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Selling an unusual property?

Posted by LeahRWH (My Page) on
Mon, Aug 26, 13 at 16:10

My husband and I bought what we thought was the perfect house for us a little under a year ago - nice and roomy, needed some work but lots of character, plenty of land for fruit trees and gardening and animals. Well, turns out that a lot of house on a lot of land is a LOT of work, so we're now eager to get rid of it and move into something cheaper/smaller.

So now I'm trying to do some research on the best way to sell this place. The trouble is that it's really unusual for the area. This area is basically subdivision central, tons of brand new construction on tiny lots. Most of the homes on Zillow have been built in the past five years. Our house, on the other hand, was built in 1972. It looks nice from the outside if you like the farmhouse look, but the inside is fairly dated. We've fixed all the practical issues (new roof, new furnace, new windows, etc.) and updated a few things inside, but the inside is still fairly dated and still needs new carpet upstairs and complete makeovers for the kitchen and one of the bathrooms.

In addition to the obvious aesthetic issues, we're just in a weird position in the market. Our house is about 3500 square feet on 6 acres of land with a barn (but not totally rural - only about fifteen minutes from jobs/shopping), so we're obviously selling to a niche market, not the average suburban family. From what I can tell on Zillow, there is not a single house like ours for sale right now. Everything else with land is either a trailer or tear-down shack on a big chunk of land (these seem to go for $50k-140k or so) or a newly built mansion (generally selling for $350k and up). Our house, from what I can tell from the half dozen vaguely similar houses that sold in the last year, is worth somewhere between $200k and 230k. I'm not sure if being all alone in that market segment will help or hurt us.

So, all that lengthy backstory aside, here are my questions:

1. All the realtors that I can find around here focus on the shiny new subdivision houses. Will they be able to effectively sell a semi-rural fixer-upper or should I try the FSBO route? If a realtor is the best route, are there any specific questions I should ask regarding our situation?

2. What should be done differently when selling a house with obvious aesthetic issues? We've been undertaking cheaper fixes (paint, updated tile, light fixtures and faucets) here and there, but we don't have money to completely remodel the kitchen or bathroom any time in the next year or two, and we'd really like to sell the place sooner than that.

3. I know that pricing is the best way to get a quick sale. We owe about $190k and I'm pretty sure the place is worth somewhere around $215k. How much of the difference can we expect to lose in fees and taxes (ie, how low could we realistically go and still cover the mortgage)?

Aaaand any other advice you think would be helpful to a first-time seller with a weird property... I really appreciate any help you guys can give me.


Follow-Up Postings:

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RE: Selling an unusual property?

You might want to post photos of the kitchen and bathroom on the Home Decorating forum to get opinions on whether some small fixes might make the rooms look less dated. For example, sometimes removing old window treatments help.


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RE: Selling an unusual property?

Who handled the property when you bought it?

Remember what made it attractive to you, There will be someone else out there who it might be perfect for.

Good luck.

ML


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RE: Selling an unusual property?

I would focus on the "urban homesteading" aspect of the place, with less emphasis on the house. Explain the improvements - those are major selling points, but the close-in acreage has someone out there looking for it.

It would be great for someone who can do market gardening.


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RE: Selling an unusual property?

graywings, that's a good idea, thanks. I'll do that and see if they can help me out.

maddielee, it was a HUD house when I bought it. No particular agent handling it. So no help there. :\ And I don't want to go with our buyer's agent from last time, because even though she was really helpful to us, I've looked at her own listings and they're AWFUL.

lazygardens, we had some vague visions of homesteading too when we bought the place. I'm thinking that's the sort of person we need to appeal to. Either homesteaders or survivalists or horse people.


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RE: Selling an unusual property?

what lazygardens said - hopefully you can find an agent who will put at least one ad in magazines aimed at those markets (i.e. horse related, etc). You might even widen your search for a listing agent in order to find one that lists properties similar to yours.


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RE: Selling an unusual property?

People who want land generally want something more rural, or a larger estate sized subdivision which all contains similarly sized lots and upscale homes. An older home with acreage in the middle of subdivisions is just waiting to be divided into lots for people to build. If building is picking up in your area, look at selling to a developer who will be interested in creating a subdivision.

In addition, you've held the property such a short time that the fees associated with selling, moving, and buying again will completely wipe out any equity that you have and you'll probably be underwater to sell. Figure 10% of the cost of the home minimum for all of that, and that's if you have reserves to use for the downpayment for another home. You will probably need to be prepared to bring money to the table to close. If that's not feasible, then perhaps you should look at holding on to it longer to ride the rising tide market appreciation that is showing a bit of a comeback. If you can neither bring money to the table, nor handle the upkeep of the property, perhaps the bank would be willing to short sale for you. That has it's own repercussions on your taxes and credit, so be sure you understand what your realistic options are here.


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RE: Selling an unusual property?

If you bought it last year and only updated mechanics, what makes you think it is worth more than you paid for it now? It is only one year later, and few markets have crazy year-to-year appreciation. You may have sunk a decent chunk of change into the place for the roof, windows and furnace, but they will not add much value to the property itself.

