i have no intention of doing likewise, i do need to keep their improvements in mind in considering my price.

the last house to sell in our association has 20 feet more seawall than mine, went for $950k in two weeks this past summer when the owner found out he had only months to live. with no heirs he just wanted to spend his cash. that house is now back on the market asking $1,250,000.

an identical house on an identical property as mine two houses down sold late 2006 for $1.35mm. since torn down, the replacement is pictured below.

i've examined sales histories of some neighbors' houses to get an idea of what sort of compounded interest might be expected over the years and these figures follow (approximated):

1978 $110k to 2004 $775k (7.8%) to 2005 $1mm (35%) avg over 27 years 8.7% (this corner house was then torn down & rebuilt as shown below).

1972 $55k to 1977 $85k (9%) to 1992 $260k (8%) avg over 20 years 8%.

1983 $190k to 1986 $244k (9%) to 1992 $300k (4%) to 2005 $1.2mm (11.5%) avg over 22 years 8.75%

1988 $244k to 1999 $550k (7.6%)

1984 $230k to 2000 $590k (6%)

1977 $125k to 1989 $390k (10%)

1969 $57k to 1971 70k (11%) to 2007 $950k (7.5%) avg 7.7% over 38 years (this is our neighbor who found out he has cancer per above).

1979 $155k to 1987 $277k (7.7%) to 1997 $400k (4%) to 2006 $1.57mm (16%) avg 9% over 27 years.

1984 $225k to 1987 $247,500 (3%) to 1998 $700k (10%) to 2003 $1.4mm (15%) to 2005 $1.56mm (5.5%) avg over 21 years 9.6%

now for the pretty pictures to get an idea of the neighborhood and then you can tell me what i'm supposed to do with all this. how would you price this property? would you try to sell now or wait another year or more? thanx.

here is the front of my teardown


interior shot of kitchen


dock & "backyard"


new house being built on identical property per above (guessing 6k sq ft)


corner house per above (is about 7500 sq ft replete with every option)
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Old 01-21-2008, 01:05 AM   #2
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Nice area!

My realtor friend says "never price a house without using good comps. that compare to your house in age, location, ammenities and quality of construction." In other words, don't go by MLS asking prices; only sales prices.

Are other houses in your area selling? Have any other houses in your area sold in the past 4 months? If so, these are the comps. you should be useing to determine your house price.

You can also look at $ per sq. ft. but once you get over 4-5000 sq. ft. these figures don't hold true. At that volume of house you have to consider what it has the others don't to figure the price. For instances...updated kitchen, update bathrooms, new carpet, jetted tub, all season rooms, etc., etc.

You need more information of actual sales and what the house has as compared with yours.

If nothing is selling...raising your price will not help. Lowering your price might. Some markets are just not moving much right now. Patients may be the key. Visit all the other houses in your area and price range that are for sale and see what they have vs your home. Price yours to be just under them and you should eventually attract a sale. Being too high in a down market will get you crossed off too many buyer's lists.

Good luck.
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Old 01-21-2008, 02:05 AM   #3
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It is a fabulous house, though I understand from your prior posts why you want to sell it. Still, for many people I think such a house would be a dream home.

In my opinion it is often difficult for a seller to figure out the right price for his home by himself (even with a message board full of people in other states to help! ). I believe that is because the seller is emotionally involved and doesn't have the experience and broad objectivity that a very good real estate agent can have.

In my opinion, you need to have a top notch seller's agent on your side. Your real estate agent should be a professional who has been doing this full time for at least 15 years in your community, and who sells a lot of houses, and who will work with you to price your house correctly and do what it takes to get it sold.

I guess the point is, you should not HAVE to be consulting a message board to figure out what your house is worth. Your seller's agent should be an expert on real estate in your neighborhood and should be able to (and willing to) tell you what it is worth, should give you comps to look over, and should indicate what he thinks is a good range in which to price it. Your research is important, but mostly to tell if the agent is way off base or knows his stuff. Secondly, your agent should also be advising you on what you need to do in order to help get it sold. Thirdly, he should be knocking himself out to get it sold.

You haven't mentioned your real estate agent in this post, but given what you are asking I think maybe you have the wrong agent or else maybe you have been trying to FSBO in a tough market, and it isn't working. Do you have an agent? Does he/she think it is priced right according to his/her comps, or what?

