1 showing - on the market for three weeks!

housebuilder14March 7, 2014

REA says its the weather plus not a ton of buyers in the price range of my house. I've looked online and houses that sold in my price range are usually on the market 150+ days (the closest comp that just sold was on the market for 300 days!). So I am not worried yet but I am trying to have a game plan.
Anyone else been through this... how did you handle it? House is starting to look messy again as I have no inspiration to keep it clean. I even stopped nagging my boys to make their beds in the morning.

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jrb451

Our home took just at a year to sell. It was a nice home but it required just the right buyer - semi-rural home on 2 acres and a septic system. It was on a hill top with what the appraiser called "a $10,000 view". It was paid for and we'd moved to our new home nearby so it was convenient to check in on. Even so, double utility, insurance, property tax payments provided wear and tear.

What are your circumstances? Can you handle a 300+ day waiting period before selling?

    Bookmark   March 8, 2014 at 10:07AM
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Mmmbeeer

It basically comes down to the perceived need or want to move. Basically price (and location, which is a large determining factor in pricing) is what determines a sale. If you have no urgency to move then maintain your pricing. If, however, you are experiencing pressure to move (out of state employment, home too small to accommodate your needs, home is no longer affordable etc.), you need to look at your competition and position yourself in the market as "the best bargain" out there. Look up "endowment effect" if you've never heard of it; it explains why homeowners tend to over value their homes and why they tend to price them too high. Bottom line: it all boils down to price.

    Bookmark   March 8, 2014 at 10:22PM
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weedyacres

While a low enough price will sell anything, it's not always necessary to do so, if you've got a house that appeals to a smaller segment of the market, whether that be due to price range, location, amenities, special features, etc.

So figure out whether that applies to you and act accordingly.

2 houses ago, we listed in mid-January and it was 3 weeks before we had our first showing. It was a mid-range house, but winter in a cold climate and the market was starting to slow. Our last house, we had showings right away but it took months to get under contract, as it was in the top 10% price range and there were extremely slow sales in that range. As the market started to pick up, houses started to sell, and we did as well.

    Bookmark   March 9, 2014 at 10:13AM
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housebuilder14

thanks all.
we don't have to sell asap although it would definitely take some of the stress out of our current scenario (although would add additional stress as we would have to find a rental situation).

    Bookmark   March 9, 2014 at 6:05PM
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Mmmbeeer

I did mention that location is a factor--if you are more rural, it will take a little more time to sell your home. However, it will always boil down to price. You can bet that if you did your due diligence and did a good job marketing your home, even if it was in Bumfrick, Nowhere USA, and only asked $1 that you would have a bidding war to end all bidding wars. Your price/value vs. your competitor's price/value is what determines a quick sale.

    Bookmark   March 10, 2014 at 11:08PM
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Sophie Wheeler

Since the weather has taken a turn for the better, asses the interest in the home ths week. If you still aren't getting any action, time for the first price drop. A month on the market, and it's not a ''new'' listing anymore.

    Bookmark   March 11, 2014 at 7:47AM
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housebuilder14

hollysprings - are you recommending a price drop in the first three weeks for a house that has comps that take almost a year to sell?

i am not a real estate expert but i do feel like my house is well priced (below the comparable new construction houses). there are just not that many buyers for a house in my house's price range (multi-million dollars).

i think if i wait a buyer is out there for the value we are giving them (more land and 10% below in price versus the new construction). but its definitely a smaller market segment because most people moving to town want new construction.

obviously if i need to sell asap and i lower the price, there will be more value and the house will sell more quickly. but i thought it more appropriate to at least give it until mid-way through the height of the season, which by me starts around April.

maybe i am crazy . . . but i was inspired by weedyacres' story.

thanks everyone for commenting though. any other success stories much appreciated!

    Bookmark   March 11, 2014 at 3:10PM
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gyr_falcon

Has it really been over three weeks your house had been on the market when you posted this thread? The reason I ask is that you posted that you had put the house on the market the morning of February 24. That would make it only 16 days on the market today. Did I miss something?

