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We have a house out here that was on the market for years. The guy wantedcwhat he wanted and he wasn't going to take a penny less. The market finally caught up. We also have those Zillow things where you can state your selling price. I can tell you if someone offered me 600k for my house...it would be a done deal. My house is worth about 350k.
It's not on the market, either.
People are very weird and emotional about their homes. Where I grew up, there's a stretch of homes where the land has gone commercial and a few of the homeowners are thinking Cha-Ching! But the fact of the matter is the buyer is going to have to buy multiple parcels, will have to tear down the existing homes and do something with water and sewer, and build a road to construct something on these parcels. They're not going to buy your house with all the updating and money you put into it. They're buying the land in its raw state.
But people have priced these lots for $$$$$$.
Yes...we have a house in this area that has been for sale on Zillow for several years @ the same price. It's an ugly house that's a total fixer upper. The area streets flood there, too. Sooner or later it will sell, I guess. I drove by one day and there were some old beaten up cars there; I'm guessing they're renting it out.
I would've thought it expired, but they didn't remove it from zillow. But there was a for sale sign on it, and zillow entries expire after a certain length of time.
I've seen sellers sit on their houses for months without selling, and they don't lower their price. Why is that? Are they just seeing what they can get?
I finally made my first offer on a house that's been for sale for months. It was overpriced, IMO, for the area. The seller finally lowered it $5k. I made an offer based on recent comps (just 2 comps,and both were higher grade...with higher end features like stainless appliances, crown molding, windows that go down to the floor, storage shed, back yards fully fenced, new a/c unit in one, etc. But they were recent comps by the same builder, I think, and similar in structure & floor plan.). The 2 comps were $106 per square foot and $118 per square foot (the latter being 4 years newer and less sf, which are usually higher cost psf). Both same size or larger lots than the house I was interested in.
I determined that the house for sell was probably worth about $107-$108 psf (it didn't have those higher end features and needed a new a/c unit and some fencing). I offered a price that was $107.50 psf. This was 6% off asking price.
Seller countered with 2% off asking price. That was still almost $112 psf and left a $10k gap. I thought about splitting the difference, but that would have put me paying almost $110 psf and still having to pay $13k for fence and a new a/c, another $3k expense, and some cosmetic updates. So even though I was willing to go up some, I opted not to counter his counter, since it seemed pointless. He seemed dug in to a certain range.
I know this isn't an exact science, and a house is worth whatever someone wants to pay for it. But really, do sellers ever sit down and really compare their houses with others that have sold recently, to see what differences there are, to get a value for their own home? Aren't their agents supposed to point those things out to them?
I'm super disappointed this didn't work out. But I just can't pay more than what the comps say is a reasonable price for a house. I'm not that sort of person. I don't necessarily need a steal, but I will pay what a house is worth, according to recent comps. (I am a cash buyer, if that makes a difference. I thought it might, but apparently didn't.)
When I get ready to put my house on the market, I will absolutely NOT list my house according to the comps in my immediate area. There is a very small range in prices (but a huge range in quality between different houses in the same subdivision), because the same agent lists nearly every one of the houses, and he's a very nice guy. The problem is, the houses sell quickly (too quickly), so it seems he cares less about the price than that he gets the most listings and sells them quickly. That tells me the homes are UNDER-priced. Nevertheless, sales are the comps. I'd love to use him because of his warm personality and general helpfulness, but he's keeping the house prices lower than they ought to be. He wins awards for selling the most homes, etc.
I put in a lot of expensive but not blatantly obvious improvements to my house over the past five years, (i.e. did not expand the living space) and they will not show up in listings usually, but I can and will wait until I get a satisfactory offer OVER list price.
Location: When you take flak it means you are on target
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You can't use ppsf. My house is modest, but I have one of the best view homes in our city. The only ones better are $400,000 more. A buyer will pay a large premium for the view, which does not appear in comps.
Sellers, very often do not need to sell their homes. Sellers very often, can wait a year or two, to sell their home. They will sell their home, if someone is willing to buy it at their price and/or terms. Sellers, may really not care if they sell their home or not, but if it does sell, they are simply going to buy another home in the same area so their is no pressure to sell.
The home is on the market, if you are willing to pay what they will sell it for. A lot of sellers are not under any pressure to sell, and no matter what you do you are not going to get them to sell at a price they are not willing to accept. That is why buyers dig in, and say pay my price or near it, or the home is not for sale to you. Everyone is not under pressure to sell, and need to sell. I have known people that had their home for sale for years, and when someone offered to buy it at their price, sold but were real unhappy someone bought it. The only reason they ended up selling in some situations, was if they did not sell they had to pay the Realtors their commission when it was a full price offer.
Buyers that buy their homes, will pay their price or nearly their price, or they will not sell. It is only buyers under pressure for one reason or another such as moving for a better job, etc., that are willing to do a lot of negotiating to a much lower price.
Even sellers who "have" to sell due to a life-changing event don't necessarily have only that option. If they bought what was truly affordable for them, they can list for sale OR for rent, and take whichever comes first to meet their needs. So a seller who HAS done their homework but finds that the comps are close to being too low to cover their current mortgage, agent fees, and closing costs without them bringing money to the table could still list for what they need or want to, see if they get that, and have a good fall back plan. Of purse, this assumes that the area is a good rental market.
