Siblings disagreeing on listing price on inherited home

[Jerry1]

No. A realtor could do the minimum amount of work and sell a house for $500k and get their commission of $25k. Or they could put twice as much time and effort into it and sell it for $520k, earning $26k.

There is no incentive for an agent to double their work load for a tiny increase in commission.

*Edit - In a hot market they just have to set the price a few percent lower than market value and wait for the offers to roll in.

Okay, the point is taken, however, setting the price is just the initial work that the RA has to do no matter what. Sure, the RA isn’t going to bust butt for an extra grand, but there’s no reason not to set the starting price in a way to maximize the income. The RA should know the market dynamics well enough to know, and believes that, the best way to operate is to start low and maximize during the bidding process. That’s the part I think the RA should be trusted to know best.

 

[jollystomper]

Have it appraised by two different appraisers. Use the mid-point.

+1

This is similar to what we did - in our case there were 7 of us selling our parents home. Sometimes emotion can influence one's perception of value, so the outside appraisals were necessary.

We had the appraisals, looked at Zillow, talked to a realtor. Then we each discussed what it should be listed at, based on the input, and were able to come up with a number.

It helped that we all get along and none of us are desperate for money. The difference in our views, once divided by 7, did not amount to much.

In the end it turned out to be somewhat moot, as the market was so hot we ended up getting well over the highest appraisal amount.

 

[38Chevy454]

How about just list at $950K, appease the sibling some, but still allowing list price under $1M. Also still allows for the market bidding to determine the actual sales price.

 

[retire to nature]

We sold our home in the Bay Area two years ago. We had three different agents come out and give us their thoughts. The ‘top’ agent in our area who everyone used told us to list it low. The hungry agent trying to win business suggested a high number. The other agent was in between.

We went with the hungry agent and gave her the opportunity to list off the mls and see what kind of interest she saw. We sold for 25k less than our listed price, but had an offer for 75k above it from a less qualified buyer. Our sale price was 700k (!!!) above where the top agent suggested we list.

There is a fundamental misalignment regarding pricing when it comes to the incremental work for an agent vs the incremental commission, which is not in favor of the seller, imo.

I would get a number of opinions, including Zillow and Redfin. We’ve found Zillow to be aggressive and redfin to be pretty close to reality in the Bay Area and So Ca. But neither is hugely off.

I agree with him.
realtors who wanna go low and make the sale faster is just their own benefit. these days, houses are sold on the first day of market. You are paying commission for nothing. Also, these days it is all online.

Redfin is connected with MLS record. so it is real market trend. I would go at least to redfin estimate.
Zillow is just pulling from internet all over to make look better but not so accurate.

I would suggest his strategy. a little less expert but higher asking price. most of ppl wanna higher expertise but they are using their fame to make "their" life easier which you could lose hundreds of thousands dollar like this quote. If it is hot selling market, this strategy is ok. if it is buyer market, it would be risky.

 

[Dash man]

I agree you should listen to your brother that is doing the work and lives locally. You didn’t mention what the carrying costs are, but by using a lower listing price you’ll get immediate offers that you may not see shooting for the higher price.

 

[tb001]

How about just list at $950K, appease the sibling some, but still allowing list price under $1M. Also still allows for the market bidding to determine the actual sales price.

I agree with this approach. Keeping the listing price under $1m is important. Beyond that, I don’t think it matters much. In this market, the market will decide.

I haven’t been following closely enough to know which sibling is local and handling things, but I agree with all those saying defer to the person doing the work.

I have spent a crazy amount of time trying to help my parents plan and it’s incredibly frustrating to be second guessed constantly by people not willing to take the time to learn.

 

[RetireeRobert]

+1

This is similar to what we did - in our case there were 7 of us selling our parents home. Sometimes emotion can influence one's perception of value, so the outside appraisals were necessary.

We had the appraisals, looked at Zillow, talked to a realtor. Then we each discussed what it should be listed at, based on the input, and were able to come up with a number.

I am not sure I would get "Appraiser" appraisals. I would get multiple market evaluations from multiple reputable Realtors. Appraisers process is oriented to bank/lender needs and not necessarily into real time market "best" values.

I would also do some of your own comping by looking at Redfin, looking at recent sales of comparable homes, getting a feel for actual neighborhood values on your own and how fast sales occurred. Part of getting that feel is multiple market evaluations from multiple reputable realtors, but those combined with your own investigation, can let you and sibs make more informed judgements how to tune the starting asking price.

Good luck, and the more all the sibs are involved in "being heard" as to the starting price, probably the better. But you know your sibs, we don't.

 

[Out of Steam]

Redfin is connected with MLS record. so it is real market trend. I would go at least to redfin estimate.
Zillow is just pulling from internet all over to make look better but not so accurate.

Realtor and Redfin are both higher than Zillow for our current house. We believe that Zillow's data does not include some improvements.

