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Old 12-28-2007, 12:37 PM
 
8 posts, read 16,812 times
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My wife and I sold our home in Palm City, FL closing the end of March 2007. It was on the market for 4 months. We moved to Raleigh, NC.

First of all it helps to have some things in your favor such as a lot of equity and living in a top rated school district. If you're upside down (owe more on your loan than the home is worth) this will either be very painful financially or virtually impossible and I'm sorry about that.

If you don't have to sell your home right now then don't. It's not the time to put your home on the market. If you must sell, then the #1 factor right now is PRICE. Make sure you price it right the first time. You can't focus on the fact that your home was worth $50,000 more a year ago than it is worth now. The biggest mistake people make is to say "well, I'll price it $30,000 lower than what I could get last year". WON"T WORK. You must price it at $50,000 and in a declining market you might have to actually price it $80,000 lower if you truly want to sell.

If you have good equity, don't get greedy....

Case in point with me: Our house appraised April 2006 for $600,000. We decided to put it on the market in December 2006 and had another appraisal done that showed it was worth $540,000. That $500K price point is important so we priced it at $499,900. We sold at full price in 4 months agreeing to help the buyer with some closing costs.

5 months later a home exactly the same as ours in terms of bedrooms, pool/spa, age, etc in the same development that was 750 sq ft LARGER sold for $35,000 LESS!! The "Zillow Estimate" on our home now is $465,000.

First thing we did was stripped the house of all personal pictures/items and excess clutter making the house look almost new on the inside. The house looked immaculate when someone walked in.

We sold FSBO but used a discount service that put us in the MLS and on Realtor.com as a "Showcase". We offered a 3% commission to any agent that brought a buyer. We held Open Houses on some Saturdays/Sundays and put ads in the paper on about 4 occasions advertising the Open House. We had over 40 showings and two lowball offers before selling. We ended up paying a 3% commission and some closing costs for the buyer.

Sales is a numbers game so you have to get showings....whatever it takes.

I'm not a real estate agent either.
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Old 12-28-2007, 03:47 PM
 
548 posts, read 389,931 times
Reputation: 126
Quote:
Originally Posted by hughwpage View Post
My wife and I sold our home in Palm City, FL closing the end of March 2007. It was on the market for 4 months. We moved to Raleigh, NC.

First of all it helps to have some things in your favor such as a lot of equity and living in a top rated school district. If you're upside down (owe more on your loan than the home is worth) this will either be very painful financially or virtually impossible and I'm sorry about that.

If you don't have to sell your home right now then don't. It's not the time to put your home on the market. If you must sell, then the #1 factor right now is PRICE. Make sure you price it right the first time. You can't focus on the fact that your home was worth $50,000 more a year ago than it is worth now. The biggest mistake people make is to say "well, I'll price it $30,000 lower than what I could get last year". WON"T WORK. You must price it at $50,000 and in a declining market you might have to actually price it $80,000 lower if you truly want to sell.

If you have good equity, don't get greedy....

Case in point with me: Our house appraised April 2006 for $600,000. We decided to put it on the market in December 2006 and had another appraisal done that showed it was worth $540,000. That $500K price point is important so we priced it at $499,900. We sold at full price in 4 months agreeing to help the buyer with some closing costs.

5 months later a home exactly the same as ours in terms of bedrooms, pool/spa, age, etc in the same development that was 750 sq ft LARGER sold for $35,000 LESS!! The "Zillow Estimate" on our home now is $465,000.

First thing we did was stripped the house of all personal pictures/items and excess clutter making the house look almost new on the inside. The house looked immaculate when someone walked in.

We sold FSBO but used a discount service that put us in the MLS and on Realtor.com as a "Showcase". We offered a 3% commission to any agent that brought a buyer. We held Open Houses on some Saturdays/Sundays and put ads in the paper on about 4 occasions advertising the Open House. We had over 40 showings and two lowball offers before selling. We ended up paying a 3% commission and some closing costs for the buyer.

Sales is a numbers game so you have to get showings....whatever it takes.

I'm not a real estate agent either.
Great post. In the end it has to be a business decision and many times business decisions involve cutting ones losses. Unfortunately many sellers are going to make their holes deeper and deeper by holding onto bubble prices and/or waiting for a 'recovery'.

