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Old 02-01-2012, 08:19 AM
 
Location: Chicago
3,335 posts, read 5,513,200 times
Reputation: 4206

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My husband and I decided to make a pretty drastic price cut on our house because we want to move. We're planning on cutting the price by about 10%, so our house will be the lowest priced home in the area. The question is, when should we do this?

The weather has been really nice this year, but it is still winter. Also, the superbowl is this weekend which will keep many people from house hunting on Sunday, which is usually a good day for it, in my experience.

So, should we lower the price now? On Monday? Or should we take the house off of the market completely for a few weeks and list it again in March? I can see pros and cons for each scenario and I just can't decide which is best.
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Old 02-01-2012, 09:03 AM
 
Location: Barrington
62,894 posts, read 42,783,703 times
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Withdrawing your home from the market for a few weeks/months fools no one because the listing DNA remains with the property.

Being the lowest priced home in the neighborhood may not have the desired outcome if all the other unsold properties are asking more than the market will bear, at this time.

What matters are the prices homes have been closing at in the past 3+/- months. Know that the closed sale price does not reflect seller concessions/ assists with the buyer's closing costs.

What properties have gone under contract and/or closed since you listed. Why did a buyer chose the other property over your own?

Sellers tend to view their homes as a unique product. Buyers tend to view homes as a fungible commodity. If not this one or this neighborhood, another will do.

I would be less concerned with timing and focus on nailing the price.
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Old 02-01-2012, 09:23 AM
 
Location: Chicago
3,335 posts, read 5,513,200 times
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Well, that's what I'm trying to do with the price; list it very close to the closing prices of the nearby homes. We were priced higher because we didn't care that much about moving, but I am just really fed up with the city and want to get out of here now. Plus, with my husband's bonus, we can afford to lower the price without going broke.

So, I'm going to put the house within $5000 of the closing prices of nearby homes. Some are higher, some lower.

The question still remains as to when I should do this.
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Old 02-01-2012, 12:15 PM
 
Location: Just south of Denver since 1989
11,626 posts, read 32,332,214 times
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Today would be good.
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Old 02-01-2012, 02:01 PM
 
Location: Needham, MA
7,774 posts, read 12,168,188 times
Reputation: 7081
Quote:
Originally Posted by nikitakolata View Post
Well, that's what I'm trying to do with the price; list it very close to the closing prices of the nearby homes. We were priced higher because we didn't care that much about moving, but I am just really fed up with the city and want to get out of here now. Plus, with my husband's bonus, we can afford to lower the price without going broke.

So, I'm going to put the house within $5000 of the closing prices of nearby homes. Some are higher, some lower.

The question still remains as to when I should do this.
You might want to talk to your Realtor about how the local market is trending. I can't imagine in a place like Chicago that you're still in a downward spiral but I wouldn't be the one to ask about that. The last thing you want to do is end up playing catch up with the market. So, if your market is downward trending you should actually price your house lower than what similar houses have recently sold for. If it's flat then you've got a good plan and if it's upward trending (less likely) then your house should go very quickly after your reduction.

Quote:
Originally Posted by 2bindenver View Post
Today would be good.
There's no time like the present! Serious buyers don't let something like the Super Bowl get in the way of house hunting especially since the local team is not playing. Go PATS!!!
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Old 02-01-2012, 04:34 PM
 
28,461 posts, read 79,924,751 times
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Default I totally understand what you are going through...

If you are in a nicer home in Ukranian Village or some other part of Chicago that is still "desirable" but glutted with a huge number of short sales and other depressed properties you really need to take a hard look at your "time on market and compare that to averages. MANY homes have been on the market well beyond six mmonths. The sad reality is that therre are too few buyers willing to risk buying "within $5k of what nearby homes sold for" when there have been prices falling by hundreds of thousands...

While it is possible that at 10% reduction is enough to get your home on the radar screen of buyers that are still skittish about jumping in, in my experience a much larger reduction may be necessary.

If you are not prepared to accept offers that might still another 20% or more below your "cut" price maybe you need to think about inviting a new agent to take over the listing, getting the advice of a different stager or similar efforts to "reposition"

The "sooner the better" is my answer for ALL OF THE ABOVE./

Quote:
Originally Posted by nikitakolata View Post
Well, that's what I'm trying to do with the price; list it very close to the closing prices of the nearby homes. We were priced higher because we didn't care that much about moving, but I am just really fed up with the city and want to get out of here now. Plus, with my husband's bonus, we can afford to lower the price without going broke.

So, I'm going to put the house within $5000 of the closing prices of nearby homes. Some are higher, some lower.

The question still remains as to when I should do this.
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Old 02-01-2012, 05:11 PM
 
Location: Chicago
3,335 posts, read 5,513,200 times
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Quote:
Originally Posted by chet everett View Post
If you are in a nicer home in Ukranian Village or some other part of Chicago that is still "desirable" but glutted with a huge number of short sales and other depressed properties you really need to take a hard look at your "time on market and compare that to averages. MANY homes have been on the market well beyond six mmonths. The sad reality is that therre are too few buyers willing to risk buying "within $5k of what nearby homes sold for" when there have been prices falling by hundreds of thousands...

While it is possible that at 10% reduction is enough to get your home on the radar screen of buyers that are still skittish about jumping in, in my experience a much larger reduction may be necessary.

If you are not prepared to accept offers that might still another 20% or more below your "cut" price maybe you need to think about inviting a new agent to take over the listing, getting the advice of a different stager or similar efforts to "reposition"

The "sooner the better" is my answer for ALL OF THE ABOVE./
Well, you hit the nail on the head... there are just so many short sales around here that it seems nearly impossible to really compete. I'm 100% positive that staging isn't the issue, it's just that there are no buyers!

