Greater Hartford Real Estate Blog

My in-laws, who currently live in VT, recently purchased a new primary residence in VT. Now they need to sell their current primary residence. They had a very reputable local Realtor come in to give them a suggested list price. The price came back as $X, which they seemed happy with. I offered that they might want to get another opinion, just to be sure that the price was realistic. So they had another reputable local Realtor come in. The second Realtor suggested $X + 3%. Of course they were happier with the second opinion because it could end up netting them more equity in the end. However, their logic was “We want to list with the second Realtor because she wants to sell our house for $X + 3%. But we also think that we really want to list it at $X + 6%.”

There are a few issues with this logic. First, any Realtor would want to sell your house for the highest price possible. Our compensation is driven by the eventual sales price. In this example, the second Realtor didn’t want to sell the house for more, it was simply her opinion that the market value of the house was 3% more than the opinion of the first Realtor. You see, when Realtors provide pricing recommendations, that’s all it is, an opinion. Now, hopefully it’s an educated opinion. The Realtor should always pull relevant comparable home sales and do a pricing analysis based on the current market, condition of the home, and location of the home. But it’s still an opinion. We have no crystal ball that will tell us exactly what the Market Value (sales price at that exact point in time) will be. So, in my in-laws case, they simply had 2 Realtors with 2 slightly different opinions. This happens all the time. Luckily the pricing suggestion was only 3% different. If you have a case where the opinion is different by 10% or more, you may have the case of an agent trying to buy the listing. Always get a third opinion if that happens. At least two of the agents should be close on their price recommendations. Go with one of them.

The other issue is the desire to price the house at $X + 6%. My in-laws were originally happy with the suggestion of $X. Then they get the suggestion of $X + 3% and suddenly they think the house might be worth $X + 6%. If there is one thing I hate, it’s an overpriced house. They don’t sell. They sell other homes of similar size and quality that are more realistically priced. They waste valuable marketing time and dollars. Agents won’t show them. They become stagnant, and then no one wants them. The sellers carrying costs grow. The agent gets a bad reputation for “buying” listings. The seller most likely will end up dropping the price, only to have lost potential buyers because they moved on to houses that were priced correctly from the beginning. Really, it just becomes an ugly situation for everyone involved.

At this point my in-laws haven’t yet listed their house. They are still deciding on an asking price. Hopefully they will choose a price that is realistic and not too out of the ballpark. Father’s Day won’t be too pleasant if they are still holding 2 houses…

The Hartford Courant had an interesting article today on Sears kit homes that were built in the early 1900’s. I personally find these houses fascinating, as they are architectually distinct and reflect the character of the nation during and after World War I. I’ve had the opportunity to see several of the different “kits” during previous travels to Ohio. Each is unique with its own personality.

If you have an interest in architecture, these homes should be in your catalog. Sears has an comprehensive website that covers the history, including pictures of the various models. You can contact other enthusiasts and find a list of other references to continue your research. Enjoy!

This afternoon my husband and I went to view the condos competing for our investment dollars. Really, there was not much difference that warranted a list price that is 25% higher. The more expensive condos have an enclosed garage versus a carport garage. The difference was the the carport garage had no door, the structure was built the same. And the more expensive condos had slightly larger bathrooms. But that was it. No magical kitchens. The baths weren’t even updated, just a few more square feet of space. Does that really warrant a 25% higher list price? I think not. From a rental standpoint, you wouldn’t be able to justify a higher rent for any of the spaces. They are all comparable. One of the condos would probably be easier to rent because it was very neutral (cream wallpaper, cream paint, blonde hardwood floors), but it still wouldn’t command a higher rent. So, it looks like we will be pursuing the lower priced condo. The only thing standing in our way is the owner-to-renter ratio and our ability to get a mortgage. We could pay cash, but then the financials don’t work because we wouldn’t have any interest to deduct for tax purposes.

Stay tuned for the exciting conclusion…