P.S. - - I would try to sell it now, because you have been putting your desired ER on hold long enough! But that is just my opinion.
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Old 01-21-2008, 04:45 AM   #4
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Quote:
Originally Posted by lazygood4nothinbum View Post
i really do want to sell but it just isn't happening so here's the deal and then you tell me what to do:
I stopped reading when I saw this line. If you are really serious, let me offer my 2 cents. I have successfully bought and sold 6 houses over the years. You should approach this in a business like manner. Although I do know that selling a house can be a very emotional experience.

Suggestions:
1) Call up the 3 best/largest/most successful real estate firms in the area. Lots of advertising, lots of signs in yards, ...etc. are signs of good ones. I personnaly would talk to the owner and ask for his/her best agent
2) interview the 3 agents. Pick the one that you feel comfortable with. You have to trust this person. If you are one that is easily fooled by 'smiling faces', ask someone you trust to be include in on the conversations. Someone with a good internal 'BS' meter. Remember these agent/brokers are really sales people in disguise.
3) Get a formal competitive market analysis from each agent. This will show you what has sold and at what prices recently. It should also give you a recommendation on what price to put your house on the market. This should help take some of the emotion out of the pricing. Be sure you mentioned to the agents that you are interested in a QUICK SALE.
4) hire the agent you want and put the house on the market for 'UNDER' the going sales price of the last similar house sold (say 5%). This will get the attention of the buyers. I have seen this actually start a bidding war amongst 'real buyers'. They (like us) know a bargain when they see it.
5) Offer the agent a quick sale bonus for whoever brings in a bonafide offer which leads to a sale within say 45 to 60 days. Say 1% or $5000 or ?. This will get the attention of the brokers and get them all to focus on your house in the most critical time period (the 1st few months).
6) If you get any 'lookers' and eventually offers, don't start to go back to what I will call LBYM type attitudes. I find that most of us on the board try and get maximum value out of our purchases as well as our assets. Remember, you are in a buyers market (if you can find one) and one of the worse that we've seen in a while.
7) remember that you inherited this property, so, although you don't want to give it away, you should have less emotion invested in it (unless of course it's an old family house). In either case, remember your family has 'made' money on this past investment.
These types of things should give you a fighting chance at 'really' selling your house. Remember:
Quote:
Originally Posted by lazygood4nothinbum View Post
i really do want to sell but it just isn't happening so here's the deal and then you tell me what to do:
Best of luck to you.
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Old 01-21-2008, 07:30 AM   #5
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Originally Posted by Want2retire View Post
It is a fabulous house, though I understand from your prior posts why you want to sell it. Still, for many people I think such a house would be a dream home.

In my opinion it is often difficult for a seller to figure out the right price for his home by himself (even with a message board full of people in other states to help! ). I believe that is because the seller is emotionally involved and doesn't have the experience and broad objectivity that a very good real estate agent can have.

In my opinion, you need to have a top notch seller's agent on your side. Your real estate agent should be a professional who has been doing this full time for at least 15 years in your community, and who sells a lot of houses, and who will work with you to price your house correctly and do what it takes to get it sold.

I guess the point is, you should not HAVE to be consulting a message board to figure out what your house is worth. Your seller's agent should be an expert on real estate in your neighborhood and should be able to (and willing to) tell you what it is worth, should give you comps to look over, and should indicate what he thinks is a good range in which to price it. Your research is important, but mostly to tell if the agent is way off base or knows his stuff. Secondly, your agent should also be advising you on what you need to do in order to help get it sold. Thirdly, he should be knocking himself out to get it sold.

You haven't mentioned your real estate agent in this post, but given what you are asking I think maybe you have the wrong agent or else maybe you have been trying to FSBO in a tough market, and it isn't working. Do you have an agent? Does he/she think it is priced right according to his/her comps, or what?

P.S. - - I would try to sell it now, because you have been putting your desired ER on hold long enough! But that is just my opinion.

As a former realtor, I agree with this advice.
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Old 01-21-2008, 07:59 AM   #6
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Lazy,
I also live on the water in Florida and lately I've seen a lot of action as in drive bys looking at waterfront . It is the peak season so I'd get super aggressive and get it sold . I'd look for an agent that specializes in waterfront and has a lot of european clients .I'd also consider having the house staged .Good Luck .
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Old 01-21-2008, 08:03 AM   #7
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How much is it insured for? *wink, wink*
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Old 01-21-2008, 08:08 AM   #8
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Florida and CA are the centers of the crash - good luck. Lots of good advice here, but in general I don't see why raising the price would make any difference. Sure go ahead if you want.

