Should we adjust price?

weedyacresApril 16, 2013

I am looking for pricing (adjustment) advice. I hesitate a bit to put this out there, because my experience is that most of the posters here jump pretty quickly to "drop the price, cut your losses, and sell the darn thing" without taking time to understand the nuances of individual markets. So now that I've implied I don't trust your advice :-p, I'll toss this out there anyway.

We've been listed with a realtor for 5 months. We're in the upper 10% price-wise, so traffic has been slow, as expected. About half the showings have said we're in contention, and have had follow-up questions or showings, but no offers, and none of these people has bought another house yet. Agent says "I don't know what to do to get the buyers off the fence."

Meanwhile, nothing else within $75K of our price has sold. Until a month ago. 2 properties have gone pending, and are suitable comps (finally the market can tell us something!). They both say our house is worth about what we had it appraised for a year ago. We priced 5% above that, to allow room for negotiation.

BTW, the buyers of those 2 homes did not look at ours. One wanted a basement and the other wanted closer to the next town for commute purposes.

So, will a price reduction get these potential buyers off the fence? If so, how much?

Option A: Drop it about 3%, have the agent call the fence sitters and encourage them to move.

Option B: Drop it 5%, to what the comps tell us we'll sell for. This also gets us to a round number which should theoretically bring in the next lower tier of buyers. Except that the reverse lookup says the same number of people are looking at our current price, at 5% less (the round number), and at 8% less, so I'm not sure in this case it expands the pool, though this is just those getting auto emails from realtors. And of course dropping it to market value makes it likely we'll get offers for even less.

I wonder why someone seriously considering our house, if they thought it was overpriced, wouldn't just offer what they thought it was worth. Agent tells us people hesitate to lowball, and wait until the price drops to make an offer. Really?? One of the above comps went pending at 90% of list 2 weeks after listing. I'm not sure I'm convinced.

Your thoughts? Bring it on.

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I don't know that the specific price is your biggest issue. When you're talking about a typical subdivision-type home, of which there are a dozen or more similar in a buyer's chosen area, then it's easier to say that a simple tweak in price, or upgrade in finishes, can close a deal. But your home is custom, in a particular location, with particular features. So it's going to take a particular buyer. The people who bought the other two houses weren't going to be your buyers. So I don't think matching the price on those homes (although it's still vague what their sales price is vs. your asking) would have snared one of them for you.

When folks have a very specific type of property, it's going to take a very specific buyer. Of course a drastic price drop could lead to a sale, but that's because the home is then an option for an entirely different buyer. In my area, a home in the upper bracket can expect to get a lowball-ish offer, and then negotiations ensue. Your realtor should be able to tell you if that is the case in your area, or if buyers are reluctant to start that "dance". Only you know where that line is for you.

    Bookmark   April 16, 2013 at 11:12AM
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I think, to move someone off the fence and to buy your house, you'll need a price drop.
They are waiting for it at this point, since they know you've been on the market for 5 months. If you aren't ever going to drop your price, then they know you are firm in your asking price, and they don't want to mess around with offers for you anyway (plus, they probably know you were FSBO previously, which adds to the "firm on price" mindset). A price drop might entice an offer. And, it will be lower still, but then at least you'll have an offer to work with.

When we were searching for a house, we made a couple offers, and never won out (it was a hot market then). Our offers were never more than hot offers (we did offer more than asking once or twice, but never more than more than asking...) When we finally bought, it was a house 30k more than what we'd ever offered before, but in a neighborhood we really preferred to be in compared to the other homes we'd looked at/offered on.

I guess what I am saying is, to move someone off the fence AND to your property, you need to have the advantage. You don't have the basement. You don't have the location. You'll need to have the price. That you've stuck to your price for so long AND it is above the other houses that have sold that aren't actually comps for your house (with basement, and perceived better location), then you'll need to have the price advantage. *If* you are wanting to sell now.

If you are fine waiting another 6months to a year, then, yes, I believe it could be just a waiting game for you. But, how long do you really want to wait? And, for what overall return?

If you are willing to wait a long time, then after this summer, if it hasn't sold, I'd take it off entirely. And, put it up 6mo to 18 months later.

