your real estate advice please

[retiringby50]

No real advice, except that I think you should use an experienced realtor to get the job done and over with. I read this article in our local paper this weekend and it talks a little about similar stuff: Fast home sales require attention to pricing and promotion. Pretty quick read.

Here's my story (sorry so long): My dad recently died and left me with a home in San Francisco. I never lived in this house, but my mom had passed away w/i 6 months after they moved here, and I visited my dad almost every week for almost 14 years in this house before he passed away in his bedroom. Some, but not a lot of, sentimental value.

I didn't want to be a landlord in SF (there are about a thousand reason not to), so I had always intended to sell. By the time we got everyone living in the home to leave (caregivers who needed a little more time, tenants who were reluctant to leave, etc.), it was July 2007, and the market was starting to go south (slower for this area's homes to react to the market). I figured if I were lucky, we could put in about $15K to fix the dry rot and sell it for $750K, or we could remodel it and sell it for $850K - I could also learn something from the remodeling experience. My realtor is a friend and also friends with a contractor who is very good, so they worked on getting my house into "modern" condition. About $75K later, we had a very nice house where everything that needed to be fixed or changed was taken care of: new kitchen, new bathrooms, new division that gave it another bedroom, new appliances, new paint inside and out, new fixtures. By now, it was already November, so prices have dropped even more. We decided to price it at $829K, put it on the market for two Sundays, and got 1 offer for $795K. I took it!

I had to take the emotions out and think logically... if I waited, I might get a lower offer or none. It might take the market another 12-18 months to get back to where it was earlier in the year, and I would have lost the opportunity to earn more money. I wasn't willing to wait... and I'm happy I sold. Many many other properties in the area are still just sitting there, so pricing it right and remodeling it right make a difference. Yes, potentially I lost money (or best case scenario, I broke even) on the remodeling based on what I thought I might have been able to sell it for without the big remodeling job, but I think it helped move the property. Paid off the realtor, paid off the government, now my biggest worry is what to do with the profit... it's a nice place to be.

OK, leaving this board to decide how to invest the proceeds today before the market gets better tomorrow... wish I could fortell the future. Oh, here's a warning to everyone... I'm moving money from money market to other mutual funds... everytime I've done this, the market has tanked! So be forewarned!

 

[Texas Proud]

Sales is a simple process. You sell when you have something someone wants and you remove as much of the uncertainty as possible from the transaction. When someone is uncertain about some part of the transaction or lacks satisfactory knowledge about key decision making aspects...they dont buy. Part of that certainty is knowing your product and your buyer, knowing the right prices, and creating a clean value proposition without a lot of unclear bits and pieces floating around.

Sounds to me this is how CFB made all his money....

 

[lazygood4nothinbum]

I see your point, but if you were say a real estate developer, and you had a $1M property that you just completed, as a buisness person, hanging onto the property in a down market as we have is not do-able... So renting it out can be a good idea for you at this time. Good luck.

thanx much mega. though i totally appreciate your advice and will be incorporating it all into my thinking, lets face it, you and i would never do a deal together. this sure would be easier if i was as aggressive as you though. who knows, maybe the turtle will win this one.

No offense, but it seems to me that youre asking for advice but really dont want any.

we don't know each other well enough for you to offend me but thanx for the concern. as to your appraisal of what i have garnered from this discussion, i find little value there, just the facts, no offense. not that i'm interested in doing a complete psychological profile of you, but just from checking a few of your past posts, seems you are merely projecting your own closed-mindedness upon me. but i am not you. and you are not me.

i have submitted for forum review very detailed information precisely so that i can best gain from their financial wisdom. however, i do not feel obligated to submit for your review, in particular, a manifest of any work which might currently be underway based on their suggestions.

just because i argue a point does not mean that i have not heard what the other person says. you might try to keep that in mind the next time you pick a fight with someone in your own personal life. you'll both get more from it.