If you really want out do a fire sale. Erase any ideas in your mind of the worth of the house - they were illusory. Didn't exist, pure fiction never to return in your lifetime. Drop your price by 1/2 and see what happens. It's all free money anyhow - think drama pricing.

A friend made the mistake of thinking that things will - somehow - magically turn around. She kept lowering her price, chasing it down, and finally gave up. If she had dropped her price in one fell swoop early on, she would have probably sold it and made more money then the slow drip ... drip ....

Take it for what it's worth, but you asked.
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Old 01-21-2008, 08:09 AM   #9
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Don't raise the price, you'll just look like a problem seller.
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Old 01-21-2008, 10:22 AM   #10
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Hi Lazy,
Here's what my sister&husband did with their house in Maryland when it did not sell in 2006. They upgraded the kitchen then put it back on the market in the spring. It sold pretty quickly because it was in a desireable area where houses were selling, albeit slowly.

At the risk of offending you (I hope not though!), I will say that your kitchen looks dated. With other newer houses around it for sale, I'll bet that is the problem. In a buyer's market, I'd guess those buyers write it off immediately for that reason.

Good luck!
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Old 01-21-2008, 04:52 PM   #11
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thanx all. i'm having so much trouble sorting this out in my own mind. i'm much better with esoteric issues. hard-fact finance throws me. so i appreciate the input.

reasons i've put this before the forum is that i've found more intelligence here than in many other places, including the real estate market which i find largely full of crap. i'm not just looking at this as a real estate sale but as a place for holding & investing money which seems more the specialty of this group, and less the area of realtors in general. this house is no longer a place for residence and so i am trying to treat it no differently than i would a cd or a stock holding.

my interest is in finding, if possible, the intrinsic value. that is a hard concept for me because i don't find value in lots of things held valuable in the world. gold and diamonds mean nothing to me. i don't like wearing the stuff so it is hard for me to understand why anyone would value them.

people talk about markets falling and so i wonder just how far this house might fall. by my figuring i'm already below what i would think the value should be. and so there is where i hope someone here might enlighten me and maybe offer a reasonable course.

Quote:
Originally Posted by SteveR View Post
My realtor friend says "never price a house without using good comps...Are other houses in your area selling...You can also look at $ per sq. ft. but once you get over 4-5000 sq. ft. these figures don't hold true...You need more information of actual sales and what the house has as compared with yours...If nothing is selling...raising your price will not help. Lowering your price might. Some markets are just not moving much right now. Patients may be the key.
as the three property appraiser's who ganged up on me at the tax adjustment hearing said: a problem with this area is that there are no direct comps. so they appraised me mostly based on similar properties which sold in other areas of town. as our association has historically been considered so-called "prestigious", they figure that for me to lower my price to match the other areas where there are some sales would be considered a distress sale on my part and therefore they would not reduce my taxable value. of course they would not listen to me when i tried to tell them that they are delusionary, that no one is buying prestige these days and that markets are always determined by buyers not sellers.

so i have priced this house in accordance with the prices i find selling in the lesser areas. but though there are few in our area from which to choose, there are many in the other areas and some of them have more seawall, highly valued for waterfront here. so much for prestige. as well, the people who buy in the area better than ours wouldn't even consider my area as the step-up is quite the step-up.

it is very difficult to determine price per sq ft both on a house which is considered a teardown being sold mostly for lot value, also because there are more dry lots which have sold in this zip code than deepwater houses. most of the value of many of these houses are more in the land than in the structures. so you could compare dry old to dry old or dry new to dry new but how do you compare dry new with wet old. to complicate it more, though we've many more wet lots than dry ones in our association, it is all very intermixed within each neighborhood and certainly within each zip code.

you might be spot on about patience. i'm just so confused as to whether or not to even continue trying to sell at this point. especially when i look at the options of where to put the money. maybe my money is simply safer sitting right were it is. i don't know.

