Help! Real Estate Agents
I am considering using a bonus structure to get my real estate agents to move my property. The house has been in the MLS system for over 2 weeks and has yet to be shown to anyone. And the reason I am getting from the listing agent is that the other agents in her office feel the listing price is too high. I am convinced they are wrong. Assuming I am right, does anyone have an opinion as to whether or not placing a bonus tied to the agent who can sell it for a predetermined price within a specified time frame might be successful? I am considering using a sliding scale for this bonus. IE:
sold between 310-315K = additional 1/2%
sold between 315-320K = additional 1%
sold between 320-329K = additional 1.5%
Any opinions/advice will be greatly appreciated.
Dave
Hey,
You "hire" an agent, not just to list your house on the MLS, but also to give you an idea of the market conditions. So if the agents are saying the house is too much...it is too much.
Personally, I have really issues with giving agents a "bonus" for selling the house. Basically, it provides them an personal incentive to sell your house instead of another house, which means they are NOT considering the value to the buyer. This is extremely unethical and can bite you in a court case.
How are you convienced the listing price is fair? Have you had a market analyst done on the house? It's the agents JOB to know Real Estate and if they think it is to high than it's going to be to high! Giving them a bonus is "bribing" them to show your house vs others, and I bet the broker won't even let you do that. Agents, especially new agents, relay a lot on referrals and will find the house right for the buyer regardless of cost of the house or anything "extra" they get on the side. Well at least the ones that want to stay in business and have a good track record.
However, to be fair, the broker does have a responsibility to understand the sellers wants and discuss those with you. If you have no had a market analysis done than I would strongly recommend you do so. Than at that point, you need to determine how fast you want it sold. If you want it sold rather quickly than you need to figure out if you are willing to sacrifice cutting the price a lil bit to "entice" buyers NOT agents! Hope this helps!
Bruce
I understand your position, but...
This house is worth close to what it is listed at. In an area that is considered "prime" we have made valid improvements (upgraded the kitchen and the baths/added 4th bedroom etc)to the tune of 175K. All we are looking to increase the price on this house over what we paid for it is 110K. The reason the other agents aren't moving on it is because they are all older agents who have never sold a home in this area that was 200K and rehabbed to a 310K house. The listing agent believes it can sell at this price. I realize to some extent, that this is a "pioneer move, but I have always been one to "think outside the box" I have had many other people look at this house and know the area and market who believe this house could command as much as 330K, and they are seasoned REI's. I along with them believe this house to worth close to the asking price, so I fail to understand why there would be a "conflict of interest" or unethical tone to the bonus structure. I am told it isn't against the law, so why would it come back to bite me in a court case?
I appreciate your input.
Dave"
sir cruizer
Thanks for responding. Yes, before this house was ever purchased, we had them do a cma on it based on the proposed upgrades. That put it at 329-335K.. As I stated in the above post, it is the older agents, who are totally unfamiliar with moving a 200K house to this level that are skeptical. There are several comparable homes in the immediate neighborhood in this 325K range, so it's not as if I am trying to sell this house being priced 110K over all the other houses. If I were not convinced that this house could command such a price increase, I would be the first to conceed, cut my losses and move in another direction. But when you feel deep in your gut that you are right and have done your homework so to speak, I am reluctant to just cut the price (and the profits) because of the aforementioned reason. This is definitely a house that needs to be seen to appreciate it's market value in terms of what it has to offer in value to a buyer. Thanks for your input.
Dave
Thanks for the additional information. Brings more ideas to give you advice on. When you say "You have to see to appreciate" really says a lot! How is your MLS listed? Are there mutiple photos highlighting the rehab? I'm assuming the details of the rehab are in the description? IMO, and in most to be exact, the point of MLS is to get attention from brokers/agents all over and not just in that office! You may have some factors against you right now. One might be that no one is looking for a house over 300K in that area right now. Is this your first rehab?
sir cruizer
yes this listing contains several photos depicting improvements as well as descriptions. I am told and based on the sheer numbers of houses being bought and sold in this area at this price range that there is currently a market for 300K + houses here. At this point it is just a matter of being able to get people in to view it that is standing in the way of someone making an offer on it.