    Bookmark   April 16, 2013 at 11:26AM
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Could it be that they think the price the would be interested buying at would be a much lower than they think you'll reasonably accept?

I know I won't bother making an offer when that is the case. Ie when I feel it is much more of a low ball than a low ball. I don't have a problem doing a low ball, but there are times you just listen to what the agent is saying about the owner and you can infer that they wouldn't be open at all at a certain point.

    Bookmark   April 16, 2013 at 11:29AM
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My thoughts were along the lines of lyfia's.

Since you priced yourself OVER the appraised value, I would think that you were one of those people who thought you ARE "getting XX dollars for this house and not a penny less"!

We have many of those in my area... who will not sell unless they get the dollar figure in their mind, even when appraisals and/or comps show that they are unrealistic.

    Bookmark   April 16, 2013 at 2:13PM
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I agree with kirkhall and the other PPs.

As a potential buyer (and with the caveat that the markets I've looked in have been different), I would assume, based on the amount of time your house has been on the market and the lack of price reductions, that you were entrenched and weren't particularly motivated to sell and/or weren't willing to sell below a set price. To be honest, I'm rarely interested in houses that have been on the market for an extended period of time, because I tend to think those sellers aren't motivated or realistic.

I understand that your house is in the upper tier for your market, and I don't purport to speak for the majority of buyers, but I can't help but think that most buyers, particularly in recent years, want to feel like they're getting a good deal and that they've made a good investment (in a house they can eventually sell). I would be surprised if it were the case in any location, even for upper-tier properties, that houses that sit on the market for an extended period of time, without any "real" price drops, are sold close to ask.

Also, and I'm sorry if this feels harsh, but statements like this "And of course dropping it to market value..." make me a bit nervous for you. You've gotten some additional information from recent sales, which is great, but it's not really clear what "market value" is for your house, so please don't set your expectations too high. As for the second part of your sentence ("...makes it likely we'll get offers for even less") is absolutely right, and, if you lower the price, you should expect that buyers will still expect to pay less than that.

I truly wish you the best of luck; I know this has been a long process.

    Bookmark   April 16, 2013 at 2:43PM
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Predicting what motivates fence sitters is, in my mind, a fruitless endeavor. Like with everything else in the world, too many variables to say anything with certainty would have "made the difference."

But based on what you are telling us, you don't "look" like a motivated seller. To me as a (fictional) buyer, I see the following:

-150 DOM without a price reduction
-Comps hard to come by (by your own admission) makes it difficult for me as a buyer to assess "true value" of property (that's a two-way street)

Overgeneralizing, most buyers would see those two and shrug "Meh, not someone that's really in a hurry to sell, I'll keep looking." Given how MANY buyers enter the market via the internet, they may not even see your home live. Its all based on search criteria and parameters.

My suggestion: Drop your price by 3% and see what happens. You are emotionally prepared for that it sounds like. If that doesn't move buyers through your door, be prepared to drop it again. One drop = you are motivated. Two = You are VERY motivated.

This post was edited by Tony2Toes on Tue, Apr 16, 13 at 16:15

    Bookmark   April 16, 2013 at 4:06PM
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Post front photo of the 2 comps that sold, and your front MLS photo. Also give basics of these 3 (lot size, age, sq ft, size of garage, special characteristics).

Also give same for 2 homes that sold in that were $75k cheaper in the range that you said sold also.

Then we'll compare yours to theirs with pros/cons of see where you fit with your price compared to what is selling in your market.

    Bookmark   April 16, 2013 at 4:10PM
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What sweet_tea said. I know you don't want to hear it, but your landscaping and curb appeal just aren't top of the market. Coupled with the DOM and the fact that you haven't done a price drop at all, I think you are setting yourself up to own this house for a long long time.

You have to decide if you want to SELL, or you want to WAIT and WAIT and WAIT to SELL. And have all of the carrying costs and still end up less than what you really wanted.

If you want to move on, drop to the next lowest pricing tier where there is more activity and where you might be seen as a bargain than a not quite top 10%er trying to get into the top 10%.