Figure what you paid for the property is a good number to start at for a listing price. As hollysprings said, you are looking at a loss on this property if you sell it now to a single owner. Hollysprings' suggestion of looking for developer interest may be the only way you can sell without bringing money to the table (never mind the roof, furnace and window investment).

Unless you find that developer, you may want to resign yourself to a few more years in this house, slowly doing some cosmetic changes that aren't costly (painting, scraping wallpaper, refinishing floors are all low cost, but big wow factors on befores and afters), and figure out how to minimize your losses with a good marketing strategy.


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RE: Selling an unusual property?

Where exactly are you?

My market has been slower to pick up, and has finally picked up just this spring. In this market, prices are dramatically higher now than they were a year ago. So, it's probably possible to sell at a higher price than was paid (especially having made more serious repairs.) Still I agree you'll pretty much wipe out any gains (and maybe more) with commission, taxes, and fees. I wouldn't try to go the FSBO route if you have an "unusual" property, though you would save commission. There is probably some realtor out there who can properly market this property.

I sympathize because although my area is not subdivision-central, there are few true comps anywhere. Age, condition, lot size, etc. are all over the map, and traffic is slow even in the best of times so there just aren't a lot of sales. It was hard to tell how to price my house (currently on market, under contract) and figure out just who the target buyer might be. (Every single interested buyer has been single or a childless couple when I thought all our land would attract big families with kids.)

I think there is a buyer out there for your property. An investor who wants to subdivide is unlikely to pay you what you need to get in order to break even. Also, not every property is subdividable, due to road frontage, etc.. (We have almost 9 acres but can't subdivide.) Surely there is someone who wants to be close to amenities yet still have more land and privacy. In a lot of areas, that type of property will sell for a premium. People get to have more of a country feel, without the inconvenience of actually being out in the country.

Many (probably most) houses for sale in my area are old. Some are well-maintained, but many need serious work. The holy grail of older houses (although I don't consider 1972 as old) is one which is structurally sound with newer systems, and only needs cosmetic work. I would highlight the fact that major repairs have been done, and that the property would be a real gem with a little TLC. Be up front about the fact that it is dated (or "retro.") Play up the possibilities of all the space... plant images in the heads of the buyers. The space and barn are appealing for many reasons... great for kids, pets, gardeners, people who want workshop space, etc.. I would explicitly state those possibilities in your listing.


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RE: Selling an unusual property?

I just wanted to add - in my area (New Hampshire) there are real estate firms which specific deal with older and/or farm properties. There are buyers out there (I'm one of them) who really do NOT want a new house. In my area, 1972 is pretty much considered a new house, but I know in other areas it is considered old. And if you have a barn and 6 acres, you've got a farm-like property, even if the house is new-ish. I guarantee there is someone out there who is specifically looking for that sort of set-up. Afterall, you bought it!

I don't know if such firms exist anywhere in your area, but you might look into it. They will have clients who are coming to them looking for just what you are selling. Some will want a more rural location which no "tiny boxes" around, but others will consider it the best of both worlds.


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RE: Selling an unusual property?

The right realtor will find appropriate comps - maybe not exact matches but as close as possible given the uniqueness of your property - and will know how to market and target the right potential buyer. Depending on where you are, you may need to market it to larger urban/suburban areas quite a distance away to capture someone looking to make a big change. That'd be me.

I want to add that what you're describing is EXACTLY the type of thing we've been looking for in NC. We want some land and privacy but not seclusion or long distances to daily amenities. And just for the record, not every buyer wants the kitchen and baths redone prior to purchase - many of us prefer to do our own updates and would rather buy something as is.


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RE: Selling an unusual property?

Also if there is no HOA associated with your home that will be attractive to someone wanting to park a trailer or old cars etc.


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RE: Selling an unusual property?

Wow, thanks for all the replies. Thanks for all the ideas. To address some individually:
hollysprings, I agree somewhat. We're in kind of an odd place. I'm not sure how well this place would go for developing, though - it's only six acres, and there are two more farms behind us bordering out property. There are a lot of other tracts in the area that seem more suitable to subdividing, to my inexperienced eye, anyway. I'll look into it, though - thanks for the suggestion! Honestly, we're not set on buying another place right away, so if we just break even or even take a small loss, we could live with that.
xamsx, the place was a HUD home (foreclosure) when we got it. We paid $160,000 + another $30k for improvements, and it was appraised at $198,000 before fixing anything. I've also spent most of the day today looking at what I can dig up for comps, and have found equally dated houses with similar acreage selling in the $215-230k range, and all of them were significantly smaller than our house (2000-2500 sqft as opposed to our 3500 sqft). So I'm hopeful that we can get $210-220k out of it in a reasonable amount of time. And in the meantime, we'll be following your advice and doing small fixes as we can. Right now we just finished scraping all the hideous 80s wallpaper off that bathroom and are in the process of painting it a nice shade of beige, so that's an improvement...
lizzie_nh, we're in Georgia, near Augusta. It's a fairly high-growth area, but not high enough to dramatically change house values from one year to the next. I think you're right about highlighting the repairs done and aesthetic possibilities of the place. We bought the place based purely on potential, and I assume that anyone looking for a farmhouse on acreage would be up for a little work. I have managed to find one brokerage that deals primarily with rural/farm properties, but their focus is about forty-five minutes south of where we live. I may call them anyway and see if they can give me some leads on someone to work with in my area.