No, this isn't my first rehab, but it is at this price level. Majority of my rehabs have been in the 50-150K range. But this area offers a unique situation in the respect that the comps for this house price wise-will require major upgrading to reach the "level of house" that this one offers. It has some amenities that typically other houses in this area do not have at this price level. which is why I am so frustrated because if someone were to buy a house in this neighborhood for say 290K they would have to invest another 50K just to reach the level of upgrading to the primary areas, IE: kitchen/baths etc. We have rehabbed this house to include new interior and primary door units new impressioned colored concrete patio remodeled familyroom with new lighting and moldings. New lighting fixtures throughout. Added a 4th bedroom/office with plenty of storage...new moldings throughout the entire house. The entire place has been repainted a neutral color. It offers 2 active fireplaces 1 gas/1 log...I think you get the idea. We have made a multitude of improvements and are only asking a total of 110K above the price of the house that we bought it at.
Dave
Hello Dave,
I would scratch the idea of offering any additional incentive to the realtors, regardless of any implications. Whatever realtor / s ultimately sell the house for you will make plenty of commission. It is their job (under contract) to sell your house. Agents are very finicky but their commission comes directly out of your potential profits.
The Market Analysis CMA that your realtor completed should have included something critical for you to take note of...DOM of this price range of home for the area. Even if your market is strong I would suggest that although you may be able to turn one of your 50-150K range homes in 1-3 months, this one might take 2-5. And of course this should be accounted for as carrying cost from the beginning. You might also want to make sure you are doing whatever you can to market the property yourself. I am assuming that if you bring a buyer to the table your agent will receive a reduced commission for solely handling the deal, maybe as low as 2%. Lastly, I have learned that spending time with the property once completed can be invaluable!!!! I just sold a property listed for 45 days. Didnt show at all the first 1.5 weeks. The buyers agent wasn't particularly interested in the house and the buyers didnt say a word on first inspection. She wanted to sell them another house! (I was doing some yard work at the time) But they did come back later to see me on the same day. The wife loved the house and I SOLD IT after about 45 minutes of pitch. Although I did still have to pay the commission. The house was sold at my asking price. P.S. That day I spent with the house I had five (5) showings and two additional back-up contracts within two days.......because I was there.
Giovanni
I appreciate your input. Actually, I did check the DOM figures before I even purchased this house. At this level, the average was 30 days. This is why I am stymied over this lack of interest in showing the property by the agents. I realize that most people resist change. And getting these older more experienced agents to think slightly differently is proving to be a daunting task. I know that the numbers are here to support my contention that this house can bring 320K or atleast close to it. At this level, the prospective buyers for this house will most likely be knowledgable enough to apply simple economics to this equation.
The comps at this range(300K) need atleast 50 - 75 K in major upgrades IE:kitchen/baths. When you factor that in with the aggravation and inconvenience factor (or lack of it-for my house) and add in all the extras IE: additional BR and so on...I truly believe there is no choice to be made, from a financial stand point. So at that point, the key remaining factor will be whether this house suits their personal tastes with regard to the way we have rehabbed it. Having had several years experience with interior design, we paid close attention to the styles we incorporated into the major renovations, choosing neutral colors that would limit negative responses to the newly rehabbed areas. It wasn't done to suit my personal tastes, but I wasn't rehabbing it for myself, so I tried and have been told by many that have seen it, that I accomplished what I set out to do. Now I need to get people in to view it so that they (the potential buyers ) can see what it has to offer for what I am asking for it. I had thought that I didn't have the time to effectively market this house myself, because I am very busy rehabbing the next one and researching future prospective houses for the buy end. But I may have to seriously rethink my logic and apply more of my time toward showing/selling this one myself. As I stated earlier, this is my first at the price level, so I am treading cautiously until I can definitely determine whether this venture has merit or whether I have made a mistake here.
with regard to your comment about the agents being finicky, I appreciate that and agree whole heartedly. But it boggles my mind that they have shown a total unwillingness to show this property based on preconceived notions that they can't factually back up with anything other than their opinions. Since many of them operate in many other communities (other than the one this house is located in) I suspect they are just convinced that I have over-improved this house beyond what the area will allow it to command. But such is really not the case and I will continue to do whatever I can to prove myself right or wrong, whatever that ends up being. I'm a bit of a gambler, so I'm betting I can do it.