...Rather than spend a lot on the one selling agent, if you want eyeballs and looks, pay 4%-5% to the buyers agent and have a couple of hundred go-getter sales people who want the commission dragging every single client they get to the house, even if its not really what they asked to see....One of the things I've also done which seems to help is to carefully write my own "Hi, welcome to the house" document.

again, would i be blacklisted if i did a for sale by owner but offered a 5 or 6% commission to the buyer's agent.

very interesting on the welcome document. like that a lot.

in fact, how about you and mega come down, live in the house and sell it for me. you get a free vacation in a fabulous area and i get to watch cartoons all day.

No real advice, except that I think you should use an experienced realtor to get the job done and over with. I read this article in our local paper this weekend and it talks a little about similar stuff: Fast home sales require attention to pricing and promotion. Pretty quick read....Here's my story (sorry so long): My dad recently died and left me with a home in San Francisco. ...leaving this board to decide how to invest the proceeds today before the market gets better tomorrow... wish I could fortell the future. Oh, here's a warning to everyone... I'm moving money from money market to other mutual funds... everytime I've done this, the market has tanked! So be forewarned!

sorry about your dad, retiring, and thanx for your story. my big problem with renovating at the $100k level is that i really have been looking at this as a teardown. but per fuzzy on knowing what i'm selling i will be rethinking all that. also sorry you missed the 2.5 the market rose today. but maybe you will time it just right to tank tomorrow. and that also is my hesitation on rushing this thing.

as to foretelling the future, that's easy. the hard part is picking the right future.

 

[W2R]

hard part is picking the right future.

That is so true, in general and in every way! If we can pick the right future, then all we have to do is get there from where we are.

 

[Moemg]

I was at a party last night and this friend of a friend got telling me her tale of woe .She & her husabnd bought a small house on a canal for $190,000 in 2001 .They put in $50,000 worth of renovations and when real estate was booming they decided to sell and reap the rewards. They put the home up for $690,000. It did not sell but the market was still booming so they decided to buy a cheaper house so they would have somewhere to live when they other house sold .They bought a small house not on the water for $ 325,000(this was when houses were way overpriced ) .Now they have still not sold the waterfront house it is down to 459,000 Plus the other house is now appraising for $100,000 less .So what do they do .they mortgage the waterfront house to the max and give the money to a Broker.At this point I almost spit out my wine . By they way they are both 66 and had to return to work .

 

[cute fuzzy bunny]

Sounds to me this is how CFB made all his money....

I made much of it by removing peoples uncertainty about why they should spend more on things I sold, but I also made a heck of a lot by making people feel less certain about other peoples products...

Thats not about negative selling or bashing the other guy, necessarily...but rather arming your customer with lots of questions that the other guy really doesnt want to answer.

 

[megacorp-firee]

in fact, how about you and mega come down, live in the house and sell it for me. you get a free vacation in a fabulous area and i get to watch cartoons all day.

LG4N, I don't know about that... although I would love a free vacation home, on the water, for a month or so, ... as a matter of fact I have been looking at a 'housesitting' listing site. However, I don't think you'd appreciate my [-]giving away the farm [/-] selling your house at the going market rate.
Good luck on whatever you choose LG4N.

p.s. I have found that in retirement, MOST things either no longer matter (have less importance) or have fallen way down on the priority list. You should join us. That might make a big difference in your approach to this.

 

[Achiever51]

LG4NB -

FWIW, here's my two cents...from personal experience of buying and selling six homes over the past 30 years.

For every house, there is a buyer. In some instances, you're selling the house based on "price" (i.e., best priced house in the market); in others, you're selling based on "potential" ("imagine what this house will look like with new carpeting and a fresh coat of paint or at the extreme, picture the new house that will occupy this site once you do the teardown"). Sometimes, you're selling "lifestyle" more than the house itself (i.e., picture yourself out on the water/skiing right to the door of your condo/enjoying the privacy of your own hot tub/whatever).

In every one of our successful SALES, we've worked with the best agent in the market, priced the house competitively, and (this is the important part): HAD A DEFINITE MARKETING PLAN for the property. With our first house, we expected that a growing family would buy the house, so we really highlighted the convenience to schools, number of families with children in the neighborhood, etc. And for the house itself, we focused on the kitchen and the backyard. Despite the fact that the house had some major layout "issues", we sold it for more than we asked...to a family with three kids and another on the way.