Yet another question - does anyone know if it is possible to find out which agent represented a previously sold house? I was looking through the comps I found and thinking that it might be helpful to contact the agents that sold them (especially the ones that did it relatively quickly and with the fewest price cuts), but I can't figure out how to find the listing agent for them.


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RE: Selling an unusual property?

If you are in suburban development central... Maybe you should see about getting it subdivided and what it is worth as land only.
Clearly you aren't in my area, but, for example, 2 ac just down the road is being subdivided into 7 and selling for 1.1mil... Can you market your land(house) as a tear down? Would that be appropriate?


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RE: Selling an unusual property?

I've looked into it a little bit since posting this, and I don't see developing it happening. There are a lot of completely vacant tracts for sale at fairly cheap prices (~12k/acre), so I don't see them buying up old houses any time soon. It'd be kind of a shame anyway to see this place torn down. It's a nice house, solid brick and fairly attractive, with some good details - huge brick fireplace, gigantic picture windows in the kitchen and dining room, etc. Just needs some updating, really.


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RE: Selling an unusual property?

I know from personal experience that this type of place appeals to horse owners on a budget. Usually they don't care so much about the interior of the house so long as it is sound, they are much more concerned whether there is water and electric to the outbuilding, if the place can be fenced or if it is fenced, if the fence is sturdy, grazing areas, a place to ride... It might be worth you while to advertise it as a horse place if horses are allowed and the questions here can be answered. This would be in addition to other advertising you may do to the more generic "back to the land" type folks. There is a growing market in many places for homes with land such as yours. That close to town can also be a selling point," live in the country, even if you work in the city". best wishes


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RE: Selling an unusual property?

That's what I'm hoping for right now, egbar. The barn has power but not water (would probably be an easy fix, though, with a weekend and a ditch witch), and there is a large fenced pasture with plenty of grass. We've got two steers out there getting fat on grass right now, and one of our neighbors has horses already.


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RE: Selling an unusual property?

Jeez louise - is it really THAT unusual? I mean in the wider scheme of thing its really not. It sounds like a wonderful place for a family with kids - I mean, a normal family not a survivalist clan hunkered down in their bunkers. Close to the amenities, yet room for the kids to yell and run around.

Hmmm.... that's assuming that kids nowadays still yell and run around, which is perhaps a big assumption. Whenever I go through a typical subdivision I wonder where all the people are, even on a weekend..


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RE: Selling an unusual property?

Actually the location would have appealed to me and may well appeal to others. The other market this would appeal to are people with more pets than subdivisions would allow, particularly people who show dogs or cats. They tend to have more animals than you can have in a subdivision so they need some space and no restrictions on pets. However, they don't necessarily want to live in a super rural environment where they are away from everything. They like being close to amenities.

Oh, in our MLS here you can see previously sold properties and see who was the selling agent. I would look there for who has sold similar type property in the past. Usually there are people who specialize in selling acreage properties.

This post was edited by kats_meow on Fri, Aug 30, 13 at 18:09


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RE: Selling an unusual property?

That's exactly what we are looking for in our city. Not too far from town. You might not have many buyers for it, but I imagine you'll have someone.


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RE: Selling an unusual property?

I would have thought your property would be well sought after.
You said in your OP that there were no houses in the area to compare to, so how can you say agents are only interested in the small new houses.....from your OP that is all they get on their books to sell. They may well jump at getting something different...never know till you try.
Contact an agent or two and speak to them, they know your area.


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RE: Selling an unusual property?

How long was it on the market before you bought it?


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RE: Selling an unusual property?

I personally think the place has a lot of appeal (lots of land and a house with character in a great location), but when we were looking for a house, we went through several buyers' agents who just couldn't seem to wrap their heads around the idea of showing us houses that weren't new construction in a subdivision. I hope you guys are right - I'm excited to see what a realtor says once we get this place dolled up a little more.

ncrealestateguy: It sat empty for two years while they wrangled over foreclosure details, then it was on the market for 3-4 months before we got it. It was cheap, but kind of a wreck at the time, needed a new roof and windows badly, problems with electric and plumbing, etc (the old owners ripped the pipes out of some of the walls upstairs when they got foreclosed on...).


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RE: Selling an unusual property?

I agree with posts above, I would market it as a horse property. What your describing sounds very similar to the house and land I have now, that took us 7 years to find.
We are in New England so it was more than 3 times what you paid, but the point is many horse people want their horses home with them and are willing to make sacrifices to do it.

I used to tell people I would live in a bunk house if it meant I could have my horse in my backyard.


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