Thanks again and continue to offer advise anywhere you feel it is helpful, as it is greatly appreciated. I've been in the construction business for over 34 yrs and try to learn something new every day and usually...I do.
Thanks
Dave
Dave,
I can tell you are a very thorough guy. You may well have put a little more into this property inside than necessary. But that is something we all have to decide at a certain point in the rehab process.... Wether the market allows forcing the appreciation to the next level. Now that you are done, it seems you just need to be a little patient and I'm sure you will find an interested buyer. I learned early on that a realtor can be a valuable tool (nothing more) and if you intend to use them it is Critical (and may take a few months of serious networking) that you find an agent who is willing to spend time with you to understand exactly what your goals are at specific levels of investing, and is willing to work for Your long term vision in business. Of course they must be compatible to you and the way you work, honest, fair, unbiased, persistant, agressive, etc.
My next suggestion is to find another agency for the future.
One other suggestion...You mentioned alot about interior upgrades. How is the exterior. The drive by "WOW" factor is important for a quick sale on "appreciation forced" properties (landscape, etc) . It's always the first thing I do and the last thing I touch up. This will get plenty of people in the property fast. It is important that ANYONE regardless of the type of property they are looking for says "WOW" when they drive by....the packaging will make them want to see inside more.
SG
I disagree with anyone who says that whaever commission the agent makes, it's more than enough. True, most agents are accustomed to certain percentage, so whenever they see a bonus, it gives them an extra incentive to show it to as many clients as they have because they will make more money.
Sadly enough, I just finished watching "Wall Street" for the first time in my life a couple of days ago. In it, Gordon Gekko(wall street magnate played brilliantly by Michael Douglas) speaks at the shareholders meeting of a company that he proposes to buy, break up, and sell, and his words are: "Greed, for the lack of the better word, is GOOD."
Most people hire real estate agents and expect real estate agents to find them properties - they're not actively looking for houses themselves. Therefore, it's up to an agent to identify the property that falls in the client's needs/wants range and show it to them. There's nothing wrong to give extra motivation to the selling agent if it accomplishes a certain goal for the seller(sells within a certain price range, or sells by a certain date). As we all know, any real estate property has holding costs. If you can spare them and pass the on instead to a selling agent(in form of them, that' s a very valid approach, IMHO.
compwhiz,
The point I was trying to get across is that davezora should be working with an agent as a Close TEAM. This seems to be at the root of his concern, as he noted an obvious "unwillingness" to show the property and "preconceived opinions" or notions about the property in the agency. I dont see anything wrong with incentives. But if I cant get support from ny realtor or his agency I wouldnt likely be offering them more money. We all know that as an agent you work hard for your money.
davezora,
Realtors get a predetermined commission based on the sale price. I sometimes have a commission schedule that reflects a higher commission at a higher price (& maybe even 2 or 3 levels) But this is all determined in advance of marketing time, when the listing contract is signed. I have never changed it later.
If you are going to offer an incentive, I would do it based on time to sell. Afterall you need to sell as fast as possible, and the agent will receive a higher commission at a higher sales price automatically.
Do a new market analysis if necessary and have a good sit down with that agent to re-define your pricing and adjust accordingly.
Incentives in any business can be counter-productive and do more harm than good if not structured properly, and implemented at the right time. Timing is everything.
SG
Giovanni
Understood about the wow factor. Curb appeal is equally as important as any other aspect in these rehabs. And yes, I believe I have taken care of that as well. The garage doors (on the front of the house have been changed to reflect modern insulated doors with windows that conform to the color palette of the brick of the house. I added electric openers because if you can believe, they didn't have them before. The front entry door system is a beautiful unit of mahogany/leaded glass with side lights (I have had numerous positive comments about how great it looks) the retaining walls paralleling the driveway have been redone and numerous plantings (flowers-shrubs-and even a couple weeping cherry trees) have been added. It sports a $100 brass address plaque-and an $90 brass victorian ornate mailbox. All beds have been outlined and mulched. I really think the exterior looks great. All exterior areas that needed it were painted and a new exterior entryway chandelier was added to accent it since the front portico is 12 ft high. So I think the wow factor is present when anyone drives by. All of this is why I am so taken aback by the fact that this house isn't receiving any scheduled viewings. This is supposed to be prime selling season for this area.