I just looked through every comparable house that has sold in the last 2 years, there are only 21 total and, unfortunately, most of them are new construction, not resales. Our house was new when we bought it (built in 2007). We're looking at taking a loss of about $150,000, not including what we put into the house (which has been considerable, probably around $30,000), so it's a pretty sad state.

On one hand I want to wait it out, but on the other, I think it will probably take another 5 years to do that, at least, and I just do not like living in the city. It's a sad state out there...
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Old 02-01-2012, 07:21 PM
 
28,461 posts, read 79,924,751 times
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Default I usually harp on the over building of condos, but in some areas there was a frenzy in single family too...

In the view of too many buyers a two year old is significantly less desirable than some place that has never been lived in. If you are already at a price point at / below the point where those other 21 sales have happened and are in at least as desirable a location (which is something that was an ironclad EXCEPT when the "frenzy" was in full swing) they maybe you can try something drastic.

While I generally recommend selling a house in a vacant state it MAY be advisable IF your competition is mostly / totally "never lived in" homes to go a little "Jedi Mind Trick" on shopper. Don't just move out and leave your personalized paint / finishes behind. After you move out take off EVERYTHING that was attached to a wall, fill every nail hole, have the whole place spray painted as pale a beige as you can find. Strip any sign of the kitchen ever being used. Take the laundry appliances with you. Rip out any carpet. It essentially gives shoppers that hollow "blank slate" that MIGHT subconsciously be what some buyers "tune into" in new places...

Another "extreme measure" is do the math on what sort of rent you or someone else could expect. If you can price the place so that it appeals to investors OR you can afford to rent it out yourself that might be a way to ride things out, though honestly as someone that has been a landlord it is never easy to find tenants that pay enough / never but wear on the place unless they are up to some other kind of no-good...

If the "upside downness" you are talking about is truly a loss of $150k you might want to consider negotiating a deed-in-lieu of foreclosure, though I suspect you don't want that black a mark on your credit...

Quote:
Originally Posted by nikitakolata View Post
Well, you hit the nail on the head... there are just so many short sales around here that it seems nearly impossible to really compete. I'm 100% positive that staging isn't the issue, it's just that there are no buyers!

I just looked through every comparable house that has sold in the last 2 years, there are only 21 total and, unfortunately, most of them are new construction, not resales. Our house was new when we bought it (built in 2007). We're looking at taking a loss of about $150,000, not including what we put into the house (which has been considerable, probably around $30,000), so it's a pretty sad state.

On one hand I want to wait it out, but on the other, I think it will probably take another 5 years to do that, at least, and I just do not like living in the city. It's a sad state out there...
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Old 02-02-2012, 08:48 AM
 
Location: Chicago
3,335 posts, read 5,513,200 times
Reputation: 4206
Quote:
Originally Posted by chet everett View Post
In the view of too many buyers a two year old is significantly less desirable than some place that has never been lived in. If you are already at a price point at / below the point where those other 21 sales have happened and are in at least as desirable a location (which is something that was an ironclad EXCEPT when the "frenzy" was in full swing) they maybe you can try something drastic.

While I generally recommend selling a house in a vacant state it MAY be advisable IF your competition is mostly / totally "never lived in" homes to go a little "Jedi Mind Trick" on shopper. Don't just move out and leave your personalized paint / finishes behind. After you move out take off EVERYTHING that was attached to a wall, fill every nail hole, have the whole place spray painted as pale a beige as you can find. Strip any sign of the kitchen ever being used. Take the laundry appliances with you. Rip out any carpet. It essentially gives shoppers that hollow "blank slate" that MIGHT subconsciously be what some buyers "tune into" in new places...

Another "extreme measure" is do the math on what sort of rent you or someone else could expect. If you can price the place so that it appeals to investors OR you can afford to rent it out yourself that might be a way to ride things out, though honestly as someone that has been a landlord it is never easy to find tenants that pay enough / never but wear on the place unless they are up to some other kind of no-good...

If the "upside downness" you are talking about is truly a loss of $150k you might want to consider negotiating a deed-in-lieu of foreclosure, though I suspect you don't want that black a mark on your credit...
Luckily, we aren't actually underwater with our mortgage, even if we take a $150,000 loss. With that, we will still have enough to put 20% down on another house. The house is large (5 bedrooms) and it was a HUGE purchase for us when we bought it. We're just lucky that we've both progressed in our careers since we bought it.

Every other day I contemplate renting the house out and just moving on that way, but then I realize what a pain in the arse that would be and decide I'd rather just cut my losses. From what I've seen on the MLS, we could rent the house out quickly if we are willing to pay about $500 a month out of pocket. That's not horrible given our mortgage payments, but I know renters would ruin the house and I don't want to be a landlord.

I can't buy another house until this house is sold though. I just cannot take the risk of being stuck with two houses. I'm quite nervous about that, given the market. If/when we sell, we will probably move everything into storage and live with my parents for a couple weeks until we can close on our next place. The last thing I want is two mortgages...

What can I say, this market sucks! I did make the price change though. Maybe it will help, maybe not. Who knows...
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Old 02-02-2012, 08:52 AM
 
Location: Chicago
3,335 posts, read 5,513,200 times
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I gotta say... living in a new, never lived in house is not all it is cracked up to be! When we first moved into the house there were plumbing issues that caused the entire first floor to flood. The floors are all hardwood, so that meant we had to replace basically an entire floor of flooring only 12 days after moving in, due to no fault of our own! We had a good inspector, but the inspector could not have seen the problems we had.

Plus, people never consider things like blinds. Every single window is wide open when you buy a new place... We installed nice custom blinds throughout the house, which were not cheap. People never consider those costs. In a house the size of ours, we spent several thousand dollars on blinds alone.
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