Do realtors only want to sell bank owned properties?

cymraesAugust 1, 2011

I am beyond frustrated with my realtor. She is young, but when we listed with her, she seemed to be aggressive. Now, 3 months later, she is saying she prefers to sell Bank owned properties and we really need to list our place the same as bank owned, even though they are not even comps. The one she is comparing ours to, is over 1000 sq. ft. smaller, not nearly the quality as ours and on 75 acres less than ours. As a buyer, I'd prefer to buy something not bank owned because it comes with a clear title and not "as is" with no disclosures. She doesn't even seem to understand what sales are all about. I guess they don't teach how to sell when they get their realtor license. We are considering pulling it off the market until next spring with the hope that the market may have improved and try to find a realtor who specializes in farm and ranch.

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maurenemm

Yeeh, I think some agents prefer to specialize in foreclosures and/or short sales. While it does sound like this particular properity is not a good "comp" for your property, the fact is that in today's market foreclosures and short-sales are affecting prices for traditional sales.

It definately sounds like you need a new agent though.

    Bookmark   August 2, 2011 at 8:53AM
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gmp3

Some of the Fannie Mae properties are offering a $1200 incentive to agents.

If your home is not distressed it shouldn't be priced as a distressed property. Bank owned properties have often been neglected for years because the owners had medical issues, personal issues and of course financial issues. Find someone who is knowledgeable about farm/ranch properties.

Sounds like she wants a quick sale. Wasn't there a Freakenomics study that realtors keep their personal homes on the market longer but get 10% thant they do for their clients?

    Bookmark   August 2, 2011 at 9:15AM
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brickeyee

"we really need to list our place the same as bank owned"

That will driv3e off a LOT of buyers who do not want to go through the hassles.
Some banks are better, but most of the time they slow things down (sometimes for months to years).

    Bookmark   August 2, 2011 at 10:05AM
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Billl

Farms are a very specific segment, so you probably should list with someone with lots of experience there. Your buyer pool is a tiny segment of the population and you need an agent that can tap into that.

As for preferring to work with bank owned properties, some people might, but that certainly isn't the norm. In today's market, I can't say I blame her though. Banks don't have sentimental attachment to property and it's former worth. Most private sellers still haven't accepted how much their property is really worth today. The market is cluttered with overpriced homes that sit for years while properly priced property sells around them.

    Bookmark   August 2, 2011 at 10:51AM
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cymraes

Thank you for everyone's input. I know we were over-priced (for today's market) when we first listed, but we dropped our price $225,000 and I think we are priced appropriately. There are several farms near us priced lower, but the homes are not the custom quality as ours, and there are also several priced higher. Our realtor is basically suggesting we sell for the cost of our land, and throw in a half million dollar house, barn, riding arena, etc. for free. We are not desperate and are not willing to do that. Hearing that there is a possible incentive to sell bank owned explains a lot. I feel that some of these realtors are like vultures, just waiting for everyone to turn their properties over to the bank.

    Bookmark   August 2, 2011 at 11:22AM
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cmarlin20

None of us here know the condition or value of your property. If you do not have confidence in your agent, interview others, change agents.
REO is a competitor don't underestimate it.

    Bookmark   August 2, 2011 at 11:59AM
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Billl

"There are several farms near us priced lower, but the homes are not the custom quality as ours, and there are also several priced higher.'

Listed prices of other properties are of absolutely no value in determining what you should list your home at. Just get that out of your head. The only thing the listing price is going to tell you is what homes AREN'T selling for. You need to look at what homes ARE selling for. How is your property priced in comparison to what has sold recently?

    Bookmark   August 2, 2011 at 12:31PM
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cymraes

You need to look at what homes ARE selling for. How is your property priced in comparison to what has sold recently?

