EDITED
HAVE YOU THOUGHT ABOUT POSSIBLY DOING A BIDDING WAR. (ESSENTIALLY AUCTION THE HOUSE WITH MIN. TERMS?) I KNOW THERE ARE PEOPLE WITH MORE EXPERIENCE IN THIS THAN ME ON THIS FORUM, BUT I KNOW PEOPLE THAT HAVE MADE A GOOD PROFIT BY DOING SO. BASICALLY YOU MARKET THE HECK OUT OF THE PROPERTY AND AUCTION FOR A WEEK AND HOLD A WALK THROUGH ON A FRIDAY THEN AUCTION IT ON SATURDAY. I THINK THE ONLY THING WITH THIS APPROACH IS MAKING SURE YOU DO YOUR WORK TO FIND OUT HOW LOW YOU CAN MANAGE TO GO AND STILL MAKE A PROFIT. BUT DEFINATELY ADVERTISE IT AS AN AUCTION FOR BELOW FMV.
HOPE THIS HELPS.
is 2% a price that buyer’s agents in your area will bring you a client with? I am a former agent, and unless my buyer’s agreed to pay the additional 1% I would not even show a 2% listing, this was understood by them at buyer’s rep agreement.
I stick a sign in the yard that says:
OWN THIS HOUSE
$1,000 down
poor credit ok
phone number.
probably get a call a day. I have a message that details the property and they leave a message if they want an appt.
oh, and I have a banker that can do this type of financing. for most people it’s not the payment, it’s the down payment and closing costs. I add whatever I expect the closing costs to be to the purchase price and help them at close. What I save in commission usually covers it.
If you are getting traffic but no offers, you have a price problem. If you are not even getting traffic, then you have a location problem, or nobody wants a house like your where yours is. I would bet you have a price problem. One strategy is to lower the price in order to induce a multiple offer situation. Once you have multiple offers, send back the message to the realtors that you need them to send in by 3:00 that day their “final and best offer” Frequently that final best offer is as high as that $570k you were looking for.
upper class neighborhood? consider RAISING your price. yes, I said raising.
People typically shop for houses by the monthly payment they can afford. In other words, if they are comfortable making a $1,200 per month payment for their home, the mortgage broker or Realtor tells them what they can afford in terms of price at prevailing interest rates. People thus want to get the most they can for their $1,200 or whatever their magic payment number happens to be. Reducing the price by $10,000 is going to be less than $100 per month in terms of payment. No Buyer is going to say, “Well, I wouldn’t pay $1,200 per month for that house, but sign me up now for $1,160!!!” You are not likely to move into a whole new group of buyers by reducing your price that much. You may catch one or two potential folks who can afford $1,160 on their top end, but you are not going to open the floodgates by any stretch of the imagination. If you cut the price $60,000, you would get more buyers in who could not afford the higher price, but such a cut is not likely if you want to avoid losing money on this deal.
Thus cutting price is not an effective solution, as you are really not going to be able to cut the price enough to get a great deal of additional buyers in to look at the house and get a sale. The realtor is grasping for straws, and cutting price is the only way that they can think of to sell homes for the most part. Instead, boost content - give them more with the house than you gave originally. Spend a few extra thousand and greatly increase the wow factor of the house, and get people excited. People buy houses on emotion, and then seek to rationalize their decision with logic, payment tables, and statements on how great of an “investment” the home will make.
A higher price will get you into the “next level” of buyers who can afford your payment. But these buyers expect more.
Like, add a deck. Even increase the cost to cover the cost of the deck. Even if youdon’t raise the price, do you see how spending $2,500 on a deck and keeping the same asking price (which effectively is equal to a $2,500 price cut) is superior to a $10,000 price cut? A big new deck will excite people much more than a $60 monthly savings any day. People think that decks are much more valuable than they are in terms of our costs to build them.
Other ideas are picket fences for homes with small front yards, landscaping and/or sod, security system and appliances, add crown molding or wainscoting to key rooms such as the living and dining room. Home warranty, custom paint. you get the idea. A minimal investment of a few more thousand trumps a radical price cut.
Thus in short, do not cut price if you have done your market research and feel that the price you are asking is really fair. Spend a little more and glitz up what you already have. Realtors cut prices out of panic because they don’t know what else to do.
hey, whatever works! let us know either way. adds to that “body of knowledge” thing.
You can raise the price, do the work, and maybe sell the house. Or you can lower the price, let the buyers do the work, save yourself the headache and probably make the same money. I’m not saying either way is right. This is why you have an agent work for you. Every situation is unique. We can get feedback from the people that look at your house and tell you what to do. Where as people that look at your house as a FSBO most likely won’t tell you the truth. Also there are a lot of buyers that do not look at FSBO. They use an agent and look at what they bring them. A lot of times people in that price range don’t want to take the time to run around and look themselves.
Bottom line there are good and bad sides to both FSBO and listing. Usually working with an agent just works out better. There is a reason why we get paid what we get paid. We are “suppose” to be professionals, the best at what we do.
