Location, pricing and refreshing the kitchen

hunanmomOctober 26, 2013

We've had our 1800 sqft house on the market since early September. The house sits on a flag lot behind a home on the main (not too busy) road, and we share a driveway with a small house behind us - we own the driveway and give them right-of-way. Our quiet and private (and safe) house has a yard on four sides, looks great when you come down the driveway, and has a wonderful floor plan. We're in a stable neighborhood with great schools and are located just a short walk away from one of our city's "hot" neighborhoods. We've had approximately 20 showings since we listed, 3 open houses with good turnouts, but absolutely no interest in actually purchasing the house - no offers, and no second showings either. Feedback has been that viewers like the house, but don't like the location, the size of the yard, the driveway, etc. which we understand. Other comparable houses in the area have moved quickly, some in less than 30 days and now our current comps are what I call the "loser" houses, homes that need serious/major work done on them, or are located on a busy corner, etc.

We believe we are overpriced, but our agent (and others that have come through) think the price is right where it should be. Our agent actually thought our house would be snapped up (it's got that great floorplan) at the original price, and that we would likely get offers above the asking price. We lowered the price two weeks ago by $10K, but interest has actually been less than it was at the opening price. We plan on taking the house off the market in early November, and then relisting next February.

In the 8 years we have owned the home, we have updated everything except the kitchen and upstairs bathrooms. They are clean and functional, but still have the original low-end laminate counters, cheap cabinets, cheap vinyl flooring and the kitchen sink is chipped (appliances are higher-end stainless steel though) . We are debating now whether to "refresh" the kitchen while the house is off the market with new high-end laminate counters, new sink and faucet, and marmoleum flooring. We have a very large counter and kitchen bar area, and cost-wise granite is just out of the question as is extending the hardwood from the rest of the downstairs. The kitchen is the focal point of the downstairs, and frankly it currently just looks somewhat dated and cheap. By refreshing the counters and flooring we feel it would have a bit more pizazz and maybe have a buyer possibly thinking "I could live with this for awhile and upgrade" later. The total cost for what we want to do would be around $3,000.We would still lower the price next year, but hopefully not by as much as we might have to if we leave things as they are.

Or, we can just leave the kitchen as it is and just go with a lower price next year. We need to have the house sold no later than mid-May (we have to relocate). We are already priced way below other houses in the neighborhood with granite counters, etc. but with our location it just might not be low enough.

So, should we just lower the price again or does refreshing the kitchen make sense?

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To answer your question, I would rather buy a house at a lower price and then renovate the kitchen to my liking.

The one thing that would bother me about your house is the shared driveway. It would be a deal breaker for me. Perhaps that is the reason you have had ho offers.

    Bookmark   October 26, 2013 at 3:02PM
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It seems to me that if current buyers are saying the problem is location and driveway, you can't cure that by updating the kitchen. The only answer to the house's problems is probably price.

    Bookmark   October 26, 2013 at 3:14PM
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Sophie Wheeler

3K on a kitchen that really needs a 50K redo isn't going to do it if the kitchen isn't what the comments are about. As long as it's clean, it's fine. Someone will remodel it when they buy it. It really sounds like you're trying to gloss over your house's actual issues. And that that is what the problem really IS.

Price cures everything. Your market may be coming back, but it just means that the homes that are picked off first are the ones that are move in ready and priced right. You're not move in ready, and you have incurable defects that it doesn't sound like you're addressing in your pricing strategy.

Having a right of way drive with another house behind the home would also be a deal breaker to me. It would take a substantial price drop to even move that to the "maybe" column. Like at least 20-30% below the neighborhood comps. Couple that with the fact that I'd have to drop another 100K into redoing all the baths and kitchen and I think that someone who is at "market" price for a house is being unrealistic with what they are bringing to that market when they have all of the issues that you've got. I'm not saying that to be mean, but you need to face the fact that you're probably not priced a "little" high for most people when they compare your home to one without the issues.

    Bookmark   October 26, 2013 at 4:59PM
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I would never buy a house on a flag lot with a house in front and one behind, and a shared driveway. As mentioned above, it isn't something that you can change at all. We do have many flag lots in my CA town and they do sell, but I've never compared the numbers for sales price and days on market versus a regular lot.

I would not make any improvement and would simply price it aggressively when you relist.

    Bookmark   October 26, 2013 at 5:18PM
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Our initial price was set at 30% below comparable houses; we're currently priced almost 40% below comparable houses. We thought the initial price was too high but as I said our agent and other agents who have toured the house and know the property seem to be in consensus that the price is right - our agent has been scrupulous in asking about pricing after every showing.