    Bookmark   April 16, 2013 at 4:52PM
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What kind of feedback has your realtor received from the other people's agent? This would be important information that could help you to come to a decision. Or is your realtor also representing the other potential buyers?

    Bookmark   April 16, 2013 at 5:10PM
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Thanks for the input so far. Here are answers to some of your questions and additional info.

Price drops: I've been watching the market for 2 years and price drops are few and far between for everything on the market in our range. So we don't look any more "stubborn" than the others.

Location: our location isn't inferior to the comp that just went pending (after 1 year on the market); in fact ours is in the more preferred school district. They had a specific commute they wanted to limit.

Lowballing: We've instructed our agent to communicate to others to "make an offer" if a price issue came up, to indicate our willingness to talk. One agent said it would be a great deal if the spare lot was included, but the buyer didn't "make an offer" despite the encouragement.

"Over" pricing: Is 5% above expected really vastly overpriced to turn people off? In fact, I think it was NC that suggested that's how we go to market. It doesn't seem like 5% would be that big of a deterrent. And for those of you newer to our saga, we went through great pains to really analyze the comps and get the pricing right.

DOM: Our market is S-L-O-W at this price point and everything has long DOM. Looking at other actives $75K on either side of us:
actives avg 147 DOM
pendings avg 235 DOM
solds avg 222 DOM
So I don't know that long DOM taint houses here as they do in other locations or price points.

Feedback: Some have said the exterior is a deal-breaker. Those people crossed us off the list. We get universal praise for the interior and the views. For the fence sitters, we've got one where one spouse wants us and the other spouse wants another, one where they wanted a sidewalk for their kids to ride bikes, one who is upgrading and could buy a home before theirs sells but would rather not, one who came back 3 times but then decided not to stretch as much financially and bought something less expensive. In the meantime, now that it's Spring we're working to bring the lawn back from last year's drought and keeping the landscaping well-kempt.

Curb Appeal: Yes, ours is worse than the other 2 comps. I'm not going to post photos so that you can beat me up again. :-) They both have more interesting fronts and side-load 3-car garages. As for other aspects, here's a rundown:
Comp A: About the same size as ours plus a smallish walk-out basement. 7 acres, on a smaller lake than ours, and a relatively busier street (not inside a subdivision). 11 years old, interior finishes very nice (not dated, but not all wow, like cultured marble in master bath). Went under contract in 2 weeks.
Comp B: Just a few hundred sf less than ours, on a tiny lot in a subdivision, with a pool. No basement, built in 2006. Very nice finishes, comparable to ours except we've got a few extra wow factors like heated floors. This is one I've been watching for the year it has been on the market, as it's the closest in size and finishes to ours and it's nice inside and out. Over time dropped price by 10%, and has been at current price for at least 6 months.

Comp A sold for more than us, Comp B for less.

sweet tea: I'm not sure what you're asking for with the 2nd part of your question. You're wanting info on comps that sold for $100K less?

I'm not opposed to a price reduction if I thought it would make someone jump on it. I'm just trying to avoid a knee-jerk "drop the price" reaction if it won't have the intended result. We're not seeing houses being snapped up all around us, we're not coming in 2nd or 3rd time after time. If either of those were happening, it would be a clear signal.

And I'm not sure that a 5% drop will actually increase the buyer pool, given that there are the same number of people looking there as there are at our current price point.

I am positive if we dropped the price $75K we would sell it immediately, because it would be significantly under market value plus definitely in a price range that's faster moving. But I'm not willing to give it away (and no, that's not an emotional statement; if anything I've approached this over-analytically).

OK, I've rambled on long enough. And it probably feels like I'm arguing, which I'm trying to avoid. I'm still listening and considering...

    Bookmark   April 16, 2013 at 7:58PM
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The reason I asked for comps $75k less was to see what buyers can get for that price.

Your 2 comps have nicer fronts and 3 car side load garages and yours is a 2 car front load garage. Big difference.Yours belongs a rung down the ladder from the others due to this as far as being a direct comp. Someone is always going to choose a nicer looking house with a 3 car side load over a not as nice looking house with a 2 car front load...unless the 2 car -front load is cheap enough to offset the difference.