Quote:
Originally Posted by Want2retire View Post
It is a fabulous house, though I understand from your prior posts why you want to sell it. Still, for many people I think such a house would be a dream home...In my opinion it is often difficult for a seller to figure out the right price...because the seller is emotionally involved and doesn't have the experience and broad objectivity that a very good real estate agent can have...you need to have a top notch seller's agent on your side...I guess the point is, you should not HAVE to be consulting a message board to figure out what your house is worth...Your seller's agent should be an expert on real estate in your neighborhood and should be able to (and willing to) tell you what it is worth, should give you comps to look over, and should indicate what he thinks is a good range in which to price it. ...P.S. - - I would try to sell it now, because you have been putting your desired ER on hold long enough! But that is just my opinion.
i just fired the real esate agent last night. how's that for a contrarian, right in the middle of tourist season. i am putting both for rent and sale by owner signs on the property and will list with a fsbo broker to stay in realtor.com for now. i'm going to rent cheap enough to just pay the house bills but also to allow for an out in the contract in case the house sells.

i agree with you, this is and has been a great house. it was better before the neighborhood changed so drastically. i've been watching the transformation over the last 10 or so years. at first they looked like the sore thumb but now we are the stubby toe.

i suppose it could sell, not as a teardown, but to someone who can't afford one of the new minimansions but would like to live among them and hold the house themselves for a better market. to that end we are going to spend a few k to spruce the place up.

the only way that i am emotionally attached to this house is that it makes me sad. we had such a great life there but that's all gone. according to houses selling in other areas and to houses priced in my area, i've got it very well priced. i started off priced where the experts told me i should be, which was between the house with 20 ft more and the one with 20 ft less seawall than mine. i have since lowered to $150k under the guy in my association with the lesser property.

most of the people in our association are very monied. there is only one foreclosure asking about $2.5mm which was a builder who went bust. i would imagine that most of the others are under little pressure to sell. i've seen some reduction in prices over the year but no one has reduced anywhere nearly as i.

while i am counting on the sale to help fund my e.r., i'm not really terribly delayed in the process, having been enjoying my laziness for two years already. it does though stop me from spending as much as i would otherwise, because it is easy for me to close my pocket. the only difference really is that i'll do a few weeks vacation instead of a few months. also i could reverse my plan, sell my house now and start vagabonding right away. zillow has mine priced at $335k though it has my neighbor at almost $400k even though my house & property are way nicer. but in this market i think i would be lucky to get $300k. even still, between that and inherited ira & my ira & cash i could still vagabond and let the inherited house sit.

i don't know whether it would be better to have the house sit and see if that market ever climbs again as it is on deepwater in a great area or if i'd be better off selling at a not so good price now and hopefully riding the markets up.

don't hit me, but somehow life was easier when i was working.

Quote:
Originally Posted by megacorp-firee View Post
I stopped reading when I saw this line. If you are really serious, let me offer my 2 cents.
thanx much for great input mega. though while i do want to sell, i also want to travel to other galaxies but you won't see me stepping into a rocket anytime soon. more than wanting to sell i want to make the right decision. i don't want to find myself floating in space without a booster.

i have gone as far as to interview people who have sold similar properties and contacting their realtors. i have contacted & interviewed the known "big hitters." none of them impress me. no offense to any realtor or salesperson on the forum, but none of them convince me that they can do a better job than a monkey with an mls listing. i realize that i am prejudice in that i have never taken to salespeople. when i enter a store, i am their worst nightmare as i have never bought anything that i did not enter the store to buy. ring me up. thank you.

though hard to determine as mentioned above, it seems i am already under the price of the last immediate area sale which was sold in distress and that house is now back on the market asking $300k more than it sold for this past summer. (i realize that is only an asking price.)

the added bonus is interesting but does $5k motivate a realtor any more so than the nearly $30k they'd already be getting? just how greedy are they? i can't wait until i don't have to deal with this again. no idea how you had the nerves to buy and sell so many houses. this is only my second time and it makes me want to never do it again.

Quote:
Originally Posted by Moemg View Post
I've seen a lot of action as in drive bys looking at waterfront . It is the peak season so I'd get super aggressive and get it sold . I'd look for an agent that specializes in waterfront and has a lot of european clients .I'd also consider having the house staged .
as soon as i read that i said to myself, what the hell am i doing taking the house off the market and so i am listing with fsbo agent at least. i have also considered marketing to europe and will look to see if there is an agency so specialized. the staging idea is interesting. will study that further.

