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we put our 2 bedroom 1 bath condo townhouse up for sale around in May.. we changed realtors in july coz the first one was up to nothing.. its a little over a month working with our new agent and she is good. the market has slowed down significantly.. at one time we were having atleast 2 showings a day.. but now its like 2 showings in the entire week..
our realtor called us last night.. and told us the price is too high. she didnt suggested anything but said she thinks it time for a price change.. its a brand new complex with stacked townhouses.. we bought it while it was under construction 3 and a half years ago.. and got the home in march this year. my realtor calculated the per square footage of the places that have sold in the area.. (just to remind there are different layout and square fooatages in the complex).. ours is the smallest unit in size.. and the price that she has gives us is the exact amount we paid to buy the place.. YES!! it feels like crap.. .sorry for the language..the thing is that we paid 5k for the corner unit and another 3k for the storage locker and God knows how much in the upgrades for stainless steal applainces, backsplash, wooden floor and bathroom upgrades. im soo disappointed.. we thought we would make a good 50k in the resale of this unit.. it seems like we would hardly make 10k.. the asking price is 40k above what we bought.. !! i know alot of you will tell me that it is way too high.. but its a place in downtown.. and all of the units of the same size as ours are on the same page.. they all are asking pretty much the same as what we are.. i spoke to some friends and they suggested we should drop the price 10k.. im thinking of taking it off the market for now and put it back on sale in april.. its no good that we cannot make any money on the unit when we waited FOREVER to get it.. what do all of you suggest? should we lower the price another 10k or should we just take it off the market.. do you think it will be worth to wait 6 months-1 year for selling? we are not in a deserate situation right now but will be in 1 year or so coz the we are expanding our family and the place will be tight..!!
one more thing.. our next door neighbour who has the same layout got an offer last night.. and they are 500$ less in price then us.. they are good friends.. they didnt tell us how much are they offered.. .should we wait and see what is the outcome of their place??
To put it bluntly, no one cares what how much you paid for it. No one cares how much money you make out of it (or don't). And there is no way at all that anyone cares how long it took you to get it.
Well, you said your realtor is good. So, it's either you trust her expertise and go with the plan or continue to sit on it and lose money. I would say if you have already had one realtor, now you're on your second one, maybe it's time to lower the price and cut your losses.
Manderly6 said it exactly right. Nobody cares how much you paid for it or put into something. These days people are interested in the most bang for their buck.
Well looks like the OP chickened out. They got the townhouse in March put it up for sale in April and are upset they can't turn it for 50K profit. I don't think they will get much sympathy.
To put it bluntly, no one cares what how much you paid for it. No one cares how much money you make out of it (or don't). And there is no way at all that anyone cares how long it took you to get it.
Agreed. To the OP, you invested in the place when the market was still hot. As you've noticed the housing market has plunged since then and just breaking even is a very good thing in this market and your situation considering many others have lost tremendous amounts. If you want it sold, take your realtors advice and drop price. If you refuse, then put it up for rent for the next few years by then the market *should* be back on it's feet. Waiting until the spring will cost you even more in mortgage, utilities, HO insurance, HOA dues,..The smart money is drop price and chalk up your loses but it's your call....
I recall your previous post where you said you back up to an undesirable street/location and it's ONLY 700 sqft. Who wants 700 sqft? Why would you build so small and then wait more than 3 years for it with 2 kids? In college, my one bedroom apartments were larger than 700 sqft!
You are well overpriced if you are listed higher than what you just bought it for a couple of months ago, and even with an appraisal noting the previous sales date, every lender a buyer tries to go through will do an appraisal audit on the place and you won't be able to sell at your price... but your realtor should know these things.
... we bought it while it was under construction 3 and a half years ago.. and got the home in march this year.
.. we thought we would make a good 50k in the resale of this unit.
it seems like we would hardly make 10k..
Locking into a pre-construction price 3 years ago is not the same thing as buying the place 3 years ago, not that it matters what you paid or when.
You closed on this place just 5 months ago. Just curious did you pay cash or finance this purchase. If the latter, what was your down payment. Is there a prepayment penalty associated with your mortgage?
If you can sell and break even at this point, you are way ahead of the crowd.
I know of many similar situations that occured in NY, during the last regionalized real estate bust, in the late 80's-90's. Former bachelor with wife and 2 small children ended up living in a studio apartments for almost a decade. The other was more fortunate in that income/savings was sufficient for them to bring money to the closing table and be grateful for the opportunity to move on.
When we treat the acquisition of our primary residence as an investment, we need to understand that all investments carry risk. The greater the expection of a ROI, the more risky the investment.
Last edited by middle-aged mom; 08-17-2010 at 02:29 PM..
If you can sell and break even at this point, you are way ahead of the crowd.
^^^ This
Whether you bought 3.5 years ago or 3 months ago, if you have turned on a television, computer or opened a newspaper in the last 3 years, you should know that real estate is not a money maker right now, (unless you buy with cash at auction and fix a place up). If you missed that memo and thought you could make $50k on a 700 square foot condo, I know of some swampland in Florida that you can make a killing on!
If the place was HIGHLY desirable, and was the only one for sale, then you can set your price and make money. But that is not the case here. You have competition, and it doesn't sound that desirable.
I have been doing real estate as an investor and agent for nearly 25 years and do believe that within some pretty narrow confines it is possible to make usable predictions of price.
In a development where there are many very similar units, be they town homes or condos or even single family detached homes it is generally easy to predict that one unit will change hands for a price that is very similar to most recent sales. Ina broader sense it is also fair to say that when units in nearby developments are compared the predictions are slightly less reliable but still in the possible range over short time frames.
If the time frame is stretched then more variability enters the picture.
Contrasting this is the likelihood that certain kinds of properties will move in similar ways to similar factors -- rising incomes ought to push prices higher, just as eased credit should, pushing the teeter totter down are factors like unemployment, demographic trends, style trends and even changes in land use...
It is rather irresponsible to assume that you could make a large return in a short time period on new construction especially in a project where the oldest units are probably showing some wear and datedness. As a general rule I have always advised folks that is best to consider any real estate in terms of a five to seven year window, this is reflected in the terms of balloon mortgages and similar instruments that markets have proven to be an acceptable period for risk mitigation. Thinking that one ought to rent for periods of their life where rapid changes in needs for space may occur more quickly than 5-7 years used to be a big reason that folks just starting out did not buy, the recent but very much past period of rapid appreciation allowed some to deviate from this profitably. Unfortunately it does not sound likely that the OP was in this exceptional window of opportunity...
Looking forward it is very very challenging to assess whether prices are likely to recover or continue to slide for many kinds of real estate in many markets. The greatest uncertainty is the continued overhang of "policy reversing" that the current political powers in Washington seem intent on driving forward. Is thee much hope that home ownership and higher wages will rise under policies of more government? I personally have fears that policies may work against both home owners and land lords so that renters really win in the midrange. If the factors that drive such decisions are at work in your situation it may be wise to get out with the smallest loss possible and regroup when conditions are more favorable. What is the immediate outlook for employment near you? What sorts of supply constraints exist for rentals similar to your townhouse? Where would go if you had a buyer right now? What price could you accept? If offers decrease how much do you believe things might fall in three months? Six? A year?
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As to the question of prediction...