Not much has sold and that is the problem. There was one about a mile from us that the house was about 2500 sq. ft smaller than ours and very basic and only on 20 acres without any outbuildings, etc that sold for $475,000 (short sale). Our house, built in 2006 is 4000 sq. ft, custom, with designer everything. Has a big garage with living area, barn, riding arena, and is on 85 acres and we are asking $699 K. There was one other that sold as a REO - similiar home on 2 acres that sold for $475K as a repo.

    Bookmark   August 2, 2011 at 2:10PM
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gmp3

If you do not have to sell, hold out repos and bank owned properties tend to be run down. A bank owned on my street which is larger and the same year as mine without updates but with bank installed new carpet and refinished hardwoods sold for $345, my house which is about 700 sq foot smaller with nice (but not super lavish) upgrades sold for $470, and we side to a busy street. My house has been well maintained and needed no work, unlike the bank owned properties which typically are run down and neglected.

I don't think your price spread is too much, you just have a small pool of buyers. The time on market was probably longer for properties such as your in a good market, so it stands to reason it is worse now, I'd hang on if it makes sense for you to do so. In the meantime your agent needs to reach every potential buyer she can and it sounds like she isn't experienced in this area.

    Bookmark   August 2, 2011 at 2:53PM
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sweet_tea

How much is your 85 acres worth?

    Bookmark   August 2, 2011 at 3:34PM
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cymraes

In the current market our 85 acres is probably worth around $225,000 to maybe $250,000.

gmp - that's what I thought - bank owned tend to be run down and even missing things like lights, appliances,etc. Plus, you don't get any kind of guarantee. I think we will just hold on and look for a new, more experienced realtor.

    Bookmark   August 2, 2011 at 4:07PM
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sweet_tea

Your custom home was only custom to you. To anyone else, it is just a 4br/3ba/3cg(whatever yours is) with 4000 sq ft with XYX features. You can't expect to get back the price for all those designer features that you wanted. Buyers might not even like some of those things you paid a lot for. Your home itself might be worse less than the $500k you are valuing it at - outside of the land price. Sounds like you might be placing extra value in the home because of all the upgrades. You can only go so far with that for resale.

What would a 4000 sq foot 2006 home with standard floor plan and standard features be worth...outside of land value? Be realistic.

If you aren't sure, get an appraisal. At most, fire this agent and get one more experienced

    Bookmark   August 2, 2011 at 6:14PM
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cymraes

We are only valuing our home at $400,000 tops. We also have a $75,000 barn and a $75,000 garage/apt. Add to that the cost of the land, well, septic, roads, riding arena,etc. So, as you can see, we are selling way under our costs. We have over $900,000 invested and are not asking anywhere near that amount.

    Bookmark   August 2, 2011 at 6:34PM
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Billl

There is no such thing as a 75k garage on a farm.

Your property is only worth what someone will pay for it. If you have been at the current price for more than a couple months, you are - by definition - overpriced.

If you don't want to sell your property for what someone will pay for it, that is perfectly fine. Many people are in that situation right now. Don't kid yourself that you are going to be able to sell for more this spring though. Either keep it on the market at a price that has a chance of selling OR take it off and decide to live there for the next couple of years.

    Bookmark   August 2, 2011 at 7:25PM
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cymraes

The garage has an apartment in it. Are you an expert on farms? Do you also know all about my barn? ha. You must be psychic. We don't expect to "get more" in the spring. We want to leave it off the market so it comes on as a new listing when we decide to re-list - maybe next spring, maybe in two years - depending on the market with a farm and ranch realtor.

    Bookmark   August 2, 2011 at 8:56PM
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GreenDesigns

If a similar sized home and acreage sold at 475K, even if it was REO, then your actual home value won't be but 0-50K above that. Not all REOs are in bad shape. And they ARE your comps, whether you like it or not. It might adjust up or down a bit based on acreage, and a small bit based on condition, but it sound like you are substantially overpriced at 699K. Why should someone buy your home for 225K above what is currently being sold? Yes, yours is more "upgraded" but there is only so much people will pay for upgrades. Outbuildings aren't valued for much of anything at all in any appraisal. You may get 5K for a barn or garage, but that's it. And all of your designer choices won't get you a bump in an appraisal at all. And in today's world, a home must make appraisal for anyone to be able to have a bank loan.