Quote:
Originally Posted by Trek View Post
How much is it insured for? *wink, wink*
as most of the value is in the land, you are suggesting an earthquake? doubt i can pull that off. though it sure would be tough to prove fraud if i could.

Quote:
Originally Posted by danm View Post
Drop your price by 1/2 and see what happens. It's all free money anyhow - think drama pricing...Take it for what it's worth, but you asked.
after i offer 38 years of researched appreciation rates for review to try to determine intrinsic value of this property (if there is such a thing--the tax review board certainly thought so), you've determined that value to be 3.8% compounded over 28 years. thank you for your considered opinion.

Quote:
Originally Posted by Martha View Post
Don't raise the price, you'll just look like a problem seller.
maybe so. maybe i should just it off the market. i don't know.

Quote:
Originally Posted by Oldbabe View Post
Hi Lazy,
Here's what my sister&husband did with their house in Maryland when it did not sell in 2006. They upgraded the kitchen then put it back on the market in the spring. It sold pretty quickly because it was in a desireable area where houses were selling, albeit slowly.

At the risk of offending you (I hope not though!), I will say that your kitchen looks dated. With other newer houses around it for sale, I'll bet that is the problem. In a buyer's market, I'd guess those buyers write it off immediately for that reason.

Good luck!
thanx oldbabe but to upgrade we'd have to put on a new roof, update the kitchen which was last done when mom bought, and the bathrooms would not only need updating but we'd have to break through walls to increase their size for today's standards. i just can't see putting $100k into a teardown.
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Old 01-21-2008, 05:16 PM   #12
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Lazy, this is a gracious home in a great location and I totally understand your emotional distress in letting a place full of memories go for a song. I strongly urge you to find a real estate agent with networks abroad, who will market it both in Europe and in Canada. The low US$ is in your favour.
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Old 01-21-2008, 05:19 PM   #13
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Lazy, why don't you contact some of the buyer/builders of the former tear downs in your neighborhood and get their opinion on your place? Probably they will low ball you but you can frame your questions as a "information interview". You don't want them to buy your place, you just want their learned opinion about the market for your house.

Anyway, sorry you're in such a delimma after a very sad event.
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Old 01-21-2008, 05:32 PM   #14
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My 2 cents. Since I just sold a house into this market, and mine was in the #5 worst downdraft area according to a recent study...

#1: There arent many buyers. To catch one, you'll either have to look like a ridiculous bargain basement house (let me emphasize the word 'ridiculous') or you have to have the nicest looking house in the price range they're looking in. The days of marking down a fixer and selling it to a bargain shopper thats all whipped up about grabbing a house before they're all gone (?) is long over.

In short, a house with a bad roof and a kitchen last updated in 1980 will not sell in this market, unless you subtract the cost of all the updates and another 30% of the total update costs and I wouldnt make a bet on that working either. There are a handful of buyers and they've looked at 150 homes, some of which are in great condition and recently updated and those probably arent a lot more expensive than yours.

Yep, buyers are idiots. My last house sale before this one needed a bunch of updating. I marked the price down and figured it'd fly off the market. I pulled very little interest. It sold eventually, but the stupid thing is, had I thrown $25-30k into it, I'd have sold it right away for $50k more.

This most recent sale, I replaced carpet, painted inside and out, and had already updated most of the appliances and whatnot. Sold pretty quick for this market. Several nearly identical houses that needed a bit of work? Those are still for sale even though they've marked down another 30% from where I sold. All the buyers are buying new homes or substantially updated ones with neutral tones.

2. Price. I find a lot of sellers looked at what sold for what 6-12 months ago, marked theirs to that market price or just below, and then dropped a little here and there but never caught up to the sliding window as it dropped. Then a year later they discover that nobody wants to buy a house thats been sitting vacant for a year or more.

I dont think that lowering the price will help you unless its by a lot. I think raising the price is ludicrous.

This formula seems to be repeating itself in my new neighborhood. I see a lot of homes that need work but are more or less fairly priced sitting there for months and months. House comes on thats been fixed up and looks good, priced right, sells fast. House where the seller has given up and dropped their price to below the lowest recent sales price in the last 90 days, that sells right away too.

