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. It is also possible that your parents are overinsured, .
Since the father built the house and is very attached to it, this is ultimately what I think happened. I would bet dollars to donuts the insurance agent has made the parents sign something to acknowledge they are massively overinsured, so that if the house is destroyed somehow, they get what it costs to rebuild, not what it's insured for. When I worked for an insurance agent he would do that with people although it was usually people who were UNDER insuring their homes.
You can ask the realtor for some recent sold comps, this may bring your parents down to reality. But I doubt it.
Personally I would not update a house in certain parts of the country. Very few do it in my neck of the woods. Replace roofs, plumbing as necessary, some painting but that is about it. Nothing major, mid grade appliances from HD is the norm.
First, it seems your parents trust you, not their Realtor. So you need to communicate with the Realtor, get their info, and "sell" that to your parents.
1. Unless their insurance company is going to buy the home, the insured value is 100% meaningless. and this is a point to make to your parents.
Insurance companies aren't necessarily a scam, but if your house is "worth" $650K, then they're going to take the easy way out and insure you for $650K. And 90% of us are going to insure it for that amount, even though just rebuilding the actual home might cost $400K this year.
2. if somehow they're saying "it cost us $600K" - including land - to build the home, then perhaps you can explain that a building is a depreciating asset (and I don't know what "ROA" was in your earlier post). In IRS terms, even assuming they've replaced the roof, HVAC system, and water heater, the house has been about 90% depreciated.
3. There can be no clearer signal to someone that they're overpriced than a lack of showings since the day they went on the market. Someone needs to show them how houses in the recommended price range have performed, and heck, even OTHER houses in their current price range have shown, sold, etc.
Frankly, from what you've posted, there's only 2 possibilities:
1. Your parents don't trust the information that they've been given already.
2. They don't actually want to move. And this may or may not be OK with you/the family.
Never buy or build the most expensive house in the neighborhood unless it is lake or ocean frontage. Many neighborhoods have experienced steep declines in value as industry closed obsolete plants. Then crime increased which further depressed markets. It is a recurring pattern. How are the schools? Is it safe to walk the neighborhood - at night? Can residents easily get concealed firearms permits?
There is much to consider beyond the quality of workmanship in a building. The word "home" is far bigger than the word "house". The real estate industry seldom addresses such factors regarding neighborhoods and some real estate clubs will expel members who are truthful about crime stats.
i asked them about the comps and they said the homes shown to them by realtors were not really comparable in their opinion. For example some of the homes were not brick, or didn't have certain features. I did not see the actual comps so I do not have more info. They don't want to get an independent appraisal for some reason.
But, as a realtor used to say in her newspaper column when people couldn't sell- if you list it for $10 you'll get buyers. Somewhere between $10 and what you're listing it for now is the right price.
Ahhh, Edith Lank. I loved her columns.
Another factor in the insurance value/sale value debate is that the house includes the lot and the foundation. Even in a total loss, the foundation is almost always okay, and the lot ain’t going anywhere.
It’s going to take a Come to Jesus moment to get your parents to reality. Good luck.
Sadly, this sounds spot on.
I understand, because I have the same mentality at times. Hard to get away from. Also common with those who have anxiety/hoarding issues.
Does that sound like your parents?
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