Josh
Judd…what area/neighborhood are you in?? I live in NW Broward…maybe I can give you some pointers since I am an active investor and know our market well…and yes in SFL pricing is very important…no one is really getting appraisal these days…ALso on foresalebyowner you can pay about $300 and have your house listed on their site, MLS and realtor.com, plus they give you signs and a lock box for realtors to use. You can also list the commission you want to pay if a realtor sells it. If you sell it on your own you dont pay a commission. Remember very few buyers will buy from a listing agent…Maybe offer some incentives to buy your home??? How is the curb appeal???I know if i am buying an end user home and the curb appeal is bad I will keep driving by even in the good area’s…Down here people are lazy, for 550K we want a house thats done really…not needed to be worked on, plus remember, taxes and insurance are killing us badly here…Are you east of I95…I know the policy I just took out on a rehab east of I95 is costing me close to $13000 for bare basic coverage…its crazy…so when I sell I will be offering a 1yr prepaid insurance policy on the home as incentive since you can only get citizen insurance company there…
I just bought a rehabber for 440K in Wilton Manors near US1 which appraised for 560K and she had it listed for 1week and accepted it…thing is, its really just a updating rehab of kitchen, bath and all new flooring plus painting in/out and landscaping and has brandnew roof…When done house should appraise for 700K in that area but will be selling it fast at 625-650K…giving me a 100K+ profit in less than 3 months I know…
Thats a nice area…Homes in that are probably topping out in the high 500’s…so you need to definitly go lower… I think you need to start in the 540-550K range. Remember we no longer get appraisal for homes. Be prepared to get about 90% of the appraisal in that area. but with the bathrooms needing updating you may get a little less… I donot know if your in the older area with the homes built in the 50’s and 60’s and how old your baths are, but bathrooms and kitchens are most important thing for value. You can actually redo your baths with marble on the floors and walls, with a nice basic pedistal sink from home depot and toilet for about $1000-1500 per bathroom… get some nice 18x18marble…great deals all the time out there…just some advice…
I think you should listen to the realtor and sell for less…list it for less… Offer incentives if needed…These days I offer to pay for the 1st yrs home owners insurance policy since that is an out of pocket expense for all buyers and banks dont care who pays for that when selling.
The roof is fine since people know its being replaced…I do not know your size. but i would think you ggoing get 475-540K in your area… See what the others similar homes are selling for…walk the homes if you can?? give credit for floors if people do not like them when discussiing price???
One thing killing alot of sellers is greed… How much did you buy your house for??? are you using the proceeds to buy a new home???did you buy a new home already??? are you making 2 mortgage payments now???are you willing to carry a small second note on the house???list in your add…very motivated seller…but be prepared for some low ball offers…do not get offended by them as many will be investors and bargin hunters…as an investor i always felt that if i am not afraid to make the offer, i offered to much…its just a mental thing here…
I know buyowner is good site, but i will tell you the hits are getting bad…My friends neighbor lives in sunrise behind the homedepot on univeristy and had his home on buyowner from aug to april and got no results…His home was listed to high and always told him to lower it…wouldnt…he was greedy…had to refi his home to carry it as he moved…he lost so much money…guess what…he wanted 350K, now he is selling it to me for $220K, needs about 10K in updates and I will Lease Option it for $2200 month with $15000 down…Already have tennant in place…And yes his home appraised for $310K but the area will not support it even though on a canal with a nice lappool in yard…
From yours and rush’s posts, it sounds like your area is going through a depreciation cycle. And what Rush is trying to say in a nutshell is Sell Now, Sell Fast, Sell for What You Can Get, and GET OUT!!!
Raj
Hi,
I am new to this board. I just wanted to give you an option.
I sold my last house myself listing it with http://www.flatfeemlslisting.com. They have different packages, starting around $295.00.
I also posted about 100 photos in my Yahoo photo album and directed any interested parties to look at the photos and call me if they would like to make an appointment to see the house. I didn’t have any calls for about a month but then sold it to the first couple that looked at it.
This worked for me, you might want to check it out.
Mohee
Raj…its not that we are in a depreciation area, our market was apprectating at 20-30% over the last 2 or 3 yrs as the south florida market is crazy, all the new condo’s are 100K over priced, condo conversions everywhere at 50K over priced and since no one builds SFH homes in broward anymore, just condos or TH, they still have a good appreciation rate. Its just now, no one wants to pay above appraisal and they want deals…
I am still holding onto home I bought in the ghetto 2-4yrs ago for 50-100K that are all worth from 400-600K. Since i am cashflowing them at the current rental market rate which is $800-1100 a month on a 400K home (its scary. But this is how our market moved and the ghetto is still in part the ghetto…
But what is making people wanting to pay less is taxes (2% of the sale price, not assessed values) and the homeowners insurance plus crazy HOA fees…its killing the buyers as they can spend over $1000 a month before even making a payment.
One thing is , despite lower selling prices from the asking price, homes are still appreciating at 7-12% a yr here…and more and more people are rehabbing since people can not afford the higher prices in better areas…
I am now turning to Atlanta area for SFH buys as it s a cheaper market and alot of floridians are moving there. but still, SFL has over 1000 families per month coming down…so growth is here…
MLS gives you more exposure. Whichever you choose be sure to get a rock solid contract for yourself. Most realtors and sales assistance companies use boilerplate contracts that do no favor a seller. As the market softens down here in S Florida Buyers are trying to use scare tactics and the boilerplate language in most contracts to back out and put the screws to the Sellers. I am seeing this alot. Most of the form contracts are too loose and do not provide for attorney fees, costs or traditional forms of litigation in the event of default. Be aware of this when you sign a contract.
I would say go with MLS. It gives you more exposure.