By the way, I'm not sure what a recovery even means since the fundamentals never supported the price increases in the first place. Seems to me the recovery should refer to prices coming way back down to historic norms. We need to recover our relatively inexpensive costs of housing, we do not need to recover to peak bubble prices.
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Old 12-28-2007, 07:52 PM
 
Location: Orlando FL
1,065 posts, read 3,737,412 times
Reputation: 424
Quote:
Originally Posted by CJFlorida View Post
Great thread. We all know that some houses are selling, so what are those people doing right? I will let others expand on it, but to me it must start with one thing....pricing. (Assuming people are doing the basics, cleaning, painting, getting the house ready for sale.)

Since the MLS sold prices are delayed, and incentives are not included, how do we know the proper listing price? Since we only get the "biggest decrease in home prices" information from the main stream media months later...how do we avoid chasing the market down?

How about rent multiples? If I find 3 houses in my neighborhood that are comparable to the one I want to sell, and they are renting for $1500-1700 per month, including all HOA fees and lawn maintenance....what should my house be listed at to sell fairly quickly?
True,

MLS sold prices are delayed, at a minimum usually the 30 days it took from contract to closing, and it is very tough to figure out exactly what kind of incentives were involved besides calling the listing and selling agent and asking. It's pretty safe to assume just about every sale nowadays involved at least some kind of inventive to the buyer like paid closing costs.

One should only use rent multiples, or better yet cap rates, to determine the asking price of a property only if one were looking at rental investment property. A good way to predict the theoretical lowest price a home should sell for would be to compare how much a similar home would rent for vs. how much it would cost to carry a mortgage with taxes and insurance. Theoretical of course.

In today's market you have to look at what has sold AND what is active. Whether active or sold, you have to go with the lower of the two. If all active comparables on the market are still priced much higher than comparable solds, count yourself lucky, price it a tad over what solds comps come in at and be able to look like a great deal compared to the other overpriced actives. In Jungle Georges quoted post it seemed like they were just chasing the market by lowering a tad under sold comps AFTER they sold, in all likelyhood the actives were dropping faster than the previous solds setting the new price level (this is happening in my own neighborhood now with 220k sold comps but actives now priced at 190-200K). Depending on how far out of whack your local supply and demand is should indicate just how aggressive you want to price.

Until inventory levels drop people will continue to have to aggressively price if they want to sell. Eventually when inventory drops to normal levels (could be a long time off) dropping prices will slow and eventually stop. If inventories stay high (ie builders keep building, more foreclosures, more sellers keep coming on the market etc), it's possible prices will drop below what area incomes can support. Eventually inventory corrects itself and a normal appreciating market will return.

When the "normal" market returns sellers won't have as much competition and can slowly raise prices, pricing weighted mostly on sold comps as active competition will be limited.

Of course this all assumes the house isn't located badly, presents well, and is properly exposed to the market.

Last edited by GregTraub; 12-28-2007 at 08:01 PM..
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Old 12-28-2007, 09:54 PM
 
Location: Living in Paradise
5,702 posts, read 22,233,485 times
Reputation: 2986
Can the the Realtor provide the incentives that were involved in the sell? If this is possible we can all benefit....
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Old 12-29-2007, 11:11 AM
 
Location: Orlando FL
1,065 posts, read 3,737,412 times
Reputation: 424
It depends from realtor to realtor I'd think. I haven't had any realtors ever call me up and ask, and only once did an appraiser call me to ask....since it was already disclosed on the MLS listing, I gave them the info.

I'm not sure if there is a legal or ethical obligation to disclose or not disclose incentives, it's never come up with me so I never looked into it.
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Old 01-01-2008, 06:14 PM
 
Location: Satellite Beach, FL
149 posts, read 642,279 times
Reputation: 38
From what I am hearing, many closings now have the seller picking up most if not all of the closing costs in addition to deep discounts on their asking prices.




Prodromos Borboroglu
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Old 01-08-2008, 06:47 PM
 
89 posts, read 266,989 times
Reputation: 36
Default Please Help - Need Advice

I live in Lake Worth. My house has been on the market for a little over 30 days. I listed it at $300K and agreed to lower the price to $285K after 30 days. I cannot go under $285K. I paid $220K in 2003. I put approximately $50K into this home. I plan on moving out of state and I don't want to be in the same situation that I am in here, meaning living week to week. We figured that if we get $285K we would just have enough to pay off our bills and moving expenses and putting a down payment on another home. If we go any lower after all the fees we might as well not move. Well, I got and offer today. Someone saw my home when it was listed at $300K and now that it is $285, they made an offer of $260 and we pay 3% towards their closing which they figured out at $8,000. I am the second lowest (for my floorplan) in my community with much more upgrades that the lowest. I didn't take the offer. Should I wait and see if I get $285 FIRM. I told the realtor that I don't have any negotiating room and I am a little upset about that. I shouldn't have agreed to down $15K. I just don't know what to do. Do you think someone may walk through my door and give me my asking price. It is in a very desireable community called Smith Farm. I am hoping someone can give me an honest anwser.
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Old 01-08-2008, 07:18 PM
 