Nearby smaller homes with zero lot line, smaller yards, and no off-street parking are priced higher than ours and seem to sell more quickly than ours as well, and they're closer to and have less privacy from their neighbors than we do with the house behind us. We worried about the shared driveway when we bought the house, but it's been a complete non-issue for the 8+ years we've been here. We get though that it's an issue for some people, and will just have to wait for the right buyers to come through. And will have to lower our price some more.

I've attached a picture of how the kitchen currently looks.

    Bookmark   October 26, 2013 at 5:27PM
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Do not replace laminate with laminate... it is still laminate.
You have had 20 showings... that's significant. No matter what the feedback says or does not say, you are overpriced, especially since you are in a time crunch.
On another note, why do sellers who HAVE to sell, think taking the home off the market is going to help sell the place?
Good luck with the sale.

    Bookmark   October 27, 2013 at 8:41AM
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The one thing I'd do in the kitchen is replace the chipped sink. That's probably not doing you any favors. It's a quick step from seeing a tiny chip to wondering what other maintenance has been neglected.

But the chief problem is the flag lot and the shared drive. I'd consider a flag lot, but having someone else have the right of way over my property would be a huge drawback. It's working for you now, but what about when that house is sold and new neighbors move in? Could be a disaster.

So I think you have to price the house to reflect those problems.

    Bookmark   October 27, 2013 at 9:24AM
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The buyers are telling your exactly what you need to hear. Sometimes seller are not so lucky. The issue is the flag lot and driveway. That means buyers in that price range are not interested in that type of arrangement. I would think that a lower end entry level buyer is who would be buying your house. Someone who just wants to get out of renting and is not thinking of it as a long term home. Price according to who your buyer is.

Just wondering what you thought of the house when you bought it? What situation were you in? Did you initially feel comfortable with the lot layout?

    Bookmark   October 27, 2013 at 9:42AM
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Thanks for the replies! I just wanted to explain that the way the shared driveway works is that it's a paved lane that comes off the main road - the lane is wide enough for emergency vehicles, delivery trucks, etc. and is nicely fenced and planted on each side. Our house is first and is off to the left of the lane behind a house the fronts the street, and we actually have a short, wide driveway off the lane up to our garage, so there's plenty of room for turnarounds, parking ,etc. The lane continues on past the front of our house, and the second house sits at the end of the lane. Their right-of-way only allows them to come up or down the lane to their house like any car passing a house on the street. PERIOD. They cannot park in the lane, their friends cannot park in the lane, work trucks cannot park in the lane, they cannot use the lane for parties, yard sales, and so forth because we own it. They are also not responsible for maintenance down the lane although they get to use it every day, and if one of the other owners (or a future owner) had wanted to push the issue we would quickly write up a maintenance agreement with them, or offer to sell them half of the lane. In the 8+ years we've lived here however the shared lane/driveway has not been an issue at all, and neither of the two different families that have lived in the house has tried to use it or abused their right-of-way. They go down the lane to work in the morning, come home in the evening, occasionally have friends over on weekends (maybe one extra car comes down the lane, but parks on their property - everyone else parks out on the street). It just has not been an issue. Of course there is the potential for someone to eventually own that house that could push things, but those are the kind of people with whom you're going to have a whole lot of other issues besides abusing their right-of-way. They'd probably be lousy and difficult neighbors no matter where your house was located.

BTW, many homes, both old and new, in our city have shared driveways, where the driveway is shared up to in back of the houses where it splits and each house gets a 1-car garage. Those homes sell without any problems.

Before we bought this house, we went over and introduced ourselves to the owners of the other house to see what they were like, and we felt they were people we could get along with, which they were. We bought this house because we loved the space and the way it was laid out. It has been a great home for our family and we have never regretted buying it or the time we've spent here. *No one* comes down the lane unless they have a reason to come to our house or the other one, so it's been a very safe place for our kids to ride their bikes and play. Because it's off the main road, the house is very quiet and private. Our friends and family like our house as well - a few years ago one friend wanted to buy it when she had to move. As I said earlier we have upgraded everything except the kitchen and bathrooms. We thought about upgrading them a couple of years ago, but when we decided that my husband would retire this year, and we would have a chance to relocate we decided instead of sinking money into renovations that we would just sell the house as is.