Confused Gyr

    Bookmark   March 12, 2014 at 1:28AM
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housebuilder14

it officially went on mls 18 days ago but my real estate broker started marketing a week earlier. thanks

    Bookmark   March 12, 2014 at 7:10AM
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Sophie Wheeler

No, I'm not suggesting a price drop after three weeks. After 4-5 weeks, with improved weather, and no improvement in showings, then yes, time to reassess your pricing strategy. No showings, with good weather, in the hottest showing season, with the home the newest it will ever be on the market, says more than the home is in a low selling percentile. Very few showings means price is a problem. You only get one chance as the ''new'' listing in the market. If you don't hit the sweet spot in pricing when it's first listed, the listing becomes stale by the time the price is reduced enough to generate activity. That's chasing the market and results in a lower price down the road than if you had just priced it lower in the beginning. Plus the carrying costs. Pus the uncertainty of getting it sold ''in time'' for other life plans.

    Bookmark   March 12, 2014 at 7:59AM
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housebuilder14

thanks for the clarification hollysprings!

i guess i will see what happens in the next two to three weeks. my realtor says market is dead and no one is looking yet. she hasn't asked that we lower the price (are rea usually aggressive about this?)

unfortunately we feel like we set the price low and i am not sure we have much room to move down -- basically because we don't want to be giving house away. i know everyone always values their house more than its worth to others . . . keep crossing my fingers!

    Bookmark   March 12, 2014 at 9:39AM
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live_wire_oak

"we don't want to be giving house away"

Sorry, but that's a RED FLAG. The market determines price, not your wants or needs. Add up your carrying costs for a year on the market, and a 15% price reduction. Mull over spending those carrying costs. And still having to reduce the price to get it sold.

I don't know where you are located, but in my area, sales are active and UP from the previous year. In all categories, including top of the market. What's moving are homes that are priced right for the current market realities, NOT the inflated prices of the boom years.

Take another look at the comps. Or, post your listing if you're brave enough. ;-)

    Bookmark   March 12, 2014 at 10:16AM
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sushipup1

A local house in Pebble Beach finally sold recently. It had been on the market for 12 years. Starting at $30m, finally sold for half that.

Good luck!

    Bookmark   March 12, 2014 at 11:53AM
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housebuilder14

thanks live_wire_oak. but i am not sure what you mean by "its a red flag"
a 15% reduction is more than $400,000 - and puts our house below market value if you look at comparable analysis. houses in that lower price range (both new and old) have less square footage, less acreage, less custom millwork, etc.).
yes - it would sell quickly at a 15% price reduction but i don't think there is anything wrong with wanting to wait to try to find the right buyer to get some value. the carrying costs won't come to $400,000+

as i said earlier, my broker said that the market is still "dead" for houses above $2 million (both new and old construction).

I don't want to post my listing (sorry) but i have looked at the comparable analysis. we are anywhere between 8% and 15% below comparable new construction, which usually has less square footage and is on half the acreage we have. we are 15% below what we bought the house for in 2006 (although i know that doesn't have a bearing on current price, I do think its a piece of the puzzle that current buyers look at).

our rea said the market for homes of my home's generation is generally at 10% below peak, so we priced below that. in addition, there are a number of comparables (not new construction) that we are priced at or below - from what i know they are not receiving traffic either. and a comparable house just sold for a little over our current price after being on the market for a year.

i am not sure where this post is heading - i guess i am nervous because i want to sell the house but i also know that it may take awhile. i know if i lower the price significantly it will most likely sell more quickly - but i am willing to wait a little - i just need to figure out for how long and what kind of long-term game plan (and gamble) i am willing to make.

thanks again.

This post was edited by housebuilder14 on Thu, Mar 13, 14 at 9:08

    Bookmark   March 12, 2014 at 12:10PM
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ncrealestateguy

The weather in most of the US is still crappy. I'd wait until the Spring buyers get here and then access the pricing. It sounds like you and your agent adjusted your price in regards to the comps.
How many Actives are there currently and how many solds in the last 12 months? You can then figure out your Absorption Rate, to see how much inventory your market has.

    Bookmark   March 12, 2014 at 11:58PM
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housebuilder14

Thank NC!
There is lots of inventory in the market - about 45 homes +/- $250,000 of the price of my home. But I would say there are about 15 homes that are closer to my home's sweet spot. Unfortunately there are only 5-10 homes (depending on how you look at comps) that have sold in my home's sweet spot in the past 12 months.