2,313 posts, read 2,393,755 times
Reputation: 471
Quote:
Originally Posted by jorobda View Post
I live in Lake Worth. My house has been on the market for a little over 30 days. I listed it at $300K and agreed to lower the price to $285K after 30 days. I cannot go under $285K. I paid $220K in 2003. I put approximately $50K into this home. I plan on moving out of state and I don't want to be in the same situation that I am in here, meaning living week to week. We figured that if we get $285K we would just have enough to pay off our bills and moving expenses and putting a down payment on another home. If we go any lower after all the fees we might as well not move. Well, I got and offer today. Someone saw my home when it was listed at $300K and now that it is $285, they made an offer of $260 and we pay 3% towards their closing which they figured out at $8,000. I am the second lowest (for my floorplan) in my community with much more upgrades that the lowest. I didn't take the offer. Should I wait and see if I get $285 FIRM. I told the realtor that I don't have any negotiating room and I am a little upset about that. I shouldn't have agreed to down $15K. I just don't know what to do. Do you think someone may walk through my door and give me my asking price. It is in a very desireable community called Smith Farm. I am hoping someone can give me an honest anwser.
The most likely thing will be, you may never see another offer of $260,000 and in a short time will be wishing you had taken it. I made a sale at a price $30,000 below what I had previously turned down. It is very easy to just chase the market down always asking just a little more then people will pay. I would be on the phone tonight with the realtor saying, "TAKE THE OFFER".
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Old 01-08-2008, 07:21 PM
 
548 posts, read 389,931 times
Reputation: 126
Quote:
Originally Posted by macguy View Post
The most likely thing will be, you may never see another offer of $260,000 and in a short time will be wishing you had taken it. I made a sale at a price $30,000 below what I had previously turned down. It is very easy to just chase the market down always asking just a little more then people will pay. I would be on the phone tonight with the realtor saying, "TAKE THE OFFER".
I think I am totally exhausted that people can be surrounded by a collapsing bubble and not know it.

1. I doubt the offer was going to pan out. Even if the potential buyer was qualified, appraisers are being super strict. Not many are writing for much more than 2003 prices in Palm Beach County and Lake Worth. Upgrades are a dime a dozen, lenders are protecting themselves now and making up for past sins.

2. I bet that offer maker is long, long gone. They have a huge inventory to choose from and won't even waste another moment when someone turns down a great offer like that.
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Old 01-09-2008, 01:35 AM
 
Location: Orlando, FL
973 posts, read 1,990,629 times
Reputation: 382
Quote:
Originally Posted by jorobda View Post
I live in Lake Worth. My house has been on the market for a little over 30 days. I listed it at $300K and agreed to lower the price to $285K after 30 days. I cannot go under $285K. I paid $220K in 2003. I put approximately $50K into this home. I plan on moving out of state and I don't want to be in the same situation that I am in here, meaning living week to week. We figured that if we get $285K we would just have enough to pay off our bills and moving expenses and putting a down payment on another home. If we go any lower after all the fees we might as well not move. Well, I got and offer today. Someone saw my home when it was listed at $300K and now that it is $285, they made an offer of $260 and we pay 3% towards their closing which they figured out at $8,000. I am the second lowest (for my floorplan) in my community with much more upgrades that the lowest. I didn't take the offer. Should I wait and see if I get $285 FIRM. I told the realtor that I don't have any negotiating room and I am a little upset about that. I shouldn't have agreed to down $15K. I just don't know what to do. Do you think someone may walk through my door and give me my asking price. It is in a very desireable community called Smith Farm. I am hoping someone can give me an honest anwser.
I agree with the last two posters - if you want to move, be ready to accept one of the first and few offers you're going to get that have a mortgage approved. There are plenty of desperate sellers out there willing to take much more than $40k off their original asking price, and as prices continue to fall you're going to see $260k be the starting point for negotiations. I can't tell you how many of my coworkers regret not taking an offer months ago that looked 'too low' then, but would gladly take now. People are trapped in their houses until prices become reasonable again. Look at it from the buyer's point of view - why buy now if they can wait another six months for a lower price? If someone shows up with an offer they're ready to sign on, take them seriously and think about how much of a headache that extra $25k is. Is it worth being trapped any longer? Stop the bleeding now and move on to the next part of your life.
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