How to Discount a Dated House? (agents, sales, housing, comparable)

[Blondy]

My parents who are in their early eighties will be selling their house soon.


Its a house with great bones, built by one of the best builders in town who is still building, great neighborhood that is also beautiful, great lot/curb appeal. Everything works, doubtful anything major will be turned up on inspection. It is sparkling clean even without cleaning it up for show.


Great floorplan that is not for everyone, but popular here....split floorplan where master is on one side, other bedrooms on the other side.


Newish roof, a/c and appliances new. Neutral paint fairly new. Furnished very tastefully with high quality furniture, albeit a few family heirlooms/antiques. So something between fussy old person and home beautiful old money!


But, it is fairly dated. Built in 1995. It will be competing with homes same age some the same or worse, some totally cosmetically dated/some half way, as well as homes built in each succeeding decade with the décor from that timeframe including to present as their are still buildable lots in the neighborhood.


Problems include carpet, wallpaper, builder grade 90's kitchen cabs/corian, bathroom with green fixtures.


Their target market will be younger couples who are ready to start a family or already have one, or young retirees moving into a cheaper COLA who are not ready to downsize yet.


All of this to ask, how do you discount a sales price for cosmetic outdatedness in order to get out quickly?


I see this advice given often, but I don't think I have ever seen any formula for actually how you do this. I mean its clear to me from selling my own house that you are not giving the buyer a discount to buy a whole new kitchen or bath, but what are buyers expecting or sellers giving. Half price? Quarter Price?

[ocngypz]

First question and probably the most important.

Is it a Buyer's or Seller's Market?

[Aredhel]

Your parents need to work with a realtor who's very familiar with the local market, and who will be able to show them some accurate comps for their house. What are similar houses (in terms of location, size, age, and decor) actually selling for? That's the information they'll need to know to price their home appropriately.

[Blondy]

Originally Posted by ocngypz

First question and probably the most important.

Is it a Buyer's or Seller's Market?

Good question. I will have to research and see, I think Zillow has a meter for what that's worth.


But, its imo really neutral. There are not bidding wars for example to my knowledge.


Its Florida north of Orlando. Huge bust and one of the markets most hurt by the housing bubble debacle.


But, new construction is picking up, people are starting to sell, also realizing they cant get the inflated prices they might have gotten in 2006 and coming back to reality. Most of the underwaters/short sales are gone. Although even in my parents neighborhood there are a few........where people have sold under market to get out or kids have gotten rid of deceased parents homes at less than market value just to sell.


Part of the problem when looking at comps.


Also, part of the problem when talking with my parents.

[FalconheadWest]

Who says you need to "discount". If there are similar homes in the neighborhood that have sold in the condition of this house, you use those houses as the comparable sales to know how to price. You do NOT take remodeled houses and then try to compare this house to those houses.

[Blondy]

Originally Posted by Aredhel

Your parents need to work with a realtor who's very familiar with the local market, and who will be able to show them some accurate comps for their house. What are similar houses (in terms of location, size, age, and decor) actually selling for? That's the information they'll need to know to price their home appropriately.

I know what you are saying, but there are not a lot of comps for their neighborhood and its a small town.


So again, I would ask the question, if you knew that the majority of buyers would want to remodel your kitchen, how much would you discount the house?


If you knew the majority of buyers would want to rip up the carpet and lay hardwood, how much would you discount?

[BirdieBelle]

I've never heard of any kind of formula.

To me, the most logical way would be to find the most recent sold comps for renovated homes and then subtract estimated "average" remodeling costs.

The difficulty is that to do this you also have to know "average" remodeling costs in that area.

One other factor that makes it hard to pinpoint: Not EVERY buyer insists on gutting a dated home and re-doing everything right away, and remodeling tastes vary.

Either way, though, have your parents talk to a few agents who know their area so they hear the message from pros about how their home will be perceived by buyers.

[Blondy]

Originally Posted by FalconheadWest

Who says you need to "discount". If there are similar homes in the neighborhood that have sold in the condition of this house, you use those houses as the comparable sales to know how to price. You do NOT take remodeled houses and then try to compare this house to those houses.

Part of the problem. There aren't comps that match my parents house in their neighborhood. Hence my question how do I use the houses that have sold and plus or minus the differences.


Its a small town and there are not tons of comps to look at.

[BirdieBelle]

Originally Posted by Blondy

Part of the problem. There aren't comps that match my parents house in their neighborhood.

So the comps are all remodeled??

[NeutralZone]

This really is a question that only a qualified realtor in your parent's area can answer. There is no one on this forum that can answer your question. Don't listen to anyone else except a realtor. Make sure you talk to several, and ask them this same question. It's very important to interview your realtor before signing on with them.