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…
I mentioned recently that my spouse and I are looking into buying an investment property. Specifically, a condo. Well, this week 2 other condos with the same square footage and layout, only 2 doors down from the one we’re considering, came on the market. The asking price on each of these condos is 25% more. Hmmm. The descriptions don’t make either sound like they have a fabulous gourmet kitchen or spa bath. So what gives. They are in the same types of buildings, monthly Association fees are the same, location is the same, parking situation is the same. We’re looking at both of them tomorrow, so I’ll know conclusively then what specifically is different. But something just seems fishy. Did the new sellers get bad advice from their agents on pricing? Are the new sellers just too optimistic about their property market values? The condo we looked at has been sitting for 6 months and actually shows very nicely. And still hasn’t sold, even with a significantly lower listing price. Now I’m ticked that these two other condos may make it difficult for me to negotiate a better price on the one that has been sitting.
Stay tuned for more info tomorrow.
Did you know that in 2006, 73% of all US households owned a dog or cat? We sure do love our four legged companions.
But how do you minimize the impact of your beloved fluffball when you’re trying to sell your home?
First, you want to make sure that you either remove your pets from the home for all showings, or have them crated with a “Do Not Disturb” sign. You never know how your pet will react with strangers in the home, and I’ve seen more than one agent running after an indoor cat that escaped during a showing. Always try to minimize your pet’s presence so the buyer can focus on the home and not your cute Labrador.
Next, get rid of the smelly stuff. This means constantly cleaning litter boxes, removing stains from carpets, and using natural cleansers to remove odors. Nothing is worse than walking into a potpurri-filled home that’s trying to mask pet odor. It immediately raises a concern with the buyer and they wonder what else you’re trying to cover up.
Finally, get rid of the toys. No one wants to look at slimy tennis balls, cat towers, and half-chewed fake mice. Gather up the sources of amusement and put them in a covered basket. You’ll still have easy access to them, but buyers won’t have to look at your pet’s dirty laundry, so to speak.
If you follow these simple steps, you’ll minimize the impact your pets may have on your home sale and keep them in a secure state of mind during this time of transition. Woof!