The listing agent is a very hard worker and is working her tail off to get prospects, but she is being bombarded by negativity from the other agents in her office who believe this house won't sell for more than 300K. they think I can get maybe 300K and it's listed for 339K but they won't show it because they don't believe we can get 319K for it (which was the original projection). So consequently, they just figure it's a waste of time. I know I'm probably being redundant by now, but it still confounds me. Perhaps 2 weeks isn't enough time to start this thing going and I need to chill a little. I just know as the previous poster stated, time = $$$ in terms of holding costs, so that plays into this. Heck, it's costing me 160 month just to have the lawn maintained. Add the utilities, mortgage and insurance into the mix and time = money!!! Thank god I found another source for builders risk policy that allows me to pay every month as I go (as opposed to the 6 month non-refundable policy I had) or I would be looking at another 2K for insurance by the end of this month. I am at a loss for other ways to achieve this, but you can bet I'll keep searching until I come up with some. I'm just afraid, that ultimately, I may be forced into bribing the agents with additional incentives to "do their jobs". In the meantime, I have other areas that demand my attention, so I think I need to go find some literature on how to "clone myself".
Thanks again for all your input
As I stated, I'm in construction for over 34 yrs, so If I can ever be of assistance, don't hesitate to ask.
Dave
Giovanni
BTW...I know your neck of the woods very well. Spent 10 years in Coral Springs. left there in 1989. Loved the weather, but s fla had become a zoo by then for me. I understand that that area offers a pretty good return on investment on these types of rehab projects. Much better than here in Pittsburgh.
Regarding the bonus commissions. My original idea was to have a layered structure increasing in percentage, based on the final purchase price. But it was contingent upon being done within a specified time frame. I don't know if this will be bad to implement at this time or not. But I do know, that on the next house (which is only a few blocks away from this one) the bonus commission may be built into the agreement right from the start. One thing about me, I rarely make a mistake the 2nd time, when the mistake is a hard lesson learned.
Dave
I like to take care of the $$$ details in the beginning to prepare for any forseeable circumstances. Other issues inevitably always come up that need attention, and the last think I want to worry about then is how to make a profit.
Yes it is a ZOO here. Just multiply what you saw by 20 ! But I wouldn't want to live anyplace else right now. I sent you a PM on one of my properties for input.
SG
davezora,
I suggest you have a brokers' open house (with you there as well as your listing agent). Invitations delivered personally (by whomever) to all the agencies in the area. Food and refreshments. Weekday say 11:30-2:00. Prepare a handout listing features and amenities.
The goal, obviously, is to get the area agents into the house and hope that getting them into and through the house changes their perception about its value. However, if you don't get activity within 2 weeks of the brokers' open, I suggest you drop the price.[ Edited by NancyChadwick on Date 05/12/2004 ]
Nancy
I appreciate your response on this matter. That is a wonderful suggestion. And we did, or rather my listing agent did have a realtors open house with all the appropriate hand-out literature. Only one agent showed up (another agent from the same broker-different office). When I inquired as to why she felt no one showed for it, her response to me was..that basically, real estate agents are lazy. They prefer to wait for something to happen as opposed to making something happen. Now whether or not she invited other agents in a timely and appropriate manner I really can't attest to. Hence you can possibly begin to understand my frustration. I would not have a problem if I have to lower the price of the house if I had someone explain to me why the price is considered too high. But to arbitrarily just lower my price after 5 months of hard work, because people who haven't even seen the property are telling me the area won't substantiate this "price level" just doesn't sit well with me. Give me tangible proof to substantiate their position and I will concede to it. Offer me preconceived notions and old adages and I will do my damndest to support my contention that I can.
Dave
Dave,
Glad to meet you.
I have been following this post, so there is one question that has been running through my mind.
Did the listing agent tell you before or after you signed the listing agreement the house was priced to high?
John $Cash$ Locke
John
AFTER. Even before I ever bought this house and gave her a list of the proposed upgrades she told me and backed it up with a CMA that the house would be 319-329K. And she was in the house on numerous occassions during the rehab process telling me the same things. NOW...the price is too high!