This makes a case for you to lower the price.

IMO, the front of your home never matched any of the comps in your price range. All the others in the price range had better looking fronts/much better landscaping. It's not only the landscaping, but the front elevation of the home. It's a cheaper style front elevation that usually goes with homes in a lower price range versus the nicer elevations that you are competing with.

Your interior is awesome. But the exterior brings it down. the 2 car front load garage isn't helping.

You can do what you want. But IMO, your comps are all nicer outside/front but for some reason you cannot see that this means your price should be lower because you aren't really a comp with those nicer homes. You're a rung lower due to the front elevation.

    Bookmark   April 16, 2013 at 8:55PM
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It sounds very frustrating, for sure. We sold three homes, two of them in five days, the last one (a year ago) in 10 days; all three of them had multiple offers. Years ago, we picked up the book "How To Sell Your Home In Five Days" which my husband and I felt gave us some really great advice and options as a home seller. And, of course, the gist of the book was price is the only reason something doesn't sell. Because you will sell ANY home as long as it is priced right. You can sell the biggest piece of crap in the worst location if you only asked a dollar. And, at that point, you'd have buyers competing and driving the price up if only for the lot. I really don't feel, as long as your home has proper marketing (exposure), that anyone can really "give their home away" as it will always be market value that drives the price of homes.

That being said, it's always hard to gauge how ones homes compare to comps. My strategy for that is to look at comps and then "argue" with my husband in favor of the sold comps and current homes for sale over our own home before we set a price and start marketing. We both find when we put ourselves in the mindset of our competition (as opposed to mainly finding reasons our own home is the better buy), it really gives both of us a whole new different perspective and, I believe, helped us when we determined our pricing.

There is no actual profit until the sale, just like the stock market. Too many people get caught up in paper losses and gains that have no meaning until the day of sale. My advice would be to do a substantial discount (assuming you can afford it), and try to make a "splash" in the market to create buzz. Generally speaking, it's best to do that when you first enter the market to create that sense of urgency amongst buyers to get them to move and act fast. Too many people drop their prices in small increments and end up chasing the market, when they could reduce their carrying costs and headaches significantly by making a reduction that gets attention right away. I wouldn't bother going out of my way to go to Macy's for a 5% discount when I know there are dozens of others stores I can go to to find what I'm looking for. But I'll make a special trip if I've had my eye on something and its a more substantial discount, if that makes sense.

    Bookmark   April 16, 2013 at 9:46PM
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I find that 5% over expected may be a bit too much, especially if you're in a slow market. In my opinion and experience, selling depends on whether a house is priced "right." You may scare off people by having too high a price.

    Bookmark   April 16, 2013 at 9:51PM
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To follow up: I recently bought property; during the course of my buying, there were properties who were too highly priced and that later settled for substantially less than the asking price (at price at which I also would have bought the property). However, I never submitted an offer because I just didn't want to deal with a seller who had such a high asking price.

    Bookmark   April 16, 2013 at 9:54PM
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I've read your follow up, and remain even more convinced you have almost zero motivation to sell. You aren't doing anything other than rationalizing your original asking price. That's fine, no faulting you there, but that rationalization does nothing to signal potential buyers "Hey! I'm ready to sell!"

Selling a house isn't about being right. It's about being attractive to buyers. Price drops make you more attractive.....that's an industry-wide fact. Drop your price just a little and I all but guarantee a fresh crop of showings. 1% even will send a message. Not a big one, maybe, unless someone out there has you saved as a favorite on their web listing app. For them, it could be a signal that you are open to offers at a lower price. And there's your "get off the fence" factor at work.

Really, unless you truly expect a full-price closing, what are you waiting for? A principle thing? Forget it.....not your goal.

    Bookmark   April 16, 2013 at 9:59PM
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A slow market is rough, but only you can answer if it is worth it to you to wait until things improve, or try to sell for less than you would like to quicken the process. A small drop will bring your listing back to the top, and potential buyers will at least look at the information again to see what has changed and refresh their memory about your house. But if the buyer pool is small and relatively unmotivated, it may not change anything. Especially in the higher price ranges.

