New here and need advice about pricing.

cbusmomof3August 3, 2011

Hi everyone. I just stumbled upon this website and have already learned so much. We have bought a lot, are in the process of designing a semi- custom house, and we're just about ready to list our current house. Our realty team has said we should start at $339K and then drop it if we need to after a few weeks if activity is slow. Seemed high to me but was willing to trust the experts, who know my husband very well professionally.

Here is the problem, we just saw online that the short sale house at the corner of our cull-de-sac just dropped their price from $299K to $249K. We know this family and they actually have another house in a connecting neighborhood (newer) that they have listed for $440K. They had been renting out the house on our street for the last two years. We're not sure what happened with them financially. Anyway, we cannot sell our house for less than $315K but really hoped for $320.

A little bit about our house...It is 2700 sq ft not including the finished basement, 4 bed, 2.5 bath, sits at the back of a quiet cul-de-sac on a large wooded lot, all bathrooms have been gutted and remodeled within the last year. Master has a full frameless shower and it truly is beautiful, probably much better than what we will be able to put in our new house :-(. Decor is neutral and tasteful, again, according to experts. Rooms are good sizes, master is HUGE. Kitchen is updated with granite counters, SS, and is a wonderfully functional kitchen. Best part is that the sink faces into the breakfast room that has two walls of windows so you have a great view of the backyard. Ceilings are 8' but we do have a very nice 2 story foyer, which most houses in this neighborhood do not. It really is a great house for a family with two kids. Our bigger family just needs more space.

So, do we stick with the price our realtor suggests or do we need to lower it? Nobody we have talked to thinks the bank will accept the new $249K price of the short sale so it probably won't be a comp at that. Not a lot of recent sales around here to compare but some are listed at $315K, $449K, $399K, $420K. We just want it to sell quickly so we can start and for at least what we owe on it. Don't have to sell though, because we can sit on our new lot for as long as need be. Thanks for any advice.

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spend a few hundred dollars and get an appriasal from an appraiser. tell them you are selling and need to know market value so you can set asking price. Your agents sound like they want to overprice it if they already want to lower it. That is worse than priced properly from the start.

What you need to get from this home really has nothing to do with what the market price. If the appriaser says it is worth XYZ and if that is a lot lower than your "gotta have" price, then you have to talk about a short sale or selling and bringing money to the table or waiting it out. if you price too high, you sit on the market for years.

    Bookmark   August 3, 2011 at 11:39AM
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It is so hard to give pricing advice online - without seeing the home and comps.

It sounds like your agents are counting on people offering below list price which is common. In my area, ON AVERAGE, homes sell for about 95% of list price. So 95% of a $339K list price will get you near your goal - in theory. But that may not be realistic.

If your gut says $339 is too high, then I would consider lowering it. We listed our house this past spring and, after thinking about it and checking comps more closely, decided to list about 4% lower than our agent initially suggested. (He totally supported the lower list price though after we suggested it.) We were under contract within 4 day at about $10K lower than our list price.

On thing though - is that even lowering your price to $320K isn't going really going to open you up to more potential buyers though - in the sense that people tend to search in $50K increments, I believe.

    Bookmark   August 3, 2011 at 1:29PM
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When I was pricing my house, I not only got some comps from an agent (I'm a FSBO) but I also researched my active competition. I didn't bother anyone by trying to see the insides of their houses, but I did drive-bys and studied the listings. Seeing my competition in real life caused me to lower the price of my house about 15% from what I thought it should have been at initially--and I had looked at the listings. I think it's very important to see what you're up against in real life. You can't necessarily go by the short sale down the block unless it's really comparable to yours. I try to price my houses to sell even if I don't HAVE to sell them because I'm just not one to fart around. I think my method is working because I keep "selling" my house. Buyers being able to actually get a mortgage is another story...

