Real Estate: To raise or lower my home price in rural mid-Michigan? (Midland: for sale, houses)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We listed our home 61 days ago, and had 6 showings in the first two weeks. Then...nothing. No one is calling on the house or showing any interest. Yesterday we had our second open house and not one person showed up. What we have heard is that homes below a certain price point are being snapped up in our area, but other realtors are also reporting that homes in our price range are just sitting. Our next door neighbor listed their home a week before ours - their house is 3200 square feet, no basement, 3 bed 2.5 bath, they listed it for $300,000, and it sold a few weeks ago. Our home is 3400 square feet (including the walk-out basement), 3 bed 2.5 bath with large finished bonus room, home theater, sand volleyball court, 2.2 acres, home office, and we listed it for $279,900. We felt that our neighbor's home was over-priced, and yet it sold fairly quickly. Feedback from our six showings was all positive - "showed well", "beautiful home" - no one gave any criticism of the price. Now our agent would like to lower our price to $274,900. On the other hand, our neighbors encouraged us to raise our price to $300K in order to attract a different buyer. We want to make the right decision. We do plan to discuss the option of raising our price with our realtor -- just throwing this idea out there for some discussion if anyone has any advice!
Trust your agent. While a $5K drop at that price is pretty insignificant (less than 2%), it does put you into a new range. Many buyers will filter with a maximum $275K.
I would definitely not raise it. Anyone looking at $300K is going to pay attention to the $280K homes.
From what I've noticed of the homes in Genesee County (which can't be too far since it is also mid-Michigan), homes under $200K are under contract in 48 hours or less. The homes in the $200-350K range tend to take a few weeks. Homes over $350K will take a few months. This is assuming the house is priced accordingly.
We had a similar issue a couple of years ago, selling our home in mid-Mich (more suburban/rural area than purely rural location). It was a 5BR/3BA on 2.1 acres, with finished basement, 2car attached garage and 4 car det garage. After a flurry of initial interest and showings, (again all positive FB), things dried up, and our agent recommended we drop the price - I did, but just a bit (price changes, even minor ones, tend to "bump" the listings in online searches), not nearly as much as she wanted (she actually wanted to drop it below what we paid, even though the tax assessments and comparable market assessments showed homes increased ~5-7% in the three years we owned it). This was really a case of a lazy agent, who just wanted to sit an let buyers come in, rather than going out and actively marketing the home. Our home was in a market segment "no-mans land" where it didn't appeal to the lower end buyers looking for the 3BR/2BA and 5 acres of farmland for 140K$, and was priced below the executive/manager buyer type looking for the 300-350k$ home in a subdivision. So it required active marketing which she seemed unable or unwilling to do. So I fired her before the 6mo listing contract was up and used another agent that I knew was successful in the area. We got a contract within 2 weeks after that, without having to lower the price.
It may be that your agent isn't used to selling homes at that market segment/price-point, maybe they mostly sell just to first-time buyers, whatever. Find out what the bulk of their sales are - 80k$ starter homes or homes for 300k$? So I don't agree that you just have to lower the price - that just makes it easier on the agent, and that's always the first thing a lazy agent recommends. But a good agent will bust their but to sell your home if it is is fairy priced. Did they provide you with a CMA (comparable market analysis)? If your home is in comparable condition as your neighbor's, with similar features, amenities, school district, taxes, etc., then it should be able to to be marketed at a similar price point. Even your neighbor seems to think you are priced too low and are not attracting the right buyers. It is not necessarily true that someone looking at 300k+$ homes will see yours - in order to filter out too many useless results, they could set up the search so that it has a min of 300k$ or 299k$, and might never see your home, thinking they wouldn't be interested in anything under 300k$, or that homes under 300k$ wouldn't have enough acreage, etc. Nobody searches from 0K$ to 300K$ - too many results.
I suggest before lowering your price any find out from your agent what kind of homes they typically sell, ask for a list of most recent (12-18 mo) closings, look at the other listings they represent. Also ask them specifically what they are doing to actively market your home (other than putting it online on all the normal sites and having an Open House). Are they, for example, calling the relocation/HR departments of large local employers to find out if any new executives/managers have been hired and are looking for a home? Or calling a colleague who maybe specializes in "retirement estates" or higher-end properties to see if they have a buyer looking for something like yours?
We are up in Midland area, and house sales are languishing due to Dow taking over Dow Corning last year, and so many job cuts. There's houses for sale in your range and much higher, and everybody else under that range sold out and moved since last Summer. Or gave up selling, and are sitting tight for the moment.
So, little inventory in the range most are buying, and the buyers KNOW it's a buyers market and are willing to wait to find the "perfect home".