My opinion is that you need to update the home to the level where someone looking to spend a million bucks is seeing a million dollar home, and then start lowering the price about 5% every 3-4 weeks until it sells. Eventually someone will come in and ask you to knock 5-10% off. Take it.
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Old 01-21-2008, 06:42 PM   #15
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My 2 cents. Since I just sold a house into this market, and mine was in the #5 worst downdraft area according to a recent study...

#1: There arent many buyers. To catch one, you'll either have to look like a ridiculous bargain basement house (let me emphasize the word 'ridiculous') or you have to have the nicest looking house in the price range they're looking in. The days of marking down a fixer and selling it to a bargain shopper thats all whipped up about grabbing a house before they're all gone (?) is long over.

In short, a house with a bad roof and a kitchen last updated in 1980 will not sell in this market, unless you subtract the cost of all the updates and another 30% of the total update costs and I wouldnt make a bet on that working either. There are a handful of buyers and they've looked at 150 homes, some of which are in great condition and recently updated and those probably arent a lot more expensive than yours.

Yep, buyers are idiots. My last house sale before this one needed a bunch of updating. I marked the price down and figured it'd fly off the market. I pulled very little interest. It sold eventually, but the stupid thing is, had I thrown $25-30k into it, I'd have sold it right away for $50k more.

This most recent sale, I replaced carpet, painted inside and out, and had already updated most of the appliances and whatnot. Sold pretty quick for this market. Several nearly identical houses that needed a bit of work? Those are still for sale even though they've marked down another 30% from where I sold. All the buyers are buying new homes or substantially updated ones with neutral tones.

2. Price. I find a lot of sellers looked at what sold for what 6-12 months ago, marked theirs to that market price or just below, and then dropped a little here and there but never caught up to the sliding window as it dropped. Then a year later they discover that nobody wants to buy a house thats been sitting vacant for a year or more.

I dont think that lowering the price will help you unless its by a lot. I think raising the price is ludicrous.

This formula seems to be repeating itself in my new neighborhood. I see a lot of homes that need work but are more or less fairly priced sitting there for months and months. House comes on thats been fixed up and looks good, priced right, sells fast. House where the seller has given up and dropped their price to below the lowest recent sales price in the last 90 days, that sells right away too.

My opinion is that you need to update the home to the level where someone looking to spend a million bucks is seeing a million dollar home, and then start lowering the price about 5% every 3-4 weeks until it sells. Eventually someone will come in and ask you to knock 5-10% off. Take it.

Excellent advice CFB !
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Old 01-21-2008, 07:32 PM   #16
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My opinion is that you need to update the home to the level where someone looking to spend a million bucks is seeing a million dollar home, and then start lowering the price about 5% every 3-4 weeks until it sells. Eventually someone will come in and ask you to knock 5-10% off. Take it.
CFB, alot of good marketing information here to sell a house in a down market. Made me think that LG4NB misread his market as a tear down. But then I looked at his house and the neighborhood houses and agree with him that it is a tear down. His house is probably 1100 to 1800sf with low pitch roof (tar and gravel?). Compare that to the new homes in his neighborhood.

He is not trying to sell a million dollar house but a lot for a multi-million dollar home that will fit in this new neighborhood. I asked in one of his other threads if the house was in too good of condition that people would think it wasteful to tear down. If he decides to rent until a seller can find him I wouldn't put anything in it unless I was sure the increased rent would be recaptured in a year. Think maybe new counter tops and laminate flooring in the kitchen and some paint. $1,200 dollars to get an extra $100 a month rent and a better tenant. Get rid of the stove hood or box it in with drywall!

After seeing the house and the neighborhood I would say the problem is not the price but that the marketing period is just longer for your product and current market conditions. You're asking someone to buy a million dollar lot, pay to demolish the house and build a multi-million dollar home when every one is crying ALL markets are tanking. That buyer is probably out there but it may take awhile for you to find each other. If you don't want to wait for that buyer or do what's necessary to chase him down then to sell you'll end up discounting for the market conditions, for the buyers estimated holding period, and their estimation of the uncertainty of future home values.

I think Oldbabe had a good idea of talking to local teardown builders. You could probably get alot of good information from them and possibly make some kind of deal. They could probably provide you with plans and some marketing materials (pictures of a finished product) of a home that could be built on your lot. Are permits hard to get in your area. If so it might be productive for you start that process and market your lot with the spec home picture and price it at what you want for the land and what a builder says he could build it for. Like CFB said buyers are idiots! Some people need to see the finished product whether it's actually there or not and it's amazing how easy it is to come up with a computer image. So you're not raising your price, you're just marketing a different product. Can you sell a 6,000sf home for $4,000,000? So a million to you for the land and say $250sf for the builder to keep his crew busy and he can still walk with $1.5M profit! I would definitely talk to a builder.