How are the other price ranges in your area doing? Sometimes an increase in activity in the lower price ranges can slowly spread into other brackets. In our area, mid-priced home sales started to pick up, then the upper areas. Now there is a shortage of homes for sale in some brackets, causing bidding wars and increased prices. What a difference a year-18 months can make!

On the lighter side, Mmmbeeer's post about $1 houses made me smile in memory of a recent listing. A condo for only $1. It didn't sell and was later taken off the market. Not much more a seller can do at that price point.

Here is a link that might be useful: Laguna Woods Condo Selling for $1

    Bookmark   April 17, 2013 at 1:31AM
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I want to answer both from a seller and from a buyer perspective since I've been in both sets of shoes in the last couple of years.

As a seller - your market reminds me of the one we had. Long days on market for many sellers and many sellers weren't budging much on price. We were in the top 5% of the market. There were not a lot of close comps to us. There were houses even higher above us (we were in the 500s and those were 600s and above) and houses in the 400s. There weren't all that many in the 500s. Few houses were selling. A lot of houses were being listed for awhile then just being taken off the market.

I pored over comps trying to make rhyme or reason out of them. I did find that some of those that listed for a long time with no or few price reductions would eventually sell ... for about 20% under the original price. There were a few houses that sold quickly - a very few. There were a few houses that eventually sold for something within 10% of the original listing price. A few of these were houses obviously priced for quick sale, sometimes corporate relos. (Foreclosures were not common in the area). Occasionally (rarely really) someone would have a house on the market a couple of years and sell it within 10% of original listing price, but that was by far less likely than the slow bleeding to get to 20% below the original price.

We originally priced at what we thought was a good price (we wanted to sell quickly and were willing to price low). It was clear within a few months it was too high and we lowered the price. We nonetheless had several second and third showings...but to no avail. Eventually the listing expired and we took it off the market a few months.

When we brought it back we lowered the price significantly from something around $530k to just under $500k. In a way I was reluctant to do it. I was willing to sell near that price, but I was very afraid someone would come in and want another 10% off which I wasn't willing to do. If I was going to list under $500k I had to get an offer very close to that.

I did list just below $500k and we had a lot of showings and had a reasonable offer within a few days. The thing is that when we went into the under $500k group our house became much more desirable.

As a buyer - I only have so much time and energy I want to spend in looking at houses and offering on them. If I see an overpriced house I will often have one of two thoughts. If the house is newly listed I will figure that the seller doesn't realize yet that it is overpriced and I will make a note of the house and will look back to see if the seller reduces the price. Until then, though, I figure it is probably a waste of time until the seller gets educated (obviously I don't mean a house that is a few thousand over...I mean one that is significantly over).

On the other hand if the house has been listed for awhile and the price is too high I figure that the seller isn't amenable to being educated and is unreasonable. I will, however, look at price history on the house. If the seller has reduced the price already a couple of times then I figure the seller is a serious seller and might be willing to come to a reasonable price.

When we bought our current house we made an offer on a house that had been on the market several months with, I think, one small price reduction. I felt the house was overpriced by about 5% or more and made an offer accordingly. We wasted a lot of time negotiating trying to make a deal happen to have the seller essentially want almost full price. We walked and went under contract on the house we ultimately bought. While we were under contract the other agent contacted our agent to see if we were still interested and wanted to make another offer on the original house. Of course, we didn't want to.

I had this same thing happen once before. Made an offer on overpriced house. Seller wouldn't even counter. We went under contract on a different house and seller's agent on original house came back and wanted to negotiate.

The point is that people who sit on an overpriced house for a long time with no price reductions in my experience are unreasonable sellers and it isn't worth my time to beat my head against a stone wall. There was another house we saw that I loved in the pictures and listing. But it was overpriced and had a price reduction of $1 in over a year. We didn't even bother to go see it.