 

[daylatedollarshort]

In our neighborhood, at least right now, I'm not sure how much comps from the listing services like Redfin or Zillow matter. I looked up our neighbors' house that sold way over asking recently and the comps for comparable size homes in our neighborhood were $200K - $300K less. They all sold a few months before. The market is changing that fast right now here that what homes sold for a few months ago is irrelevant. Prices in the Bay Area in general have gone up almost 10% in the last month and some of the suburbs are especially high demand, likely due to more people being able to work from home. Killer commutes are easier if you just have to go into the office once a week or so, or maybe never. Home prices in the city of San Francisco have been up due to a lack of inventory, but rents have been dropping due to less demand and home prices in some of the nicer suburbs have been going up much more than the city.

What buyers can afford to pay is also dependent on mortgage rates. Obviously at lower rates they can afford to bid more for a house. Mortgage rates are historically pretty low right so that is helping fuel the boom.

 

[daylatedollarshort]

I agree with him.
realtors who wanna go low and make the sale faster is just their own benefit. these days, houses are sold on the first day of market. You are paying commission for nothing. Also, these days it is all online.

Redfin is connected with MLS record. so it is real market trend. I would go at least to redfin estimate.
Zillow is just pulling from internet all over to make look better but not so accurate.

I would suggest his strategy. a little less expert but higher asking price. most of ppl wanna higher expertise but they are using their fame to make "their" life easier which you could lose hundreds of thousands dollar like this quote. If it is hot selling market, this strategy is ok. if it is buyer market, it would be risky.

All those "sold in 1 day" ads from local realtors here just mean they priced the house too low, or they had a buyer lined up who got a sweetheart deal. One of our neighbors who was a realtor worked the neighborhood and always sold everything quickly and consistently got bottom dollar, sale after sale.

I also don't understand why more people don't use Redfin or flat fee realtors to sell homes. Redfin is on the MLS and charge a 1% fee for homes bought and sold through them. It seem like these days just being on the MLS in areas with low inventory is enough. Tech workers from Facebook and Google are just going to look at the MLS anyway. Are other realtors really worth an extra $40-80K? What do they do to earn that kind of money? How much would a separate staging company services cost?

 

[Midpack]

Let’s assume the house sells for $500K. I know it’s probably way more than that, but at 5% commission, that’s $25K. Maybe it’s just me, but if I was going to pay someone $25K (insert your real number here), I think I’d listen to them. Generically speaking, don’t you think the RE knows best?

My gut tells me that it doesn’t matter. Since there will be significant interest, you’ll figure out what the top of the market is no matter which end you start at.

+1, exactly. Within reason, (especially in a hot market) what it lists for won’t determine what it sells for...

 

[RetMD21]

I like the $950k idea. OTOH you could ask the outlier sibling what he thinks is fair, then average that in.

 

[2HOTinPHX]

OP here again.

Just to clarify somethings...we put off the sale of the home because of Covid and it not being safe to travel. The parties who live out of town had tickets booked and time off to go help and sort though things and get the house ready for sale. Then Covid hit and we all agreed to wait a few weeks or months cause we thought it was gonna be over much quicker at that time. So we all delayed again and again cause it was not and probably still not safe to so IMO.

I think you all for your feedback so far.

 

[retire to nature]

Realtor and Redfin are both higher than Zillow for our current house. We believe that Zillow's data does not include some improvements.

so realtor and redfin the same means because it is based on MLS like I said.

 

[retire to nature]

This posting is interesting because I was waiting for this. I knew ppl are just delaying to sell their houses due to covid. So the market was keep going up due to short of inventory.

The number of death means empty houses especially in CA, but I was wondering about why still so short.

Now ppl are starting to sell. Is it gonna still up and up? or going down or steady selling??

 

[retire to nature]

All those "sold in 1 day" ads from local realtors here just mean they priced the house too low, or they had a buyer lined up who got a sweetheart deal. One of our neighbors who was a realtor worked the neighborhood and always sold everything quickly and consistently got bottom dollar, sale after sale.

I also don't understand why more people don't use Redfin or flat fee realtors to sell homes. Redfin is on the MLS and charge a 1% fee for homes bought and sold through them. It seem like these days just being on the MLS in areas with low inventory is enough. Tech workers from Facebook and Google are just going to look at the MLS anyway. Are other realtors really worth an extra $40-80K? What do they do to earn that kind of money? How much would a separate staging company services cost?

I agree, I sold a condo in LA, CA with redfin. They have a good system and the realtors are in their district to cover. So better chance to have a good agent rather than you would have a slacker agent. But redfin doesnt offer everywhere, only nice cities.

I totally agree, the commission rate is way over to pay. They have to change the system and at least redfin offer better rate.

I sold one house in STL last year on the first day. It needs to be repair so the realtor knew my property long time to tell her coworkers. I called her one day before market advertise to increase the price because after the repair it came out so good.

She offered me $130, I said $140. first day, 138 offer i accepted because I have so much going on at that time, I wanted to get rid of it asap. but I could have gotten higher for sure. I was thinking to listen to expert, but not really, I regretted. She was making sound all difficult to sell and make number low. $140 was the right number.

So I see all the coming soon on redfin, it means real customer may not have a chance to make offer. it makes hotter and hotter.

 

[2HOTinPHX]

+1, exactly. Within reason, (especially in a hot market) what it lists for won’t determine what it sells for...