A question about your comps. Are you always comparing tear downs or vacant lots to yours? And as far as dry lots or other neighborhoods as comparisons, if there were sales in the boom years of both products then the percentage difference should stay about the same. So if your NBHD was selling for 20% more then you should sell for 20% more now than the other neighborhoods.
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Old 01-21-2008, 07:45 PM   #17
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CFB, alot of good marketing information here to sell a house in a down market. Made me think that LG4NB misread his market as a tear down.
I thought about addressing that, but decided not to due to already writing too dang much.

If its a tear down, then tear it down and go poke the construction guys who are building the homes on the other lots in the area and see if they want to build another one. Sell them the lot for a better than fair price. Trying to sell it as a teardown/builders lot with the house still on it through the usual realtor/MLS process is probably just not gonna happen in a timely manner.

FWIW, lots are just not selling around here at all. The sellers arent strongly motivated to sell since the taxes are low, maintenance and insurance are nominal and the lot isnt going to get stale sitting there for another 3 years. Buyers are still waiting for a bottom and they're looking at some folks who bought a lot and got half the house built only to see the bottom drop out.
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Old 01-21-2008, 07:59 PM   #18
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Lazy ,

I'd go with fixing it up a little . Decide how much you want to spend then spend it wisely .Watch Design to Sell .They have some great ideas . This at least will bring people in and they can decide whether it is a teardown or a remodel.
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Old 01-21-2008, 09:21 PM   #19
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here i think is my big question. and yes, i know it's market timing. so crystal balls everyone. would you leave the money sitting in this house for another year or would you rather sell now and invest in the market before the recession ends?

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Lazy, this is a gracious home in a great location and I totally understand your emotional distress in letting a place full of memories go for a song. I strongly urge you to find a real estate agent with networks abroad, who will market it both in Europe and in Canada. The low US$ is in your favour.
it isn't that i wouldn't let it go for a song due to any emotional attachment. i just don't want to let it go for much less than it is worth. i've no emotional attachment to my bank account, but i'm not giving that away either. i will check to see if there are agencies specializing in european markets.

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Lazy, why don't you contact some of the buyer/builders of the former tear downs in your neighborhood and get their opinion on your place? Probably they will low ball you but you can frame your questions as a "information interview". You don't want them to buy your place, you just want their learned opinion about the market for your house.
ya, a low low ball is all a builder would do these days. can they even get money to build now? i would think they would be trying to unload any of their inventory at this point. would be curious to see what they say though. thanx for the idea, oldbabe.

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the days of marking down a fixer and selling it to a bargain shopper thats all whipped up about grabbing a house before they're all gone (?) is long over....In short, a house with a bad roof and a kitchen last updated in 1980 will not sell in this market, unless you subtract the cost of all the updates and another 30% of the total update costs and I wouldnt make a bet on that working either....Yep, buyers are idiots...Several nearly identical houses that needed a bit of work? Those are still for sale even though they've marked down another 30% from where I sold...Price. I find a lot of sellers looked at what sold for what 6-12 months ago, marked theirs to that market price or just below, and then dropped a little here and there but never caught up to the sliding window as it dropped. I dont think that lowering the price will help you unless its by a lot. I think raising the price is ludicrous...My opinion is that you need to update the home to the level where someone looking to spend a million bucks is seeing a million dollar home, and then start lowering the price about 5% every 3-4 weeks until it sells. Eventually someone will come in and ask you to knock 5-10% off. Take it.
good input, thanx fuzzy. we actually had not been selling the house as a fixer upper but we didn't fixer up ourselves either. we thought it would sell as a teardown as almost every house in this association which has sold in the last 10 years has been torn down. one of the "power" realtors i had over a few weeks ago told me that this is not necessarily a teardown in this market. so while i can see sprucing the place up, it is hard to convince myself to invest very much.

the roof is in perfectly good-enough shape, it is the original cement tile roof from the 1960s. we just had it pressure cleaned this week. the only updating would be maybe a barrel tile but that's $50k easy. seems a shame to spend that and then it could sell to someone who might just knock it down.