Dave
Dave,
I mean no disrespect to your listing agent, but I don't buy your agent's explanation as to why all but one of the area agents didn't come to the brokers' open. And as you indicated, you don't know what "marketing" was done to push the brokers' open.
It sounds as if the value of the homes in the immediate area of your property are significantly lower--is this correct?
If so, this is a hard sell. Your property is "top dog" in comparison to the value of its surroundings. I don't know your market, of course, but my experience in PA is that unless you're talking a 100% custom home, the property's value is going to be "tainted" by the lower values of the properties surrounding it.
I was the listing agent of a parcel of land in a township that didn't have any more new construction. The homes surrounding my listing were at least $100K lower than what the new homes would sell for on my listing. I had great difficulty persuading builders that they could sell $300K new homes in that area. I finally succeeded because
new construction didn't exist elsewhere in that municipality so this was a unique opportunity for a builder. People wanted new homes but the township was built up. There was a pent up demand for new homes.
Your situation is different. Even if you get a buyer willing to pay your price, you may still have a major hurdle to get over when the lender has the appraisal done.
If you are going with the bonus idea, I would make the bonus dependent on a certain time frame i.e. - u/c within the next two weeks, four weeks, etc. Also, ask your agent about every single marketing strategy he/ she is using and ask them to give it to you in a schedule form. What occured week1, week 2, what is planned for week 3, etc. Broker Open, Mass e-mail to all agents in your area, newspaper ads, internet presence, virtual tour, relocation company marketing, local business and school admin depts, home magazines. In your price point, you are looking at a more sophisticated demographic - make sure the marketing materials reflect this and make sure the marketing is targeted properly. Make your agent work for it; as a Realtor, I can tell you that investors are a very valuable commodity and can represent multiple transaction as you very well know. Don't be afraid to use it.
Dave,
So the listing agent to get the deal gave you mis-information, now you have spent your money and the price is to high. It's the agents responsiblity to give you accurate pricing information not a give this price to get the listing deal.
This is not uncommon, so fire the agent and the broker as long as they have in their mind that the price is to high, they will just be a bag of heavy sand around your neck.
Get an appraisal the way the house stands now, let's see how far off this agents guess was on your property. Then in your mind you will have an accurate figure that the property will sell for.
Then I would list with someone who has a track record of selling houses, along with a right to sell it yourself, say they get 1% if you do it yourself. There is no one that knows the amount of labor, money and sweat you put in this property like you do.
John $Cash$ Locke
CaseyEllsworth,
Glad to meet you.
Now you are talking business, good post.
From what I am reading you would have handled this deal differently, not many times I compliment a realtor, but your plan of action to help a seller makes sense.
John $Cash$ Locke
Dave,
Listing agents should always give the seller a proposed marketing plan as part of their listing presentation, regardless of the price tag of the property. However, a marketing plan is no magic wand and certainly is not one at this point in this situation.
If you decide to get a second opinion as to value (and I'm not necessarily recommending that you get an appraisal done), I would make sure that the person is truly familiar with the area and that you clue him/her in on the current marketing results (or lack thereof).
I have seen it happen many times where a seller has difficulty selling a property so they get an appraisal. The appraiser comes up with an "aggressive" value. The seller and listing agent point to the appraisal and keep trying to convince buyers and their agents that that's what the value is of the property. It gets them nowhere real fast.
The real bottom line is what the buyers believe is the value. That's what you have to wrestle with here. And I'm not sure that getting an appraisal in a vacuum is the answer.
If you want to keep the listing agency, then I think you should sit your agent down (with or without her broker involved) and start pulling up market data for real comps.
Nancy
thank you again for responding with your input. I am in agreement with you regarding this appraisal. Besides, eventually, unless the buyer intends to pay cash (unlikely) they will have to get the property appraised anyhow. So attempting now to substantiate my price with an aggressive appraisal value only delay my problem, it doesn't solve it. Yes, the value of the house must be determined by the buyer. And this is exactly why I must get people physically into this house to sell it at the determined price. If I am able to do that, then I know this house will sell at the right price.
I have requested a meeting on site with the listing agents office manager (who supposedly has 30 years RE experience) to discuss strategy and implement a plan to help us all achieve our objective here.