    Bookmark   March 13, 2014 at 9:17AM
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live_wire_oak

Ouch. With that large of a supply of homes on the market, then you are looking at years on the market, not months. Do you have years to wait for a sale?

    Bookmark   March 13, 2014 at 10:08AM
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housebuilder14

we have about a year. that's why we have priced below the market and below all the new construction (which is how you get from 45 to about 25 and then there are 10 other houses that are not comps because of location). when i say "sweet spot" i don't mean price, necessarily, but also comparables - meaning i think the buyer would look at and think about buying our house as well. So its a little over a year absorption rate - but we knew that going in as most houses that sell in the price range have DOM of 300 days.

we are crossing our fingers but its definitely tough where we live...

    Bookmark   March 13, 2014 at 10:43AM
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kirkhall

You aren't "below market" if you keep comparing to "new homes". Your home isn't new. They aren't true comparables. (You acknowledged this yourself, above--"everyone wants a new home"--now you need to acknowledge this in your heart.) You'll know with a couple more weeks and no showings.

    Bookmark   March 13, 2014 at 3:19PM
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ncrealestateguy

If your market stays the same as it has been over the last 12 months, then between 4 -5 homes will sell in the next 12 months. Forget about that 300 avg. days on the market stat. This stat is for only homes that sell. This stat will also only be for the next 4 -5 homes that sell over the next 12 months. If you honestly think, that after looking at all of the 45 homes, that you are probably in the top 4 or 5, then you are ok... you should sell w/in your timeline. Keep track of the new listings that keep coming into the pool too, as these may cause you to have to change your strategy a bit.

    Bookmark   March 13, 2014 at 3:43PM
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Mmmbeeer

I certainly don't want to be the voice of gloom and doom because you're right about this miserable weather and you have the insight to look for input before your home has been on the market for months on end and you've only been on the market a relatively short time. But I would agree that it's best to lose the thinking of "giving a house away". A home sale has nothing to do with your expectations or the debt you owe etc. I'm thinking the reason that live_wire_oak used the term "red flag" is because when one hears a home owner say this it is because it almost always indicates the home owner is not looking at their home objectively or from a buyer's POV. The buyer's job, of course, is to get exactly what they want and to pay as little as they have to for it.

IMHO, whenever you hit a price point where you are competing against new construction, you never want to underestimate its appeal. Many young couples both work full time, don't want any projects (often including painting), love the idea they can customize their home, even if they are only making choices between builder grade options, and building is a status symbol for a lot of people. You mentioned custom millwork and I'll just be honest enough to say that whenever I hear this phrase, IME, 99% of the time it's dated by the time the home is put on the market and often overly ornate and too personal. Yours may not be like that at all, of course ;-) I'm just saying that once any new construction becomes your competition, you have to have something that sets yours apart because people like new, current design.

I hope I don't sound like a jerk--I'm crossing my fingers for a quick sale for you. I've only had to sell our homes because of job transfers and we'd be panicky after a month if we didnt have an offer. And your situation isn't like that, of course ;-) But, the one talent I know I do have is that I'm brutally honest about all the faults of my home once I decide to sell.

    Bookmark   March 13, 2014 at 8:06PM
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housebuilder14

thanks everyone! i will keep you all updated.

    Bookmark   March 14, 2014 at 9:30AM
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housebuilder14

For those that would like to accompany me on this journey - (a trip that i have not enjoyed thus far) - we had one showing on sunday and the buyer said the house was too big.
Weather supposed to be nice this weekend. Crossing fingers. We also have a showing scheduled for tomorrow.

    Bookmark   March 19, 2014 at 3:18PM
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galore2112

I don't understand. Don't you have a realtor? 3% of $3M = $90k.

For that money I'd expect to get perfect advice, a comprehensive marketing plan, a perfect price point and a sale.

Or does that fee only get you an MLS listing and wishes of good luck?!

    Bookmark   March 23, 2014 at 11:07AM
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ncrealestateguy

Jridh... where in the thread has the OP said she is disappointed with her agent's marketing plan and advice.
Agents can not pull buyers out of thin air. Sometimes, even when a home is priced well, it can take a while.
Even clients with fine agents come to the forum for advice and reassurance. It does not necessarily mean they have a slacker of an agent.