This post was edited by kats_meow on Wed, Apr 17, 13 at 1:46

    Bookmark   April 17, 2013 at 1:44AM
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Your market supplied two good buyers that bought homes similar to yours, at about the same price. One buyer saw more value with a basement, and the other buyer saw more value with buying a home closer to town.
Your market is supplying you at least one buyers every 2.5 months, You need to capture the next one by offering more value.
Weedy wrote:
"I wonder why someone seriously considering our house, if they thought it was overpriced, wouldn't just offer what they thought it was worth."
For some reason, they rarely will offer. Your home ends up "coming in second place" again and again.
Be convinced.

    Bookmark   April 17, 2013 at 4:31AM
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NC: correction: our home doesn't keep coming in second place. That's what perplexes me. None of them have bought something else (unless it's been >100K less, as I haven't been monitoring that range).

sweet-tea: we have a 3-car garage with an extra deep bay for a workshop (so 3 1/2 car, really), not a 2-car (I agree a 2-car would be a serious detractor). The comps $100K down the price range are still nice homes, but typically less square footage, smaller non-lake lots and 10-15 years old with accompanying finishes (nice at the time, but slightly to medium-dated now). Houses less than 10 years old with at least 4000 sf are higher than our price by $50K+ except for one subdivision that's nice and newer but a less desirable school district.

BTW, you do make a good point that the plain exterior does justify a lower comp. How much I have no idea.

In any case, the reason for my post is to figure out, given the dynamics I'm observing in this market, whether a 3-5% price drop will shake anyone off the fence. I'm hearing one rationale from several of you that does seem rational: a price drop signals that we're not stubborn on price and will negotiate. And given that we've got some past viewers that haven't yet bought, it gives our agents an excuse to go back to them all and try to reel them in.

I'm actually leaning towards Tony's advice to start with the 3% drop and follow on with another 2% if that doesn't stir things up sufficiently.

    Bookmark   April 17, 2013 at 9:03AM
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5% over the price is fine. But you have to be 5% over the price that the house is actually worth, for it all to work. You have to offer more value in order to catch that next buyer that will fill your buyer pool over the next 2.5 months.
Can you stand to wait ANOTHER 2.5 months after this one if you are not the next house that sells?
Kirkhall and Sweet Tea's advice was sound. As was the poster who spoke in regards tothe fact that your elevation and curb appeal do not match up to your current price.

    Bookmark   April 17, 2013 at 9:08AM
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Weedy, I don't remember your price... but, is it possible, that you are not only in the upper 10% in your area, but you are also in jumbo loan territory? whereas, a smaller price drop takes you into conventional loan territory?

That is another reason people will drop to the next lower price tier. Just 5 or 10K and move them over the conventional/jumbo line. You need to find out what your jumbo line is (in our area, it is higher because we have a higher COL, so I am not even sure what the "normal" line is).

And, your house was *at least* second place for those other 2 buyers. You are only looking at the fence sitters, but NC was referring to the 2 that actually bought.

    Bookmark   April 17, 2013 at 12:03PM
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I am rooting for you to sell your home soon! I admire you for keeping such a good eye on what's going on in your area, and for starting this conversation. It will help a lot of people in similar situations to be able to think through their options better. I've been following your story and I keep hoping that the market will pick up in your area, like it has in others, and that you will get an offer soon. Let us know how it all works out.
You stated: "Option B: Drop it 5%, to what the comps tell us we'll sell for. This also gets us to a round number which should theoretically bring in the next lower tier of buyers. Except that the reverse lookup says the same number of people are looking at our current price, at 5% less (the round number), and at 8% less, so I'm not sure in this case it expands the pool"

Just wondering, wouldn't dropping the price to the next tier double your pool of buyers? Those who are in your tier now now will see the drop, and those who are in the new lower tier will now have you on their radar.

I always look about $100,000 below what I can afford, just to see if there are any bargins out there, but I will not look above what I can afford.

Best of luck with all your decision making.

    Bookmark   April 17, 2013 at 2:48PM
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Sophie Wheeler

What is a year's worth of carrying costs? Not just the mortgage. Insurance. Utilities. Maintenance. Yard work. Travel time and costs. Add all of that up. Do the math as to the real costs, not just the obvious ones.

If you want to sell NOW, then drop the price by that amount. If you want to hold out and spend all of that in the meantime in the hope that you will still come out ahead.......good luck. You are NOT a motivated seller. And you will wait a long time for that one buyer to come along. And probably end up with less than you would have had you dropped the price NOW.