Thanks again
Dave
Nancy
Forgot to add, this meeting requested is with the office manager and the listing agent as well.
Dave
As a recent first home buyer, I will tell you this, maybe it'll work wonders for you. Anytime that I was driving, looking at properties or sometimes just doing my daily running, I called up on any houses that were marked REDUCED. Sometimes taking a simple 10K off of the asking price will help, and a buyer is always looking for a deal to "fall in love with". I know, I've been there just last month or so. PRICE REDUCED says "we'll work with you, we're flexible" and that draws some buyer in. I can't say you'll get offers that day, but I'm sure you'll be able to show the house. Also, since you have a Seller's Agent, they work for YOU not the homebuyer. Vice Versa for the Buyer Agent. If they are undermotivated, I'd sooner let the contract expire and go to a new company to list than offer them more money if they can at least "look busy". I say look busy because it could be sheer luck that your house got seen/ sold the very next day after offering a bonus. You could end up paying for more work that you really didn't get. Good luck.
Krissimazon
your point is well taken. And I may consider that tactic. But only after i have been convinced that this price is too high. At this point, all I have is a few opinions that the neighborhood won't substantiate this forced appreciation on this house. There are several houses in this immediate neighborhood that are valued higher than the 319K i want for it. And virtually none of them have the upgrades and updating that is done to this house. I know, I walked them before I ever bought this particular piece of property. They all needed updated kitchens and baths, not to mention various other areas. So, I didn't go into this blindly. And it grates on me that these REA's are ignoring this house because they have convinced themselves that no one will pay more than 280-300K for this place. This place wouldn't end up being the nicest or most expensive house in the area, but it would be in the top 5. I know lots of people who "would enjoy" owning the "nicest house on the block". I don't believe that heir arguement holds water. And won't, until someone substantiates it with data to me. Opinions aren't going to cut it. Too much blood sweat and tears went into this house to just give it away. And I am convinced that if I lower the price to 300K, someone will pop right up and steal it. That's not going to happen without a fight, so to speak.
I can't really afford to let the contract expire and hire another firm. The 6 month contract was just signed 3 weeks ago and besides I have holding costs of nearly 1500 month, so that is a motivator for me and it should be a motivator for them.
Dave
Dave,
I think that the on-site meeting is a very good move here, and I hope it is productive for you. Please keep us posted on this. Good luck.
Nancy
Dave,
I think that the on-site meeting is a very good move here, and I hope it is productive for you. Please keep us posted on this. Good luck.
Nancy
Dave,
John, Nancy and others here have given you great advice since we last talked....
And I have one other long shot possible solution that I remembered yesterday. For once you have determined your price is too high. Nancy or someone else, as a realtor, may be able to shed more light on this tactic.....
Despite your concerns of a setback due to lack of exposure to buyers, and provided that your local market is strong, you might want to have buyers open houses scheduled. This seems to be increasingly used here in my area, just as Nancy Chadwick had mentioned the Brokers Open House.
It seems that the Sellers are determing the lowest price they would accept and scheduling Buyers open houses about 4 times over lets say a 2 week period "exclusively", with there low price as an opening bid. In other words no one can see the house except at those "scheduled times" (maybe 3-4 hours each day) and your realestate agency is responsible for aggresively marketing the home to other brokers, through MLS, etc. to get as many potential buyers in the property and get as many offers as possible. (they get another chance) Ultimately the Seller gets much closer to what they wanted for the home to begin with. Although, this does not eliminate the question of Appraisal amount, but does give opportunity for muliple offers/contracts in any case.
I have have seen homes that seemed invisible draw a lot of attention this way, generate an impressive response from buyers, and plenty of back-up contracts, and negotiating opportunities in a very short period of time. It's almost the old "take away" sales method.
I have also seen this implemented at different stages of the marketing process, so I dont think it is unreasonable.
Just a thought.
SG
Giovanni
There was a buyers only open house last wekend both days. And there is another scheduled for this sunday. But the opening bid concept intrigues me. I am meeting with the listing agent at this property tomorrow evening along with her office manager. I will bring this idea up for them to comment on. I'm a little weary from having to dedicate my time to researching true comps in the area (again). to substantiate my contentions. Which they do.
Thanks for the advice.