    Bookmark   August 3, 2011 at 11:15PM
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If you want to sell it rather than just listing it, then get an appraisal and then put your price 10-15% below that. Just be aware that an appraisal may be well below your "gotta have" number. The market is impersonal and doesn't care about gotta haves. But it's a red flag that any home in your neighborhood would be listed at 100K below yours. Either it's a totally damaged teardown being sold for the land value, or everyone else is overpriced for the market. Including you. I'd bet that a closer appraisal number would be 299 rather than 339. Homes values in a neighborhood tend to cluster around a mean rather than being wildly diverse. You need to view your competition in person as well as have that appraisal done.

    Bookmark   August 4, 2011 at 12:34AM
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"What you need to get from this home really has nothing to do with what the market price [is]."

This bears repeating.

I would price aggressively from the very beginning.
You only get one chance at being the new house on the market- to wait and then lower it in increments is wasting time IMO.
Take a moment and think about the stress of not having sold it in xx months- avoiding that seems worth something to me unless you are prepared to sit on the new lot for years.

Get out there and look at comps yourself- I would want first hand impressions of everything that has sold.
Then get the appraisal, crunch your numbers again and make it work.

    Bookmark   August 4, 2011 at 8:53AM
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Thanks everyone. We have been through a few of the houses for sale in our neighborhood and honestly, they don't really compare for a number of reasons. Lot, quality, style. Style is big. A lot of 80's oak trim. We are one of the only houses that has wide maple trim. It's one of the reasons I bought the house. There are some that have narrow painted trim that are as nice as ours, but they're listed in the $400s.

The realtor is still confident at $339 and my husband has talked to a couple appraisers and other realtors and they are sure the bank won't accept the short sale at $249. They think they're just trying to generate interest and they also said that when looking at comps they throw out any anomaly, high or low, so if it sold at that it wouldn't even be a comp.

Now, there is a valid comp that sold for $299. But, it is on a busy street off of a VERY busy street, and the driveway is almost at a 90 degree angle. So, who knows?

That said, I hear what you're all saying and I think I would feel better at $325, but everyone who comes in our house has agreed that $339 is the right price, despite the short sale. I guess I will just have to trust the experts who know our market and our property. We shall see. I am leaving for a week vacation with the kids and when I get home it will be on the market. Wish us luck. If you all end up to be correct, feel free to tell me you told me so. Just do it gently :-)

    Bookmark   August 4, 2011 at 9:05PM
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Price at what you need to get out of it, and realize you may have to go lower. Do not miss the golden opportunity of being a NEW LISTING. Who knows? You could spark a bidding war by listing lower!

The short sale will probably affect a buyer's ability to obtain a mortgage on your house.

What would happen if you had a buyer who wanted to close in 30 days? Your new house is just in the planning stages, right? (Wondering why you're listing now.)

    Bookmark   August 5, 2011 at 1:04PM
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Listing now in case it takes awhile. If we are fortunate enough that it sells quickly, we will live with my very kind parents. Not ideal, at least for the four adults involved, but my kids would be thrilled.

    Bookmark   August 5, 2011 at 5:54PM
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what is the price for a comparable house that has 80s oak trim, versus your home?

    Bookmark   August 6, 2011 at 3:51PM
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The house with 80's oak trim is currently listed at $319K.

But, we listed last Wednesday at $339 and today we got a decent offer and just heard from our realtor that a couple that saw it tonight is going to put in an offer in the morning. We have had a total of 5 showings in 4 days and one offer and a probable second offer. We feel pretty good about the price now. Thanks for all of the advice! Fingers crossed we can get into contract soon and make it to closing with little complication.

    Bookmark   August 13, 2011 at 10:39PM
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Well, a full price offer minus closing costs came in this morning. Think we will take it!

    Bookmark   August 14, 2011 at 11:56AM
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Congratulations!!! from a seller who has had a house on the market for a year and lowered the price three times already. Thinking of taking it off of the market for the winter and re-listing with a different realtor in the spring.

    Bookmark   August 14, 2011 at 12:41PM
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Thanks Phoggie! Now we just have the stress of temporary housiing and moving twice. Much better than the alternative though. Good luck to you.

    Bookmark   August 16, 2011 at 8:16AM
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Excellent news!

    Bookmark   August 16, 2011 at 12:16PM
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