We spoke with our agent yesterday evening, and from her feedback, although the shared driveway has been an issue for a few families, the bigger issue is that the house is off the main road - people seem to want "instant" curb appeal rather than have to come down a lane, especially first-time buyers who have visions of a picket fence. And, people seem to want one large backyard - we have yard on three sides, not large, but not too small for gardens or play equipment either. Viewers seem to genuinely like the house, and a couple of lookers of have given it serious thought but then decided not to buy. Although our marketing has focused on the quiet and private aspect of the house, I wish other agents (and ours) would focus on the safety aspect more.

So, we will be lowering the price once again next year and hope for the best. We thought of doing the low-cost upgrades (floor and counters) just to give it a bit more pizazz when viewers do come in. We will be taking if off the market on the advice of our agent. Showings and sales are very slow over the holidays, and by taking it off and then relisting it will be a "fresh" house again versus one where people start to wonder, "what's wrong with that house?"

One more thing - we don't live in an area of $50K-$100K bathroom and kitchen remodels. People who have done those have either given the remodel away when they sold, or the house sits on the market forever because no one will pay for that in this neighborhood. It's a stable neighborhood with good schools, but it's not high end. Our house is priced accordingly, but it's becoming obvious it's still priced too high.

    Bookmark   October 27, 2013 at 3:04PM
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How long has it been on the market?

    Bookmark   October 27, 2013 at 3:38PM
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'the bigger issue is that the house is off the main road'

Exactly! The house's only access to the road is the private driveway with an easement that even has another house on it that has an easement. It's like one of those Russian nesting dolls. I wouldn't find living in an urban redeveloped factory with separate outbuildings a problem, but I wouldn't care for a 'flag' lot at all. That's the reaction of most people to a property layout like that, I'm afraid.

It's good that you realize that the price needs to drop to make the appeal go up. That's the key to getting it sold. I wouldn't take it off the market though. Don't limit your chances! No one is fooled by that old trick of 'renewing' a listing. Not the casual viewer who Google's the address and finds that info out before even considering the property, nor the experienced buyer whose realtor tells them the property listing history. That trick only worked before the advent of the internet. If you want the property to sell, you have to have it listed on the MLS even through the 'lean' months.

    Bookmark   October 27, 2013 at 3:57PM
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What you need is a permanent, registered, binding legal easement and access agreement that spells out rights and responsibilities for all 3 properties with respect to the lane.

Because "we haven't had any problems" usually comes just before one of the owners becomes a total jerk.

    Bookmark   October 27, 2013 at 4:51PM
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Our lane/driveway is not an easement; we own it outright out to the street (I know though there are some flag lots where the driveway is an actual easement over the neighboring property). The only easement is for the house behind us. That house actually sold fairly quickly a few years ago; like us, the new owners like the privacy, quiet and safety of the location.

To each his own though. I would never buy a house with a zero lot line, no yard and no off-street parking no matter how nice the interior was, and yet that type of (smaller) infill housing sells quickly here, even on a busy street, for more than what we're asking for our house. Our property taxes are also much, much lower than a house that faces out to the street, private driveway or not. We lived for 10 years in a small, charming old bungalow on a busy street corner before this house - wouldn't do that again either. That house nickle and dimed us almost to death, but it had lovely curb appeal.

Our house has only been listed for 45 days, but comparable (and more expensive) houses have been selling in around 21-25 days (without a price drop). The houses in our neighborhood that are still listed (sometimes longer than ours) have more serious issues than a shared driveway or laminate on the counters. A couple of houses have those very high-end remodels/renovations and have been on the MLS for months.

Our house will sell, but probably later rather than sooner. It's going to take another price drop and some more waiting. Thanks for the advice about not removing the listing - we want to keep it going, but it's our agent who wants to take it off for a while. I agree that if we take if off, the pressure is really going to be on to get it sold when it is re-listed.

    Bookmark   October 27, 2013 at 5:11PM
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The easement for our neighbors is spelled out quite clearly in their title and in ours. It's one of the reasons I think we haven't had any problems. As I said above, the house in front has no claim whatsoever over our lane/driveway. It is part of our property.

    Bookmark   October 27, 2013 at 5:14PM
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Why would an agent whose client NEEDS to sell before early Spring recommend that they take the home off the market until early Spring? You KNOW it won't sell if it is not listed.
At this point it really doesn't matter why it is not selling. If you are resigned to not updating it, then the price is the only control you have left.
Also, you keep saying that everything is updated and renovated except for the kitchen and the bathrooms. What else is left?

    Bookmark   October 27, 2013 at 7:03PM
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Flag lots are really common here too. Some people love them (like my inlaws who specifically bought a home on one lot b/c they hate having people park cars on the street in front of their house. For them flag lot = problem solved and more privacy). If they are common in your area then you probably don't need to discount for that reason. I would make sure the listing mentioned the "private driveway" so that anyone opposed to a flag lot wouldn't bother requesting a showing.