    Bookmark   March 23, 2014 at 4:13PM
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galore2112

If I were satisfied with my RA I'd not turn to this forum for advice. I think a RA for that type of home should have connections to find a buyer and not blame the weather. For this much potential commission a RA better work extra hard.

    Bookmark   March 23, 2014 at 4:36PM
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saltidawg

ncrealestateguy,

While there have been no overt complaints about the RA, the nature of the OP's questions have to suggest a possible concern (or two) at least in communication between the two. Would not you agree?

But I also fail to see why you choose to defend the RA when nothing has been said specifically about he or she. You can't possibly know he or she is doing a good job either.

YMMV

This post was edited by saltidawg on Sun, Mar 23, 14 at 17:31

    Bookmark   March 23, 2014 at 5:10PM
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ncrealestateguy

Salti... I am assuming that if the OP is very disappointed with her REA, she would have said so, that's all.
Jridh, So, for every home I list, I am supposed to have an immediate buyer that the property matches exactly? That is just silly, and probably you say this just to stir the pot.
Let's let the OP give her opinion on her agent's services, instead of us second guessing.

    Bookmark   March 23, 2014 at 7:36PM
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saltidawg

"Salti... I am assuming that if the OP is very disappointed with her REA, she would have said so, that's all."

ncrealestateguy,

You are taking this thread to all kinds of strange places.

I never suggested that the OP was unhappy wih her RA... I did point out that you for some reason did feel the need to somehow defend that RA.

I did say, "While there have been no overt complaints about the RA, the nature of the OP's questions have to suggest a possible concern (or two) at least in communication between the two. Would not you agree? "

Again, no suggestion the OP is dissatisfied. Based on the nature of the OP's questions I do in fact believe that there is basis for a possible concern that the OP and the RA are not communicating well.

Don't know how to make that any clearer.

I personally do not see the need to ask for the OP's opinion about her RA unless it is simply to allow you to see if you were correct about something that should not have be come an issue.

    Bookmark   March 23, 2014 at 8:08PM
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galore2112

"Jridh, So, for every home I list, I am supposed to have an immediate buyer that the property matches exactly? That is just silly, and probably you say this just to stir the pot. "

If you take on a $3M listing, I'd expect you to have an extensive network of realtors and prospective buyers. Why would you -earn- a $90k commission if you aren't up to a job like that? It's not a $6k commission on a $200k tract home.
If you aren't a producer that can take on a $3M job, you shouldn't accept it. If you blame it on the weather, like the OP's RA, you are probably not ready to deal with houses in that price range.

    Bookmark   March 23, 2014 at 10:11PM
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Mmmbeeer

In defense of Realtors from someone who has sold three homes FSBO, the Realtor is an agent for the home owner, which can be a very valuable resource. However, the home owner is the one that sets the price. Price is the single most important determining factor in what drives showings and, ultimately, sales. The reason so many homes don't sell immediately is because of something called the endowment effect. Here is Wikipedia's explanation:

In behavioral economics, the endowment effect (also known as divestiture aversion) is the hypothesis that a person's willingness to accept (WTA) compensation for a good is greater than their willingness to pay (WTP) for it once their property right to it has been established. People will pay more to retain something they own than to obtain something owned by someone else "even when there is no cause for attachment, or even if the item was only obtained minutes ago. This is due to the fact that once you own the item, forgoing it feels like a loss, and humans are loss-averse.

Blaming an agent is often (but not always) misplaced. Many home owners tend to mistake their perceived needs for funding to translate to a higher priced home sale than is realistic. The facts and psychology back up my position on this.

    Bookmark   March 24, 2014 at 12:47AM
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Mmmbeeer

"If you take on a $3M listing, I'd expect you to have an extensive network of realtors and prospective buyers. Why would you -earn- a $90k commission if you aren't up to a job like that? It's not a $6k commission on a $200k tract home.
If you aren't a producer that can take on a $3M job, you shouldn't accept it. If you blame it on the weather, like the OP's RA, you are probably not ready to deal with houses in that price range."