    Bookmark   April 17, 2013 at 9:50PM
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"We've been listed with a realtor for 5 months. We're in the upper 10% price-wise, so traffic has been slow, as expected."

I think nicer weather will bring out more buyers.

Best of luck for a spring sale.

    Bookmark   April 17, 2013 at 11:08PM
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--->What is a year's worth of carrying costs? Not just the mortgage. Insurance. Utilities. Maintenance. Yard work. Travel time and costs. Add all of that up. Do the math as to the real costs, not just the obvious ones.
Wouldn't this only apply if there was a new home already purchased and therefore dual costs? Because no matter where someone lives, there are going to be expenses during that year for utilities, insurance, travel, taxes etc. Unless there is serious downsizing involved, or other large changes to the expenses taking place. And then it would only be the difference between the higher and lower expense levels. Or am I missing something in the equation?

    Bookmark   April 18, 2013 at 12:26AM
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Weedy does already have a second, fixer upper purchased... but, I'm not sure it is really habitable atm, IIRC.

    Bookmark   April 18, 2013 at 12:58AM
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Ah, thank you, kirkhall. Sometimes it is difficult to keep all of the details behind the various threads straight. Especially when they are offshoots from other threads that contain the information. :)

    Bookmark   April 18, 2013 at 2:09AM
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The "new" house cost us $14K. It won't be our permanent home, it's something to keep us busy on the weekends. :-) So I consider our carrying costs to be $1000/mo (interest on current mortgage). Principal we'll get back; equity we'll invest into another home after selling; taxes will go up in our new state, even with a smaller home. Utilities will go down, so add a couple hundred.

That's why we're not desperate. But that doesn't mean we wouldn't like to sell!

    Bookmark   April 18, 2013 at 7:45AM
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Just figure out your TIMING, and then you will know what to price it.
You should be hailed as GW OP of the year award to come back and set us all up with a new thread called "Should we adjust price?" After all, you know that, for some reason, your posts get a lot of attention. This one will too.

    Bookmark   April 18, 2013 at 9:13AM
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I had a listing recently that started a bit overpriced. We got a few showings and good feedback. After a while (30 days), I convinced the sellers to drop the price a bit. We got a lot of showings. Feedback often said my buyers liked this house, but chose another one.

We tweaked the price just a bit more (but enough to make my sellers flinch) and were under contract within a week. The property closed and my sellers LOVE that they only own one home and it's not that one.

    Bookmark   April 18, 2013 at 9:44PM
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I think you already know the answer, which is why you came here to ask even though you said right at the start that you think people here jump to "drop the price" too fast. If your home hasn't sold in 5 months in a market that is heating up in most places, there is something wrong - and that something is that the price is too high for the perceived value. I am sorry I know it's not what you want to hear, but it may be what you need to hear.

    Bookmark   April 18, 2013 at 11:48PM
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The market value of your home is not the price you are willing to sell at. It is not the price your realtor puts it on the market for. It is not the price "comparable" homes sell for. It is not the cost you paid for it, plus all you have invested into it.

The market value of your home is the price a buyer is willing to pay. You can argue this all day long. If you say your house is worth $400,000, yet the most anyone is willing to pay is $300,000, then the value of your home is $300,000.

If you really want to sell, you need to adjust your price. Some people may make a lower offer, but most buyers and realtors do not want to go through all the work of trying to figure out what your "real" price is.

If two homes are priced the same, yet one has a few "wow" upgrades even though they are otherwise identical, most will buy the house with the "wow" upgrades. But if you expect them to pay for your "wow" most will pass you by. I may like some of the things you have upgraded, but they are probably not on my list of must haves when I am looking at homes.

Your house is worth what a well qualifed buyer is willing to pay today. End of story.

A realtor in our area was trying to keep his listing "new" so he continually put in a price change of $1. No one looked at that house. All the realtors can see the history, and they knew what he was doing. If you really want to sell, reduce your price by 5%, if it does not sell at that point then you reduce it another 5% until you find the true "market" value of your home.