So, I suggest that your first step is to hire an appraiser even before you start looking at new real estate agents. Most clients don't like hearing that they are overpriced until it slaps them in the face,so you need to know what the market truly says rather than someone who just wants to sweet talk you to get your business. (Although to be fair, your realtor sounds as though she is trying a last ditch effort to save her listing by confronting you with your being overpriced.) Knowledge is power. An appraisal will tell you if you want to go through the hassle of listing again or just sitting tight for a couple of years.

    Bookmark   August 2, 2011 at 9:26PM
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marie_ndcal

Sounds like the barn is a pole barn and yes they are expensive to build. Many of the ones here in ND have concrete floors, bathrooms, even microwaves, offices, heating and A/C etc. Not cheap, but oh so nice to be in during our ND winters. Big enough for combines etc.
Right now farms are down--here primary due to our oil boom. But property is selling.
Good luck

    Bookmark   August 2, 2011 at 9:29PM
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cymraes

GreenDesign - as I said, the REO that sold for $475,000 was 2500 sq. ft smaller than ours and on 65 less acres. So not really a comp. It had laminate counters, cheap carpet, etc. And even at only $50 a sq. ft for our additional size, that adds $125,000 to the $475,000 not even counting the additional 65 acres. I do think appraisers take all that into consideration.

    Bookmark   August 2, 2011 at 11:02PM
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gmp3

You need a realtor who is exposing you to your buyer pool. Your buyer pool is considerably smaller than that of a typical suburban home. I disagree that if you haven't sold in 3 months you are absolutely overpriced. Maybe you are, maybe the right buyer hasn't seen your property.

How many showings have you had? Did you get feedback?

You don't know that your realtor was exposing you to the right buyers. Did she have professional pictures taken of your home? If you google your address how many websites show up? Does she have the maximum number of pictures, etc.? Is there a home tour of your house a website just for your home? My realtor had all of these tools and I have a typical suburban home.

    Bookmark   August 2, 2011 at 11:22PM
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ncrealestateguy

GMP3 wrote:

"Wasn't there a Freakenomics study that realtors keep their personal homes on the market longer but get 10% thant they do for their clients?"

This would be impossible to scientifically prove.

CYMREAS,
It sounds to me that your agent was trying to break the ice to you that she thinks the buyers are telling you all that the property is overpriced, given the most recent comps. It is one of the most difficult responsibilities that we have towards our clients. Some are better at it than others.You better believe that the appraiser and the buyers are using REOs and short sales as comps. They will, however, adjust for sq. ftg. and acerage differences.
BTW, if you are not on the market, you are not going to sell. Next Spring is not going to be any easier, as far as finding good buyers is concerned.

    Bookmark   August 3, 2011 at 6:42AM
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Billl

""Wasn't there a Freakenomics study that realtors keep their personal homes on the market longer but get 10% thant they do for their clients?"

This would be impossible to scientifically prove. "

Actually, no - it wouldn't be impossible. The freaknomics authors did just that. Everything you need is available in public records and the MLS.

"The garage has an apartment in it. Are you an expert on farms? Do you also know all about my barn? ha. You must be psychic. "

No, not a psychic. Just someone who knows a little about pricing. Your garage isn't worth anywhere close to what you paid for it. You very well might have put $75k into it. Heck, you can put $75k into a bathroom remodel if you want. That doesn't mean it raises your overall property value anywhere close to that.

If you want people to comment on the specifics, just post a link to your MLS listing. Until then, the only possible thing to tell you is that if your house isn't selling, then you are offering it for more than your buyer pool is willing to pay. There might be something you can do to increase your buyer pool or make your house more attractive, but unless you can/will do that, the bottom line is going to be price, price, price.