Dave
davezora,
I am also a Realtor. I respect everything that Nancy says and brings to the table. But I have to go with Casey and John on this one. I believe that an appraisal will either give you back bone or a reality check to your marketing. For $250 which is small compared to your $1500/month holding costs, I think it would be a good idea. The fact is that unless you get a cash deal, the bank will only loan on the appraised value, which will be determined by recent sales of similar homes in your area. By similar, I mean similar in square footage, number of ba, garages, etc. Though I have no doubt your home is beautiful and now the best on the block, there is a big difference between good selling points and what actually adds value. I hope that your agent did not base your after rehab value on paint, molding, and expensive fixtures. Though it will carry some weight, I fear it may not be the 110k you're looking for.
Case in point:
1. We bought our previous home on a foreclosure. We lived there three years, painting, putting pine on the walls, etc., etc., I put 10k into the basement to waterproof it inside and out. I didn't know until we sold it 3 months later to relocate that all I had done was added a lot of good selling points. By the time I paid the basement contractor and my Realtor (before I became one) off, I ended up bringing 3k to the closing table myself. We had an appraisal done before we put it on the market, priced it at appraisal, had 4 showings, 3 offers and an accepted contract in 14 days.
2. When we bought our current home last year for 129k, it appraised at 134k. I went to refi this year, thinking I would have a minimum of 3% appreciation, cash out the equity and buy my first investment prop, an appraisor pre-comped it and said the best they could do was 130k. What!? How did I lose value? My home is the nicest on the court! Recent sales of "similar" homes in my neighborhood started selling for 119,9. Bottom line....comps rule, or so they are telling me. That being said, make sure YOU pick the appraisor and YOU pay for it. Because I promise you, the first thing you will hear is "Did your Realtor pick and pay for the appraisor to get the value you wanted?" Also I don't care what the other agents in the office are saying, they are not buying the place. I want to know what the buying public is saying. Don't let them stop marketing because of what other agents are saying. Like Casey said, ask for a weekly report. But not just what on what marketing is being done, but feedback from the buyers who see the home. Believe it or not, not everyone in that price range is working with an agent. Hold an open house on Sun. afternoon open to the public. Put out all the signs, bells, and whistles. Just by your curb appeal, you should get some activity. They won't know until after they are inside what the price is. Then listen to their feedback. Yes your Realtor should be professional enough and compitent enough to price and market your home appropriately. But I also know how easy it is to get a license and realize that it is no different than any other business. There are good and there are bad. Their bonus and reward should be your future business for doing you a good job, not for doing what you hired them to do in the first place. Best of luck to you and keep us posted on how it turns out.
Hello,
just a thought, but how about selling the home on L/O basis? This way your asking price is justified due to the time frame, and you can still put some moola back in your pocket for the ..well , part of the rehab expenses.
Chris
Larrynut
Thank you for all of your input.. My problem is this, the house sits in a rather unique neighborhood. There are houses that range in price from 2ooK to 4ooK. and the majority are 2000-2500 sq ft. most are 4/2/2 homes. these things will vary, but by and large they are comparable in these respects. The improvements we have made are mainly tangible ones to all the major important areas. not simply a new roof or new moldings (although we did add crown moldings and solid 6 panel doors) just to sweeten the deal, so to speak. New updated kitchen, baths, additional bedroom/den. so at this point, I am totally confused. I spent the entire day yesterday, walking other comparable homes in the nearby areas. And several were listed at 340-350K, and do not offer what this house brings to the table. My contention is this. if this house can be seen by some potential buyers, then I bellieve thay will appreciate what it has as compared to others currently on the market and I am banking that if they had a choice to make on a house they would choose this one for what I am asking. Your point is well taken about the REA's and what they SHOULD be doing to show this house. Now I just have to get them to do it. Everything else will take care of itself.
Thanks again
Curly
The L/O idea was originally considered. But after researching, it was determined that the people buying homes in this particular area , by and large, don't lease houses. Rentals are virtually non-existant here. so we decided after having a CMA done using this house with the proposed upgrades against other comparables in the area. That is what produced figures of 329-349K. Hence our reasoning for this endeavor. I will know better after this evening whether or not we are in line with our belief. I will keep everyone posted on this.
Again, thanks for the input
Dave