    Bookmark   April 19, 2013 at 9:58AM
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It frustrates me to no end that a home seller's only real tool is lowering the price, but as soon as that sign goes up, the clock starts ticking in a negative way. You might get lucky and someone will love it straight off, but as 30, 60, 90 days pass, the buyers just assume you are overpriced, even if your appraisal says otherwise.

My house went under contract in an unconventional way, but I was prepared to list our house right off the bat for 25,000 (about 5%) less than the realtor wanted to list it to make the house more attractive to buyers and make it immediately tempting. I figured I was the only one who could turn it into a "win" or "lose" situation and if I chose not to do that by not concentrating on whether our paper equity was $200,000 or $175,000, it would be better for my mental, physical and (long term) fiscal heath.

I found a house that I thought was pretty great for us (although not a perfect location - a different K-5 school, but same junior high and high school), but based upon space and taxes, it's almost $100,000 overpriced. It's got high end finishes and the owners are likely trying to recoup based upon the money put into the house, but I don't even know if it would appraise out to what they want to sell it for. I know that I certainly like the "wow" finishes, but I'm not willing to pay that kind of money for them. We decided that unless it comes down $50,000 during our house hunting adventure, we won't even make an offer because it would just be insulting to the current owners. We have to live in this town and it's like six degrees of Kevin Bacon; we may not know these owners, but someone we know likely knows them.

I don't know if that's helpful at all, but it may be a reason why people don't want to just "make an offer".

    Bookmark   April 19, 2013 at 11:48AM
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You need either:

- the right buyers - the ones for whom your house is *perfect* and a few % points on the price won't be the deal breaker, or
- the right deal on a house that's 'close enough at the right price'.

Seems that none of the 'perfect house for me' buyers have materialized yet as you haven't received any offers. And the buyers that have been interested haven't offered -- so for them, the deal hasn't been good enough.

The point was raised that even a 10% drop may not be enough -- that 20% was what it eventually took to trigger a sale. I don't know what your market is like, but in mine, that's about right. Here, houses tend to sell at about 10% below the listing price, so if you're more that 10% over what a buyer is willing to pay, they probably won't even make an offer because there's little expectation a deal can be made to work.

What's the selling price range of houses with similar front elevations to yours? As has been mentioned, that's a huge issue -- People who are shopping in that price range will accept the less-upscale front (they kind of have to...) but could be enticed by the larger size and lake front. For them, your house is a big improvement, and could tempt them to spend more than they had planned. In other words, position yourself as the nicest house in the bunch rather than the least expensive.

    Bookmark   April 19, 2013 at 3:37PM
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@ mamaattorney
"It frustrates me to no end that a home seller's only real tool is lowering the price, but as soon as that sign goes up, the clock starts ticking in a negative way. You might get lucky and someone will love it straight off, but as 30, 60, 90 days pass, the buyers just assume you are overpriced, even if your appraisal says otherwise."

At 90+ DOM, that original appraisal may no longer be accurate. Regardless, buyers set a homes market value in almost any market. Even in a "sellers" market, it's the buyers that drive higher-than-list offers.

    Bookmark   April 20, 2013 at 4:27PM
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The market value of your home is the price a buyer is willing to pay. You can argue this all day long. If you say your house is worth $400,000, yet the most anyone is willing to pay is $300,000, then the value of your home is $300,000.

This can't be stated enough. The market decides what a home is worth. Not your realtor, not the appraiser, not the inspector. There is a certain buying pool, in any given timeframe. And when they have shopped around, seen the competition, and are influenced by outside factors (they feel they must move but foresee their salaries will be stagnant in the upcoming years, they have a dim view of the economy in general, they feel they have the advantage when there is a large inventory but few serious buyers) these buyers, along with their general outlook, set prices for the market.

    Bookmark   April 20, 2013 at 10:46PM
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It all depends on when you want to sell the house. If I recall correctly, you put this house on the market sometime last spring, FSBO, so you have been trying to sell it for nearly a year. Have you had any offers yet?

If you haven't had an offer at all, I think there's a message there. And one possible message that is that the price is too high.

    Bookmark   April 21, 2013 at 3:25PM
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