as i mentioned above, i am priced $150k under a lesser comp which has been updated. and actually i'm considerably lower priced considering our property is so much better than theirs. "in the day" we would have gotten maybe $200k more than that house. of course this day is not that day.

it's hard for me to think of buyers as idiots because i know how careful a shopper i am and i would think that at this price level the buyers would be pretty sophisticated. but just maybe some red mulch might sell it.

as to pricing, far from being behind the dropping stone, i have been careful to keep ahead of the fall, dropping my price consistantly over the last year. my sil thinks those on the sidelines are just waiting to see how low we'll go. she might be right. i don't know. that's why i looked at past appreciation rates to try to get an idea of "true" value if there is such a thing or at least of the minimal value i should consider for selling purposes.

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But then I looked at his house and the neighborhood houses and agree with him that it is a tear down. His house is probably 1100 to 1800sf with low pitch roof (tar and gravel?)....He is not trying to sell a million dollar house but a lot for a multi-million dollar home that will fit in this new neighborhood. I asked in one of his other threads if the house was in too good of condition that people would think it wasteful to tear down. If he decides to rent until a seller can find him I wouldn't put anything in it unless I was sure the increased rent would be recaptured in a year. Think maybe new counter tops and laminate flooring in the kitchen and some paint. $1,200 dollars to get an extra $100 a month rent and a better tenant. Get rid of the stove hood or box it in with drywall!...After seeing the house and the neighborhood I would say the problem is not the price but that the marketing period is just longer for your product and current market conditions..Some people need to see the finished product...A question about your comps. Are you always comparing tear downs or vacant lots to yours?
the house is 2624 square feet with 1840 under air. there are two sections of tar & gravel but most of the roof is concrete tiles. it is a solid cbs structure built on a piling foundation. with a huge patio out back, pool and pond.

the new houses start at about $2.3mm & go up to maybe $10mm or more depending on sq ftg, goodies, lot size and lineal ft of seawall as well as view. the town is very pro-development. no problem permitting; they will be glad to take your money.

hey, hands off the stove hood, that is where i get emotional. that's where my mother never cooked. it is a copper hood original to the house. for a renter i don't think i would change much at all. rents are so low now and an extra $100/month won't make much of a difference overall.

i'll investigate but off hand not sure that having plans for a house would do much. the new houses are all by individual architects, most local. i know if i was spending a few million on a new house i'd want it just so but i guess there are those who buy packages. i only wear t-shirts but i never buy off the rack. (i have the best t-shirts.)

as to comps, yes. that is what makes the comps so difficult and why i have to go out of my area to find them. also why the county went out of the area to get theirs to tax me. no sales, no comps.

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If its a tear down, then tear it down and go poke the construction guys who are building the homes on the other lots in the area and see if they want to build another one.
i don't want to tear it down because i feel that would reduce potential buyers, especially someone who might need to finance. i think they'd have an easier time getting a mortgage if the bank saw a house there. also it could sell to someone who might want to live there. i think it is a teardown, it would have been considered a teardown over the last decade. in the neighborhood it sure looks like a teardown. i just don't know if the market sees a duck. and some realtors were surprised upon seeing the house that i described as a teardown because they thought it could sell as is to someone who might want to live there.

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I'd go with fixing it up a little . Decide how much you want to spend then spend it wisely...This at least will bring people in and they can decide whether it is a teardown or a remodel.
that might be the way i'm heading.
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Old 01-21-2008, 09:43 PM   #20
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If I may be succinct and hopefully not offending, it seems you arent sure what you're selling, exactly. Which means you arent selling it as effectively as you could be, and that buyers arent sure what they might be getting when they look at it in the listings or in person.

The element of surprise in real estate is usually not a positive thing.

And in this market you better know exactly what you're selling, be optimized for that sell, and have a buyer know what they're looking at when they see it, see what they expect, and like it compared to other stuff thats similar.

By the way, this oughta make you laugh per your mulch comment. I went up to my old house for sale and decided before I left I'd go get a heap of red mulch and remulch around the shrubs next to the front door (what the buyers would be looking around at while waiting for the agent to fish the key out of the lockbox), and lay some around the rear patio to make it pop a little bit more when you stepped out there.

I got the offer the next day.
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