That's what I am thinking too. With current market conditions might be worrying about listing price too much.

 

[travelover]

........
The Freakonomics guys showed that most realtors, when they sold their own homes, usually priced them a little higher and held out for more money, than when they sold client's houses........

I saw this first hand when I sold my last house. As it happened, the realtor had also put his house on the market. He was constantly advising me to lower my asking price (which he had set), yet on his own house, he stuck with the asking price week after week. When I asked him about the disparity, he gave me some gobbledygook excuse. I finally accepted a lower offer on the condition he lower his commission, since had had screwed up when pricing it.

 

[2HOTinPHX]

I saw this first hand when I sold my last house. As it happened, the realtor had also put his house on the market. He was constantly advising me to lower my asking price (which he had set), yet on his own house, he stuck with the asking price week after week. When I asked him about the disparity, he gave me some gobbledygook excuse. I finally accepted a lower offer on the condition he lower his commission, since had had screwed up when pricing it.

Wow that stinks...I look at realtors as I do car sales person. Avoid then if at all possible.
I am hoping since sibling kinda knows this one somehow and she is doing it at 5% that things will work out so all parties are happy with the sale.

 

[retire to nature]

OP here again.

Just to clarify somethings...we put off the sale of the home because of Covid and it not being safe to travel. The parties who live out of town had tickets booked and time off to go help and sort though things and get the house ready for sale. Then Covid hit and we all agreed to wait a few weeks or months cause we thought it was gonna be over much quicker at that time. So we all delayed again and again cause it was not and probably still not safe to so IMO.

I think you all for your feedback so far.

My sister death was in Aug, 2019 which was before covid, but I put the house on the market on July in 2020. Covid made my clean up the house delayed and early 2020 had official lockdown too.

I know it is not so easy to be ready to put a house market. It takes months and months because I had to repair stuff too.

So, my concern for this hot market is when ppl gonna put their home to the market because most of ppl did like OP did. I am in MO, not so much deaths like CA, TX, NY or FL. we have to monitor to decide the price too.

 

[daylatedollarshort]

I saw this first hand when I sold my last house. As it happened, the realtor had also put his house on the market. He was constantly advising me to lower my asking price (which he had set), yet on his own house, he stuck with the asking price week after week. When I asked him about the disparity, he gave me some gobbledygook excuse. I finally accepted a lower offer on the condition he lower his commission, since had had screwed up when pricing it.

One of the realtors who works our neighborhood had one of our friends put in all these major improvements with low payback. Sure, they would make the house sell faster and he gets his commission easier, but he was thinking about the ROI on his time, not her net profit after the improvements.

Here is an interesting study on the Freakonomics blog on realtor fees: "Sales commissions for residential real estate brokers historically average nearly six percent of a home’s closing price. Do brokers add sufficient value to justify those commissions? We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly."

 

[Brat]

I am not in any way experienced in real estate but my DD lives in silicon valley. Based on her home buying experience expect a bidding war. Select a realtor who has multiple closed sales in the neighborhood, someone good at handling a bidding war, and evaluating offers. Communicate that you are entertaining offers for x days, a week or more, before you consider offers. You want enough time for the buyer to bring in a contractor to evaluate the cost of remodeling. It is the custom in the 'neighborhood' that you have an inspection and put that on the table for all to see. You want an offer with no contingencies.

You will likely list just under a million even if you expect 1.2 or more. The decision of the listing price is driven by the type of buyer you want to attract.

 

[2HOTinPHX]

I am not in any way experienced in real estate but my DD lives in silicon valley. Based on her home buying experience expect a bidding war. Select a realtor who has multiple closed sales in the neighborhood, someone good at handling a bidding war, and evaluating offers. Communicate that you are entertaining offers for x days, a week or more, before you consider offers. You want enough time for the buyer to bring in a contractor to evaluate the cost of remodeling. It is the custom in the 'neighborhood' that you have an inspection and put that on the table for all to see. You want an offer with no contingencies.

You will likely list just under a million even if you expect 1.2 or more. The decision of the listing price is driven by the type of buyer you want to attract.

Some good suggestions there.
Along with the others.

 

[Brat]

One of the realtors who works our neighborhood had one of our friends put in all these major improvements with low payback. Sure, they would make the house sell faster and he gets his commission easier, but he was thinking about the ROI on his time, not her net profit after the improvements.

Here is an interesting study on the Freakonomics blog on realtor fees: "Sales commissions for residential real estate brokers historically average nearly six percent of a home’s closing price. Do brokers add sufficient value to justify those commissions? We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly."

Note the bolded sentence. What you need is expertise in evaluating offers. The Bay area is unique, IMHO. If the discount broker from the Seattle firm has the skills you need go for it.

My #1 piece of advice is not to permit this to be a 'pocket' listing. You want as many offers as possible.

 

[Dtail]

In this market, I am also a fan of listing it a little on the low side and the resulting bidding wars will still get you to a good price.
Psychologically for example, if one was willing to pay 750k for a fairly priced house, if they get into a bidding war on a 725k price, they might wish to go higher since they "really" want this house now and could go over 750k which they might not have paid originally.