I think your kitchen looks nice and bright, doesn't scream cheap to me. I wouldn't waste money on new laminate.

    Bookmark   October 28, 2013 at 12:08AM
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The big problem for me would be the shared driveway. I've had some difficult neighbors in my time. The thought that a neighbor could, simply by parking his car in the driveway, block me from easy access to my home would be a deal-breaker. And I've known people who take offense easily and would see that as suitable retribution.

Yes, I could get out of my car and walk. But how do I get that car out of the way? Can I call the police and have them arrested? Will they tow the car? Will I have to pay for the tow? Just how much fuss and bother am I likely to have to go through?

Just because the easement is clearly spelled out doesn't mean the neighbors are going to abide by it. And what's the recourse if they don't? It's probably illegal to deny them access to their property.

Granted, I'm working on a worst case senario here. But there's a house right around the corner from me where there's an easement on the driveway, so that the people living in the house next door, which has been converted to 4 apartments, can use the driveway to get to their parking area, which is behind the house.

Things were fine until a few months ago, when a new tenant moved into the apartment house. He gets home from work at 2 am, and races his car up the driveway, squealing his wheels, and waking up the people living in the house that owns the driveway.

Those people are in contact with the landlord, who is doing his best to get the guy to either a) drive more quietly or b) use the other entrance to the property (which is down a side street and takes a minute or so longer to get to).

But in the meantime, 5 nights a week, they get awakened at 2:15 am.

    Bookmark   October 28, 2013 at 6:31AM
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I'm not sure to what extent this applies to your situation; however, I looked at an open house yesterday and chatted for quite a while with the agent. Here's what I took from that conversation:
In my area, it's all about turn key ready. Buyers are very busy, relatively young, two-earner couples who are not interested in spending time on fixing their house. It may be hard to believe, but he told me that kitchen and bath redo's result in a return of 2x or even more than the investment.

So, everything was painted in trendy gray.
Updated kitchen with SS appliances, granite, glass backsplash
Bathrooms with espresso cabinets and marble counter; river pebble in shower or hex tile, respectively
Hardwood floors

He also told me that nobody cares about the old windows or the old HVAC system, nor the roof as long as everything is still functional. It's all about how it looks.

Price range is 800K-1 mio, which is at the lower end for a detached house here.

So, can you figure out who your potential buyers are?

    Bookmark   October 28, 2013 at 11:32AM
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I don't see a problem with your shared driveway since it's common in your area.
Why not get an appraisal and if it turns out ok use it as justification for your asking price? It might be cheaper than dropping the price.

    Bookmark   October 28, 2013 at 11:51AM
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Buyers do not care about a seller's past appraisal. Neither do lenders. The current market is telling you waaay more than an appraisal will.

    Bookmark   October 28, 2013 at 1:11PM
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First, thank you for talking us off the edge of doing any "refreshing" in the kitchen - we've decided we'd rather just offer a credit to the buyer so they can use it for what they want to do. The kitchen as it currently is, is clean, fully functional, well-maintained but *could use* (vs. needs) some updating. Same for two out of three bathrooms.

I have to say that some of the assumptions about what we're dealing with because we live on a flag lot have been, well, interesting. I've tried to explain that the only easement is for the house behind us. Just ONE house, a nicely kept, well-maintained 4-bdrm, 1650 sq. ft home that has a right-of-way to come up and down OUR lane/driveway to their home, an easement that is set up in both their deed and ours. The driveway is our property; there is no easement through the house in front's property - no "nesting Russian dolls." Oh sure, the owners behind us or a new owner could block the driveway so that we couldn't get out, but then they'd have to get out of their car and walk about 200 or more ft. to get to their house. Through the rain, or snow, or carrying groceries, or whatever. Go for it. Or they could race their engines at 2:15 in the morning or whenever. So could anyone's neighbor living right next door . . . even if the house is located right out on the street. What would you do? Anyone, anywhere can get lousy, obnoxious neighbors. They're not limited to flag lots.

We are not located in some shoddy, run-down house or neighborhood just because our house is located on a flag lot with a shared driveway. We're in a working/middle-class neighborhood of single family homes (no multi-family homes, not even duplexes) with a popular neighborhood center (great restaurants, coffee shops, shopping, library, banks, churches, etc.) a short walk away, and one of the city's most-deslred elementary schools just a 5-minute walk down the road. The high school for our area is nationally recognized.