The pool of available buyers in this range will be much smaller than the pool for a much more modest home. Not to mention that at this price range it is often more advantageous for buyers to build in order to be able to customize their home to get exactly what they want as opposed to settling for someone else's choices.. Of course, that can become a headache when it comes time to sell as a customized home limits the pool of buyers even further. No amount of commission can entice Realtors to force buyers to the table. All buyers tend to have budgets (even high end ones) and they tend to want the best bang for the buck. The unfortunate owners that choose to overprice their homes will sit on the market longer. That's just simple economics,

    Bookmark   March 24, 2014 at 12:56AM
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Acadiafun

Mmmmbeeer I read your post and agree that the homeowner sets the price which is a disadvantage to the homeowner. I felt really frustrated that I had to do my own market analysis to find the price point of my house listing. I at first believed that the price points of similiar houses in my neighborhood was the place to start and the realtor did not give me any firm advice. I reduced the price drastically and my house sold while a dozen others are still for sale six months to a year after being listed. Why can't a realtor just advice on a price? Obviously the other sellers have not been adviced well because their houses are not sold. It seems utter nonsense that the seller is not advised on what to list their house for.

    Bookmark   March 24, 2014 at 1:01AM
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Mmmbeeer

Acadiafun, that's interesting. I've had Realtors give an exact range that they believed my home would sell for even when I told them upfront we were doing a FSBO (of course, they were doing a market analysis in the event that if I was unable to sell my home, than they could possibly pick up my listing). I've never had the experience of a Realtor not giving me precise numbers--most gave me numbers to price my home at for a quick sale and a higher number if I had more time to sit on the market. I wonder how common your situation is. I agree, it doesn't sound very helpful if you are an owner and and agent won't give you specific opinions on pricing.

    Bookmark   March 24, 2014 at 1:15AM
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housebuilder14

Woah - didn't mean to start all this controversy about the quality of my REA.

I like her. She provided a market analysis. We set the price together, with me having the final sign off. I think its well priced given the comps. She has been doing a lot of marketing too and is always responsive when I ping her with questions, etc.

But its a competitive market and not a lot of movement. Sure, if I lowered the price by $300,000 we could probably sell it asap but we are not prepared to do that yet.

As I said earlier (I think) I was ranting a little, looking for a long-term game plan, and hoping to get some happy ending stories that can calm me down and show that sometimes it all works out.

    Bookmark   March 24, 2014 at 1:26PM
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ncrealestateguy

Just remember that only about 4 - 5 homes in your price range are going to sell in the next 12 months. Make sure your agent realizes this. A lot of agents have no clue what an absorption rate is. You HAVE to be set up on an auto search, so you will be notified when a competing home goes under contract. Try to figure out why that person chose to write an offer on that one instead of yours and then react accordingly. If you do this, it will all work out,

    Bookmark   March 24, 2014 at 5:20PM
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weedyacres

I agree with NC: your agent should be watching the comps closely, and there are few enough that you can analyze each one.

We were in a price range with few sales as well, so every time a comp went under contract, the agent talked to the buyer's agent to find out why they didn't buy (or in some cases, even look at) ours. Sometimes there wasn't anything we could do about it (e.g., buyer wanted a basement, our house didn't have one, so they didn't even look at it), but it let us keep our finger on the pulse more closely. And each one that sold gave us a more recent comp to judge our price by.

Our agents also kept track of the lookers, and would follow up informally with their agents to see if/when/what they bought.

    Bookmark   March 27, 2014 at 1:35PM
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housebuilder14

thanks - i have access to a website that lists "competition" and lets me know if new homes come onto the market and if homes already on the market have sold. i will talk to my broker about trying to get additional feedback. do REA ever give real feedback though?

    Bookmark   March 27, 2014 at 1:54PM
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ncrealestateguy

They probably will not come right out and say if a buyer thinks the home is overpriced, but otherwise, sure. I am brutally honest in my feedback.

    Bookmark   March 27, 2014 at 4:26PM
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weedyacres

My agents were completely open with feedback, and passed it along verbatim. They never sugar-coated anything. Something to look for when agent-shopping. :-)

    Bookmark   March 28, 2014 at 8:30AM
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