    Bookmark   August 3, 2011 at 8:31AM
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cymraes

"You don't know that your realtor was exposing you to the right buyers. Did she have professional pictures taken of your home? If you google your address how many websites show up? Does she have the maximum number of pictures, etc.? Is there a home tour of your house a website just for your home? My realtor had all of these tools and I have a typical suburban home. "

No, she did not have professional photos - in fact the only photos she is using are ones I provided her. No home tour.
We've had 3 showings and all gave positive feedback. The first ones said the house was exactly what they want but the location was too rural. The next ones also loved the entire place, but had teenagers and didn't feel the school offered what they needed and the last ones also said they loved it and said they were deciding between ours and my close neighbors whose home is very nice, a little smaller and within a few thousand dollars in price. But that was a month ago and neither of us have received an offer.

    Bookmark   August 3, 2011 at 10:33AM
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ncrealestateguy

Cymares,
When I hear of a property always coming in second place, it tells me that the sellers are close to a right price, but not quite low enough in order to get into first place. Chances are, a small price reduction would bump you into first place.
Like Bill says, a two car garage here in NC appraises at about $10,000. I do not know how a barn would valuate.

    Bookmark   August 3, 2011 at 7:33PM
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mojomom

Definitely retain a realtor the specializes in farmland. What type of farm is it? In many areas of the country farmland is in a boom. If it is the right type of land you might even think about separating the house and x acres from the farmland. Someone specializing in your type of farms in your area could give the best advice. I'm from a row crop area of the country and most investors aren't interested in houses because the are looking at the farm as strictly roi. But that doesn't mean that there might not be somebody out there that would love the house plus a few acres without having to purchase the entire farm. Only a local realtor with experience with your type of operation can tell you the market and best way to handle.

    Bookmark   August 3, 2011 at 8:16PM
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LoveInTheHouse

I know plenty of horse farms with barns and/or garage/apartments worth $75,000 or more. I don't know whether your place is overpriced or not, but I do know that you have a unique property that needs a certain type of buyer who needs your barn and even if you are in Oklahoma or Texas, these kinds of sales take a little longer even in good times. Also, your price range is at the high end in this economy. I think properties that cost that much money are moving slower in general. However, I'd expect at least one offer in the three months. Maybe your price is too high. Or maybe your realtor hasn't advertised it to the people who are looking for a farm and they don't know about it. Where is she advertising it? Why don't you post the link to the listing? I'm pretty familiar with horse properties for sale and I'd love to give you my opinion if I can.

    Bookmark   August 3, 2011 at 11:57PM
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live_wire_oak

3 showings in 3 months is pretty telling as is the "buts" that the viewers mentioned. Anytime a viewer says that they love it but... what they really mean is that the price would have to be lower to cancel out that but.

Your new agent will need to work to give you an accurate assessment of the market and you will have to be open to what you may be told. Anyone who tells you that your home is "worth" 925K and then you have to drop it 225K to get even 3 showings is either clueless or doesn't have enough gumption to tell you the truth about the pricing that you don't want to hear.

Any home priced 500K above those of it's neighbors, even if they are smaller and with less acreage, is an anomaly for the area. As such, there may be no true accurate comps. That always bodes poorly for the most expensive home surrounded by less expensive ones. In real estate, location is everything. It counts more than amenities. It counts more than acreage. A million dollar custom home in the middle of a nowhere cornfield in agricultural Iowa surrounded by modest homes that price out at less than 100K will have a very hard time even selling for 300K. Put that same house in a tony Detroit suburb where homes go for twice that price, and you might get well above the 1M because of the location and the value of it being the cheapest house in the neighborhood. You can't escape your location. All you can do is price it low enough that the location is enticing.

    Bookmark   August 4, 2011 at 12:18AM
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brickeyee

The three most important things to determine price....

Location.
Location.
Location.

    Bookmark   August 4, 2011 at 10:50AM
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