We put our house on the market last year 1st week of July, and it took us until end of January this year to sell it. It should have sold the first week... So many people were almost giving away their houses price wise, it was horrible.
We had a similar issue a couple of years ago, selling our home in mid-Mich (more suburban/rural area than purely rural location). It was a 5BR/3BA on 2.1 acres, with finished basement, 2car attached garage and 4 car det garage. After a flurry of initial interest and showings, (again all positive FB), things dried up, and our agent recommended we drop the price - I did, but just a bit (price changes, even minor ones, tend to "bump" the listings in online searches), not nearly as much as she wanted (she actually wanted to drop it below what we paid, even though the tax assessments and comparable market assessments showed homes increased ~5-7% in the three years we owned it). This was really a case of a lazy agent, who just wanted to sit an let buyers come in, rather than going out and actively marketing the home. Our home was in a market segment "no-mans land" where it didn't appeal to the lower end buyers looking for the 3BR/2BA and 5 acres of farmland for 140K$, and was priced below the executive/manager buyer type looking for the 300-350k$ home in a subdivision. So it required active marketing which she seemed unable or unwilling to do. So I fired her before the 6mo listing contract was up and used another agent that I knew was successful in the area. We got a contract within 2 weeks after that, without having to lower the price.
It may be that your agent isn't used to selling homes at that market segment/price-point, maybe they mostly sell just to first-time buyers, whatever. Find out what the bulk of their sales are - 80k$ starter homes or homes for 300k$? So I don't agree that you just have to lower the price - that just makes it easier on the agent, and that's always the first thing a lazy agent recommends. But a good agent will bust their but to sell your home if it is is fairy priced. Did they provide you with a CMA (comparable market analysis)? If your home is in comparable condition as your neighbor's, with similar features, amenities, school district, taxes, etc., then it should be able to to be marketed at a similar price point. Even your neighbor seems to think you are priced too low and are not attracting the right buyers. It is not necessarily true that someone looking at 300k+$ homes will see yours - in order to filter out too many useless results, they could set up the search so that it has a min of 300k$ or 299k$, and might never see your home, thinking they wouldn't be interested in anything under 300k$, or that homes under 300k$ wouldn't have enough acreage, etc. Nobody searches from 0K$ to 300K$ - too many results.
I suggest before lowering your price any find out from your agent what kind of homes they typically sell, ask for a list of most recent (12-18 mo) closings, look at the other listings they represent. Also ask them specifically what they are doing to actively market your home (other than putting it online on all the normal sites and having an Open House). Are they, for example, calling the relocation/HR departments of large local employers to find out if any new executives/managers have been hired and are looking for a home? Or calling a colleague who maybe specializes in "retirement estates" or higher-end properties to see if they have a buyer looking for something like yours?
) Open houses don't sell homes, they only get the agent more listings. They draw mostly nosy neighbors.
) The power of the MLS/syndication of listings is way more powerful than "active marketing." The chance that any one agent (or person) knows someone who is looking for a home at the exact time at the exact price at the exact location where your home is located is pretty small, a fraction of a percent. But the chance that one of the other 1000's of agents in that association knows someone who fits the bill goes up substantially (to close to 100%).
) Most (ALL) major employers already have relationships with brokerages to help refer relo's. They'll 99% of the time refer you to one of their relo specialists, who is already actively hunting for properties (and has probably shown your home already).
) It is true that a well prepared CMA and a list of things for the homeowner to do to increase marketability are the best things you can do to sell a home.
Sounds like you should get into real estate. It only costs about $2000 and 40 hours of classwork and away you go!
We listed our home 61 days ago, and had 6 showings in the first two weeks. Then...nothing. No one is calling on the house or showing any interest. Yesterday we had our second open house and not one person showed up. What we have heard is that homes below a certain price point are being snapped up in our area, but other realtors are also reporting that homes in our price range are just sitting. Our next door neighbor listed their home a week before ours - their house is 3200 square feet, no basement, 3 bed 2.5 bath, they listed it for $300,000, and it sold a few weeks ago. Our home is 3400 square feet (including the walk-out basement), 3 bed 2.5 bath with large finished bonus room, home theater, sand volleyball court, 2.2 acres, home office, and we listed it for $279,900. We felt that our neighbor's home was over-priced, and yet it sold fairly quickly. Feedback from our six showings was all positive - "showed well", "beautiful home" - no one gave any criticism of the price. Now our agent would like to lower our price to $274,900. On the other hand, our neighbors encouraged us to raise our price to $300K in order to attract a different buyer. We want to make the right decision. We do plan to discuss the option of raising our price with our realtor -- just throwing this idea out there for some discussion if anyone has any advice!