This is what we're looking at right now. Unfortunately we bought the "smallest" (by 100 sq ft) house in our area of townhomes. The ONLY difference between our home and others that I've seen listed is that our master bedroom/master bath combo is smaller by 50 sq ft each since our bump outs only go from the first to the second floor instead of all the way to the fourth. We actually have a larger kitchen than most, which was what sold the house for me in the first place. We thought we would be here longer because many people in our situation who come here get "stuck" (we're military, and don't always believe what you hear about the military moving people every two years--that's officers), but at just shy of five years we will be moving. Since we rolled our VA fee in with our mortgage (didn't need to and now we regret it), we need to come out at about $5 more per sq ft than our comps in order to break even or just make a few thousand bucks when all is said and done. So we're seriously considering renting because the rental market here is HOT, and you can easily get $2500/mo for a townhouse like ours, which would cover our mortgage, a property manager, and leave some to put in escrow for repairs/maintenance.
So sellers can dig in because they've done their homework and don't actually NEED to compromise, too.
There's actually another house for sale nearby...same builder. Sames asking price. But it doesn't need the work this one did and has the higher end features like canned lighting. Larger house, too. But the listing agency is the agency my agent I just used works for, so I don't know how that would work. If the whole agency is angry with me or what. I WOULD pay more for that house because it has a fully fenced back yard and the higher end features. Roof looks newish, too.
WTH are you worrying about the listing agency? You want the house, you've hired an agent. Use the agent or fire the agent and get a new one. My God, you're the one who keeps going on about how agents are all pushy just because they want to get a deal closed- do you think they will play hard ball with you to avoid getting a deal done because " the whole agency is angry with you?"
You can't use ppsf. My house is modest, but I have one of the best view homes in our city. The only ones better are $400,000 more. A buyer will pay a large premium for the view, which does not appear in comps.
Except going by the details about the homes and lots that OP has provided, it doesn't sound like the home in question really has much if anything to make it worth more than the other homes in the neighborhood.
Quote:
Originally Posted by Jkgourmet
WTH are you worrying about the listing agency? You want the house, you've hired an agent. Use the agent or fire the agent and get a new one. My God, you're the one who keeps going on about how agents are all pushy just because they want to get a deal closed- do you think they will play hard ball with you to avoid getting a deal done because " the whole agency is angry with you?"
This! I think the fact that OP says they found a better house for the same list price is proof that she's not being unreasonable about the other one. But if it really is a better value and you do like the neighborhood, get your stuff together and make an offer!
I'm confused about the agent situation though. Have you officially even parted ways with the old agent? If so, find a new one and make an offer. The agency shouldn't care who the offer comes from, heck I'm sure one of their other agents would gladly take you on as a client. Unless the agency is really small, the listing agent of this new house probably has no clue you were even working with someone else from the agency previously.
When I get ready to put my house on the market, I will absolutely NOT list my house according to the comps in my immediate area. There is a very small range in prices (but a huge range in quality between different houses in the same subdivision), because the same agent lists nearly every one of the houses, and he's a very nice guy. The problem is, the houses sell quickly (too quickly), so it seems he cares less about the price than that he gets the most listings and sells them quickly. That tells me the homes are UNDER-priced. Nevertheless, sales are the comps. I'd love to use him because of his warm personality and general helpfulness, but he's keeping the house prices lower than they ought to be. He wins awards for selling the most homes, etc.
I put in a lot of expensive but not blatantly obvious improvements to my house over the past five years, (i.e. did not expand the living space) and they will not show up in listings usually, but I can and will wait until I get a satisfactory offer OVER list price.
I would notice your upgrades. They matter. There's more to a house than square footage.
The house I was offering on, for example, was a bare bones house. Nice house. But the neighborhood was built by the same builder, and I saw that most of the homes had upgrades, whereas THIS house was a bare bones one. Builders charge extra for upgrades for a reason. They cost, and they add to a home's value, atmosphere and finished look. Crown molding, larger windows, canned lighting, stainless appliances, good gutters. These things affect the value of a home.
I would definitely have paid more for the home, if it had had these upgrades that the other homes had.
Appraisers do look at square footage and comps. Those things matter. But they also consider if the yard is fenced, age of home, and a number of other things. So did I.
Plenty of buyers will notice your improvements, IMO. I know I would. Others won't care. My brother, for instance, doesn't care about crown moldings, upgraded appliances, or anything. But there are plenty of us who value those quality items. I know they cost...and they are worth the cost!
You can't use ppsf. My house is modest, but I have one of the best view homes in our city. The only ones better are $400,000 more. A buyer will pay a large premium for the view, which does not appear in comps.
Yes, the view is factored into the appraisal of a home.
An appraiser takes location of site into account. Location means a lot.
You start with price psf, like an appraiser does, then take into account a number of other things.
WTH are you worrying about the listing agency? You want the house, you've hired an agent. Use the agent or fire the agent and get a new one. My God, you're the one who keeps going on about how agents are all pushy just because they want to get a deal closed- do you think they will play hard ball with you to avoid getting a deal done because " the whole agency is angry with you?"
ever heard the old saw "You're not paranoid if they're really all out to get you". It might be a 5 person agency, and they do hear every war story. It might be one of only 2 agencies in the town, so her options are limited.
My last advice still holds true. Whether she goes with that same agency or not, have the next agent spell out very clearly what they'll do, and determine whether that's what you need or not. Certainly by now, the existence and practice of dual agency in the given area is known.
Last edited by BoBromhal; 02-05-2017 at 11:01 AM..
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