Our initial price was based on the appraisal; as I've said, agents showing the house, the ones that came to the broker's open and since all think the house is priced correctly. We lowered the price by $10K because we know that being on a flag lot, the location is different enough to throw off some buyers, and because we want to sell the house. Buyers who want granite or a remodeled kitchen on a more traditional lot in this neighborhood will pay $85-$100K more than what we're asking. At our price point, if someone wants the updated kitchen, granite counters and updated bathrooms as well as a more traditional lot they will be getting a smaller house, zero-lot line, smaller yard and no off-street parking, maybe a one-car garage if they're lucky (we have a 2-car garage). Those traditional lots will also be paying $1600 - $2000 more per year in property taxes. But, I still get that buyers are looking or dreaming about owning a home on a traditional lot with a fully-updated kitchen and bathrooms, granite counters, etc. That's their prerogative. There are lots of houses I wouldn't consider as well for entirely different reasons.

So, we may have to lower our price $10K more; we want to sell the house. It's not what we want to do. We might just offer a credit toward kitchen and bath updates. Still, even if we lowered our price by $20K or $40K, we will come out ahead based on what we owe on the house. We bought into the neighborhood just when it was starting to come around, when the current elementary school program was being established and the high school was making changes to their programs and adding the International Baccalaureate program, one of two in the city. Home values in our neighborhood have climbed as a result, even with the bursting of the housing bubble.

The right buyer will come along; they just haven't yet. We hope it's sooner rather than later.

    Bookmark   October 28, 2013 at 1:42PM
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Sophie Wheeler

It's been on the market now for 2 months, and you've had 20 showings, right? No offers? None?

Post your listing. That's the first gateway into the house. A lot of times, just redoing the pictures can increase your traffic.

    Bookmark   October 28, 2013 at 4:58PM
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I think we've had nearly 20 showings. Three of those showings were seriously interested in the house at the original price (according to their agents) - they had no problem with the driveway, the location, very much liked the house but in the end didn't "love" it, which we totally get. We looked at many great houses before this one but didn't "love" them, unlike this house, which immediately felt "right."

We've had this house staged and professionally photographed; there is also a video posted online and there's just not much of anything we can do differently for new photos. Our agent has done a fantastic job marketing the house and is the reason we have had so many showings. Viewers and agents know they are coming to a flag lot before they arrive - it's not a surprise.

But I will agree that the location is still an issue for many people, and after what's been said in this discussion, and the concerns and assumptions made about flag lots and shared driveways will be helpful in adapting our marketing in the future as well as deciding whether to hold firm with the current price or lower it again.

    Bookmark   October 28, 2013 at 6:22PM
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OP wrote"
"Our initial price was based on the appraisal; as I've said, agents showing the house, the ones that came to the broker's open and since all think the house is priced correctly"

Well, since you have dropped the price once and probably will again, we have proved that they were all wrong, right? Rarely, do agents nor buyers, when giving feedback, say that the home is overpriced. At least not in those words. What they tell you is that it is a nice home, but they found others that offered them more value. In other words, the home is overpriced.
Maybe your current price is fine, but at this price it may take longer than you have to find the right buyer. You have to take your timeline into major consideration when deciding to lower or not.
On offering the buyers a credit for the updating... IMO, don't do it. The buyers will love you for it and still offer you the same amount even if the credit was not there. I have never had a buyer tell me to increase the offer price to match the seller credit. They will want both. Just lower the price if you are going to consider offering a credit. That's my take on allowances anyhow. Other opinions may vary.

    Bookmark   October 28, 2013 at 7:23PM
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I say just be patient a little while longer. If you have had 20 showings in 2 months I think that is awesome! You just have not found the buyer yet. Your house must be close to what they want if they are looking though (seeing photos online first)

    Bookmark   October 29, 2013 at 1:57AM
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Well, patience won out over pricing - we received a full-price offer on the house and are under contract!

Buyer is pre-approved with a nice down payment, gave us excellent closing terms, loves the house and the location (flag lot not a problem) and intends to do their own renovations in the kitchens and baths in the next couple of years.

I'm glad we're done with this stage and can now turn our attention to our move . . . to Hawai'i!

    Bookmark   November 5, 2013 at 2:26PM
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Great news!

    Bookmark   November 5, 2013 at 3:32PM
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Congratulations! I hope your closing goes off without a hitch!

    Bookmark   November 6, 2013 at 2:52PM
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Good news! Keep the deal together.

    Bookmark   November 6, 2013 at 3:45PM
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