Another one of our houses was definitely stuck in the Brady Bunch/Leave it to Beaver style of decor. We just never got around to doing all the decorating improvements it needed...until it was time to sell. For example, our kitchen looked pretty similar to yours, copper hood and all. And the family room carpet was pretty awful in color and condition. I asked our agent what we should do and she advised us to upgrade appliances and countertops, replace kitchen sink and floor and paint the cabinets. We did -- at a cost of about $8,000 as I recall. Also replaced the family room carpet and removed wallpaper in the foyer. We were in a neighborhood that was more established and most families had teenagers or were empty-nesters, so we marketed it accordingly -- putting more emphasis on the screened in deck and hot-tub; and telling young families that there were lots of kids in the neighborhood who earned extra money baby-sitting. We sold the house in a very slow market for exactly what we were asking. (And later I heard from our agent that the buying family completely redid the kitchen !! within the first year. Whatever.)

Point I'm making here is it sounds like you're not clear on the marketing plan for this house. When I see FSBO, I'm thinking (excuse me) oh, this is someone who doesn't want to pay the agent or is so emotionally tied to the house they think no one else can sell it like they can do it themselves. When I see a house for sale, but also for rent, I think that there's a distress sale coming up - this seller is probably carrying two houses/two mortgages.

But what I see from your photos is that you're selling more of a lifestyle. Yes, the buyer might be seeing a teardown, but IMO you should be staging the house for sale to a (likely) South American/European buyer after at least superficially upgrading the kitchen. The right selling agent can put you in touch with staging companies that can do wonders to create the illusion you need to find that one buyer you need. The suggestion to contact Sotheby's is a good one -- you might just find that one person overseas who's looking for this exact kind of property.

And finally, I know it's hard not to get frustrated, but if you can remove the emotion from the equation, and look at it purely as a business transaction, it might make it easier to deal with. (So, I know you've got an attachment to that copper hood, but really dude, it's gotta go.)

FWIW...YMMV.

PS: Indicating the number of sex offenders in the area in your marketing plan is probably not a good idea.

 

[twaddle]

LG4NB, have you received any feedback from buyer's agents? In my experience, they'll be pretty straight with you about what their clients thought after seeing the place. All you have to do is ask.

 

[cute fuzzy bunny]

Funny, my experience has been the exact opposite. Buyers agents have better things to do with their time and no vested interest in helping me better my property and I rarely got a peep out of them even when pursued about it. Only time they're interested is when they have a buyer thinking of making an offer and they want to soften me up about all the problems they can [-]make up[/-] observe.

 

[twaddle]

You just have to make them think you're an agent. A brother in the monopoly is treated well.

 

[cute fuzzy bunny]

Nope, didnt make any difference if I called them or my persistent agent. Everybody loved the place. Nobody had anything constructive to feed back.

 

[lazygood4nothinbum]

finally at least a glimmer of good news (an article differentiating miami from the rest of florida):

Palm Beach, Florida: I'm taking a risk here because this area has been pummeled by foreclosures in 2007. But there are also a lot of boomers retiring, and Palm Beach is looking mighty attractive. If you don't like this high of a risk (which translates to great prices), check out Tampa or Clearwater in the same state.

http://finance.yahoo.com:80/real-estate/article/104278/Best-and-Worst-Places-to-Buy-a-House;_ylt=AjitcIbUI2Z3D79l2hyuUCe7YWsA

I have found that in retirement, MOST things either no longer matter (have less importance) or have fallen way down on the priority list. You should join us. That might make a big difference in your approach to this.

are you kidding? let money get in the way of my retirement? i quit at 49. though i thought i had more $s then, my worst case scenerio now (oh the suffering i will have to endure) is an adventurous few years from buenos aires to chiang mai, just the type of life i've dreamed of but never had the guts to go for. though if i did back then, i might not be able to afford even that now. either way, this just might well be the kick in the ass i needed.