Do not raise the price artificially. Most buyers in your price range are going to be taking out a mortgage, and even if you get a lightning strike and someone (some sucker) buys your home for way over value, it will never appraise and then you have to renegotiate the sale with the buyers. No smart buyer is going to overpay in cash the difference, unless you're in a really hot area.
Did the people who bought the house next door look at your house? It sort of reads like they were for sale at the same time.
I guess I don't understand why they would pay more for a seemingly lesser house?
) Open houses don't sell homes, they only get the agent more listings. They draw mostly nosy neighbors.
Agree, I think they are best used as agent-only open houses, to get the listing agent's colleagues/partners to see the home and maybe get excited about showing it.
Quote:
Originally Posted by magellan
) The power of the MLS/syndication of listings is way more powerful than "active marketing." The chance that any one agent (or person) knows someone who is looking for a home at the exact time at the exact price at the exact location where your home is located is pretty small, a fraction of a percent. But the chance that one of the other 1000's of agents in that association knows someone who fits the bill goes up substantially (to close to 100%).
I think both can be an effective strategy. Nobody's arguing against putting it up on the regional MLS and Zillow, Trulia, Redfin, homes.com, etc. But an agent that has a lot of contacts in a smaller area should be talking to them to try and see if any of them have a buyer that would be a good match.
Quote:
Originally Posted by magellan
) Most (ALL) major employers already have relationships with brokerages to help refer relo's. They'll 99% of the time refer you to one of their relo specialists, who is already actively hunting for properties (and has probably shown your home already).
The second agent we used did have such relationships, and that was important. So I'd suggest finding an agent that already has such a relationship with local/regional employers, or works closely with a fellow agent who does.
Quote:
Originally Posted by magellan
) It is true that a well prepared CMA and a list of things for the homeowner to do to increase marketability are the best things you can do to sell a home.
And following on your later comment, it may be wise for the seller to pony up for their own appraisal to see what an objective (i.e., not beholden to the buyer or buyer's mort co) source would come up with for a market value.
Quote:
Originally Posted by magellan
Sounds like you should get into real estate. It only costs about $2000 and 40 hours of classwork and away you go!
No thanks, I've known a couple agents pretty well, having used them on multiple RE transactions (I've done 10, as the result of a couple career-based inter-state moves), and I know the crazy hours they keep and put in, in order to be really successful.
Agree, I think they are best used as agent-only open houses, to get the listing agent's colleagues/partners to see the home and maybe get excited about showing it.
I think both can be an effective strategy. Nobody's arguing against putting it up on the regional MLS and Zillow, Trulia, Redfin, homes.com, etc. But an agent that has a lot of contacts in a smaller area should be talking to them to try and see if any of them have a buyer that would be a good match.
The second agent we used did have such relationships, and that was important. So I'd suggest finding an agent that already has such a relationship with local/regional employers, or works closely with a fellow agent who does.
And following on your later comment, it may be wise for the seller to pony up for their own appraisal to see what an objective (i.e., not beholden to the buyer or buyer's mort co) source would come up with for a market value.
No thanks, I've known a couple agents pretty well, having used them on multiple RE transactions (I've done 10, as the result of a couple career-based inter-state moves), and I know the crazy hours they keep and put in, in order to be really successful.
Obviously you're not going to be a very good real estate agent if you just sit at home all day and don't grow your network, but in my experience, the best things you can do to get a home sold happen before the home goes up for sale. There are a lot of things that the seller can do to make the home more marketable for a quick sale, and it's up to a GOOD agent to lay out a plan for the homeowners of things to do and things that you don't really need to do. Your home should be looked at like a retail store, it has to be fresh, clean, bright and pop. People want new-ish looking homes. They don't want to think about toenails in the carpet that they're going to be getting with the sale.
My guess is on this home that the OP is posting about, the interior is outdated and buyers just don't want to put the time and money into it. Pinterest and HGTV have really ruined people's appetites for design trends. Houses used to stay "in style" for 10, 15, 20 years or more and now a 10 year old home can look really dated to buyers. And the buyer and their agent will assign some "value" to those updating needs that is probably far higher than what it would actually cost ("You'll need $10,000 in new carpeting" when it really would only cost $5000).
Good feedback on a house can also be deceiving. If you're in a small town, people are hesitant to be critical of a house because they may know the sellers, or know people who know the sellers. Big city buyers are much more open and honest in their criticism.
Disclaimer: I've worked in the real estate industry for 15 years, but don't really list homes any longer.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It only costs about $2000 and 40 hours of classwork and away you go!
