After three weeks on the market...

herusApril 19, 2010

OK 3.5 weeks... we have had 6 showings, two of which were to the same buyer so that really means 5. I spoke with each of the agents that brought the buyers through (we are listed with a flat-fee agent, which worked for us last time so we figured let's do it again).

All the agents said the buyers liked the home very much. One picked on certain things, which can be changed but at expense (eg height of granite countertop) and some which cannot (size of master closet - too small). But all reported very favorable reactions to the cleanliness, the lack of clutter, the special features of the house, the yard and landscaping, the view, etc. When pressed one or two said *maybe* the price is a little on the high side but not by much. At least 3 of the buyers went on to buy a new home with fewer features and/or lesser location. This is hard to compete against, as our home is 17 years old (but immaculate and fully updated).

While we are not in a HUGE hurry we would like to close by around mid-July, else the reason for selling more or less goes away and we might as well stay put. We are not financially distressed, in fact there is no mortgage, and we are thankfully still employed.

At our current asking price and without paying any commission, we will come close to breaking even but not quite. So we know we will lose money (bought in early 2007) but the question is how much. We are very much aware of the market and know lots of people are losing their shirts, but our small area has not suffered much and we have upgraded the home considerably.

We know we have covered all the bases regarding the house itself. Really, the house shows beautifully, everything is in good condition and of quality, and the house itself needs nothing. I don't just say this myself but it is the opinion of a realtor friend (who is too close a friend to do business with, and we mutually agree on this) as well as the 3 or 4 realtors who we interviewed prior to going with the flat-fee. And the ones who showed it.

So... if the argument goes (and I'm not saying it does) that after 5 showings there should be an offer and if there isn't then it must be the price, we are considering one or both of two strategies.

One, reduce the price by around 4%, or $25K. The other, offer the buyer's agent a bonus, either .5% or $5000 (the latter is a larger figure). The buyer's agent at the moment is slated to receive 3%, very much standard in this market.

The problem in reducing the price is this leaves us almost no room for negotiation IF we aim to get a certain figure. Of course, we could just accept less, but we aren't mentally there yet. With the realtor spiff, we're thinking it could nudge some out there to focus on our home. I realize this can be a hot topic, with discussion of ethics etc (a realtor should show the house regardless of commission, but we all know that realtors don't show FSBOs where there is no agent commission, so why wouldn't it work on the other end of the monetary spectrum?)

So, what would you do? As a third strategy we could just... wait.

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I guess it just depends on how much you want to sell, and how fast. If you want to get it overwith, then lower your price by 5-10%. If not, don't.

    Bookmark   April 19, 2010 at 10:28PM
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I would give it more time.


    Bookmark   April 19, 2010 at 10:58PM
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If your house is not overpriced and unless dropping your price will put you into a new search bracket, I wouldn't bother. Buyers know it's a buyers market and will bid accordingly.

Like mentioned above, you just may need some more time. As a current buyer, in the last week alone I saw three houses that I would be willing to buy. I can only put an offer in on one, though, and one in particular was on a street in a location that I preferred over the others.

In most areas of the country, there are a LOT of options to sift through, and swinging into the post-tax credit summer most markets are going to be slammed with even more homes sitting for sale.

    Bookmark   April 20, 2010 at 7:39AM
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I don't know who told you that 5 showings equals an offer, but I'm pretty sure they weren't trying to sell a house in 2010. It is a buyers market with most of the buyers still bargain shopping.

As for all the other stuff about you breaking even - just quit thinking about it. You lost money. It already happened and there is nothing you can do about it at this point. Going forward, if you want to sell at current market prices - sell. If not - don't sell.

    Bookmark   April 20, 2010 at 9:10AM
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Given that no one addressed increasing the commission, I'd assume this is not a useful strategy?

I'm aware of the market etc. We're not trying to break even, just minimize losses. Like I indicated, if the loss gets to the point where it's not digestible, we'll pass. But it makes no sense to give away everything on the first go.

    Bookmark   April 20, 2010 at 10:31AM
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I think there is several posts on here if you search that discusses increasing the buyer's agent pay.

I'm of the opinion that it never hurts to try, but also as a buyer I wouldn't have gone to see your house unless I was interested in it to start with.

    Bookmark   April 20, 2010 at 10:48AM
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I don't think that a price reduction from $625k to $600k will have much of an impact, if any. At that price point, I think that you'd have to come down to $575k to bring in new potential buyers or to entice your prsent lookers to write offers.

On a side note, I don't know where you live, and I realize that there are pockets of the country where the housing bust hasn't affected prices in a major way. But I can't think of an area where the price of houses is over half a million dollars where that would be true. (But what do I know?) It's just difficult for me to believe that a house purchased in early 2007 in the neighborhood of $625k would still be worth $625k in eary 2010. Are you sure you're not overpriced?

    Bookmark   April 20, 2010 at 11:13AM
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I don't think 3 weeks is that long at all unless realtors are telling you the price is too high. I would wait a little longer. We have been on the market 7 weeks and just dropped the price and added an extra percent commission. If it gets our house sold we are all for the bonus.

    Bookmark   April 20, 2010 at 12:51PM
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I'm thinking along the lines of bethesdamadman. Have you looked at your competition at the $625K price?

In my area, houses in that price range are selling much more slowly than those at half the price. The first time buyers are out there, the step-up market is lagging.

    Bookmark   April 20, 2010 at 4:28PM
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I guess I'm confused as to why 4 months of your time is worth losing 25-50K over? If "the reason for selling" goes away in July, then why on earth are you trying to sell? It doesn't make sense to take that big a loss if you'd stay put after July anyway? Pull your home off the market and let July come and go without the stress and financial loss of trying to sell.

    Bookmark   April 20, 2010 at 10:26PM
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I just put my house on the market this week and if I only had 5 showings in almost 4 weeks I am pretty sure I would reduce the price particularly if there was nothing else negative about the house. The last house I sold (in a good, but not bubble market, 4 years ago) we probably had 20 showings before we received a very good offer. But we steadily had a lot of showings and good feedback.

I disagree that a reduction from $625 to $600k wouldn't have an impact. I know that when I've looked at houses I pick a number that I won't look higher than. In fact when we bought the house we are selling I would have looked at a house listed at $600k but not one listed at $625.

I think a price reduction has more impact than a higher commission. For the past 2 houses we bought, we found them ourselves on the MLS listings and had our agent show them to us. A higher commission would have been a total waste as we were driving the bus on what houses we wanted to see, not the agent. Most people I know are the same....they now do their own looking instead of just relying on the realtor.

    Bookmark   April 22, 2010 at 8:45PM
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In my search for homes, I too have noticed that many have not reduced their prices at all from their original purchase price... even though they purchased their home in 2004 to 2007. (I check the county property records online)

In fact, most are asking *more* for their homes than they paid a few years ago.

When I have mentioned this, the buyer's agent has sometimes said (something like), "yes... that's true... I have talked to the seller about that."

For me, the theory goes like this:
I sell *my* house at a loss..but my next home purchase will be sold in the same way... so it really isn't much of a loss.

    Bookmark   April 24, 2010 at 5:40PM
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Is a 3.5 week wait for an offer unusual in your area? That would be considered 'just getting started' in most areas I know of right now. We sold in December after 9 months on the market.

I'd look at what the average time to sell is in your area as well as comps (comps are most important). Don't worry about what people are asking for their house, all that matters is what they sell it for.

Good luck!

    Bookmark   April 24, 2010 at 9:22PM
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