from personal experience of buying and selling six homes over the past 30 years....For every house, there is a buyer...In every one of our successful SALES, we've worked with the best agent in the market, priced the house competitively, and (this is the important part): HAD A DEFINITE MARKETING PLAN for the property...I asked our agent what we should do and she advised us to upgrade appliances and countertops, replace kitchen sink and floor and paint the cabinets. We did -- at a cost of about $8,000 as I recall...Point I'm making here is it sounds like you're not clear on the marketing plan for this house....When I see FSBO, I'm thinking (excuse me) oh, this is someone who doesn't want to pay the agent or is so emotionally tied to the house they think no one else can sell it like they can do it themselves. When I see a house for sale, but also for rent, I think that there's a distress sale coming up - this seller is probably carrying two houses/two mortgages.... you should be staging the house for sale to a (likely) South American/European buyer after at least superficially upgrading the kitchen. The right selling agent can put you in touch with staging companies that can do wonders to create the illusion you need to find that one buyer you need. The suggestion to contact Sotheby's is a good one -- you might just find that one person overseas who's looking for this exact kind of property

don't know how you all do it. we've had mom's house for 28 years. by the time i move from my house i'll have been here at least 17 years. i don't have a problem moving around, it's just all the buying and selling that bugs me. i'm definately an indexed fund kind of guy. i'm surprised all the market players were ever lbym'ers. seems to me ya'all thrive by shopping. i guess its better when you sell as well as you buy. i don’t have either gene. hate shopping; hate selling, i was made for trading sea shells.

appreciate all the good info achiever. the new realtor’s on the way. new agent’s initial phone reaction was to not upgrade but to leave that for the new owner but i will question him that further onsite. an $8k kitchen update absolutely will not due in this area. the jones' don’t just keep up but outdo the jones’ here. he might feel differently when he sees the place in person, i'll find out then.

gonna remove for sale by owner sign but i want it rented. gotta stop that money from leaking away. could take another year so i’d at least like to have the property pay for its own taxes and insurance which otherwise are a part of my unswr. Will talk to realtor about advertising this as an estate sale so no one is waiting for the foreclosure.

sure would be nice to find some kind european to buy mom's house. maybe i’ll wind up selling to a long lost cousin from odessa.

LG4NB, have you received any feedback from buyer's agents? In my experience, they'll be pretty straight with you about what their clients thought after seeing the place. All you have to do is ask.

only some stuff on phone per above. having lunch nearby house with friends & family tomorrow. will see if i can get the agent over to the house after that and see what he has to say.

Funny, my experience has been the exact opposite...Only time they're interested is when they have a buyer thinking of making an offer and they want to soften me up about all the problems they can [-]make up[/-] observe.

i don't need no realtor for that. that's why i have you guys.

 

[Texas Proud]

If you are going to rent... make sure you have a clause in there that allows showing the house.... and that it can be broken if you sell... might have to offer something in $$$s for that option, but I was planning on looking at a house around here, but there was a renter in it with a one year lease... and will not give it up...

Now the house in in bankruptcy... and I was told that if it is sold the rental agreement comes with it...

 

[lazygood4nothinbum]

thanx texas, good thinking and we are already thinking the same. we will ask a reduced rent price for just that reason. maybe give them 60 days to vacate given a sale or pay their local moving cost or something like that.

met today with moving and shaking high profile international realtor for about an hour or more, touring the house & neighborhood. agent understands that i'd like to sell soon & put proceeds into market to ride the recession back up. his initial response surprised me so i'm pretty sure it will shock many here.

1) raise the price of the house
2) no major renovation to either kitchen or baths
3) the copper range hood stays
4) mulch but not red
5) market the house as a swiss army knife

meeting him again sunday after he comes up with more precise proposal & pricing. i've got a guy coming on sunday to work odds & ends, here & there. make it look a bit nicer. i'll do the landscaping. make it look pretty. life goes on.

thanks to all thread contributors. i've learned a lot during this process and i appreciate the lesson, the valuable input and the well wishers.

 

[Bestwifeever]

So glad to read you have a plan and it sounds like it will be underway right away. Good luck and I hope next week we read about the Europeans who got into a bidding war for your house.