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We’ve been thinking a lot about those of you who are now—or will be soon—trying to sell your house and move forward with your lives. We want to offer our perspective to those who may benefit from our recent experience and insight.
In January 2007, we listed our house for sale for the first time in 37 years. The real estate market in San Diego had skyrocketed during that time (we laughingly called ourselves "poor folk living in a rich house"). We still remembered twenty-cent bread and five-thousand-dollar houses. We paid more for our 2005 car than we did for our 1969 home.
Understand, however, that what you may see as our huge real estate profit is only on paper, only potential. We are still "poor folk," meaning that we still live comfortably but not extravagantly on our retirement income, and we have no guarantee that anything will change. To be honest, once it's all sorted out, we do not expect much of anything to change--ever!
Imagine, then, if you will, our feelings last winter when we realized how much we might be expected to pay to buying and selling realtors, at the traditional combined 6%, for the seemingly simple transaction of selling our house. [Pause here for reality check and smelling salts.]
Our reactions ranged from incredulousness to downright anger. We had never paid that kind of money for anything--home, car, anything--in our lives! Surely these realtor fees were the world's biggest ripoff. Never mind that there would also be Capital Gains taxes, while the State of California (believe it or not) would also tax our Capital Gains as personal income!
Bottom line: We felt totally abused. (On certain levels, we still do.)
That was last January. We managed at that time to negotiate realtor fees to "just" 4.5%. We still gasped and reeled, but tried to consider and honestly understand the current difficult market. Surely we did not want to sell our house ourselves in this market!
Fast forward eight months--eight long months during which our realtor/friend/neighbor has planned the work and worked the plan, has spent the advertising money and smiled the smiles--and still is doing all that, in fact, despite her own raw emotions. She has been the only reason we are still sane. Yet she has received only one offer on our house after all that time and all that money, energy, effort, and caring!--and that one offer was from an investor hoping to "steal" the place.
I won't detail realtors' costs to do business, but I have seen them outlined and they are substantial. Their commissions are not their net profit, by a lot!! We have been embarrassed, in fact, to think about the hourly wage our realtor has potentially made this year. Her potential income is like our potential profit. And in this market, neither picture is pretty! We do not envy her! In fact, we feel sorry for her!!
Our house is now listed for only three-fourths of the original listing price, yet we have chosen to raise realtors' commissions to a total of 6%. (We would raise them higher yet if we thought it would do any good.)
Our point: If you want to sell a house in this market, our advice is to hire the best realtor you can find. Don't even think about selling it yourself on a couple of websites. You're only wasting dream time. Bottom line, you'll be lucky if you sell your house even using the big guns, in today’s market. And, whether we like it or not, today’s market may be tomorrow’s market for a long time to come. Bottom line, nobody really knows!!
For eight months, folks, we have spit-shined our house, arranged every pillow, worked the yard, and proudly invited realtors to show the property--an exceptional San Diego house with an unmatched bay/city view. We have learned to "do the drill” in as little as 15 minutes. We have evicted ourselves every week for hours so that we could show our beautiful home in its “Sunday best” at the convenience and in the privacy of more than 125 "qualified" buyers.
We have finally moved OUT of our house in exasperation without selling it. Despite our normally joyful personalities, we were losing our sanity! As recently as two days ago, after again reviewing those horrible California “disclosure” forms, I found myself screaming as I windexed ceramic entry tiles on my hands and knees (because our cleaning tools had already been packed). I suddenly could not recognize myself. We left the following morning and are only now seeing the fog lift.
Our advice to those who can find the way:
Dream the dream NOW. Leave NOW. If you can't buy, then RENT, even if it's a one-room shack on a hillside--while you leave your house in the hands of a professional realtor and divorce yourself mentally and emotionally from the whole trauma.
Or take it off the market for whatever number of years it will take for this market to “correct.”
Either way, save your sanity!
We only wish we had left our “FOR SALE” sooner!
With warm wishes,
Jan
Hi, everyone,
We’ve been thinking a lot about those of you who are now—or will be soon—trying to sell your house and move forward with your lives. We want to offer our perspective to those who may benefit from our recent experience and insight.
In January 2007, we listed our house for sale for the first time in 37 years. The real estate market in San Diego had skyrocketed during that time (we laughingly called ourselves "poor folk living in a rich house"). We still remembered twenty-cent bread and five-thousand-dollar houses. We paid more for our 2005 car than we did for our 1969 home.
Understand, however, that what you may see as our huge real estate profit is only on paper, only potential. We are still "poor folk," meaning that we still live comfortably but not extravagantly on our retirement income, and we have no guarantee that anything will change. To be honest, once it's all sorted out, we do not expect much of anything to change--ever!
Imagine, then, if you will, our feelings last winter when we realized how much we might be expected to pay to buying and selling realtors, at the traditional combined 6%, for the seemingly simple transaction of selling our house. [Pause here for reality check and smelling salts.]
Our reactions ranged from incredulousness to downright anger. We had never paid that kind of money for anything--home, car, anything--in our lives! Surely these realtor fees were the world's biggest ripoff. Never mind that there would also be Capital Gains taxes, while the State of California (believe it or not) would also tax our Capital Gains as personal income!
Bottom line: We felt totally abused. (On certain levels, we still do.)
That was last January. We managed at that time to negotiate realtor fees to "just" 4.5%. We still gasped and reeled, but tried to consider and honestly understand the current difficult market. Surely we did not want to sell our house ourselves in this market!
Fast forward eight months--eight long months during which our realtor/friend/neighbor has planned the work and worked the plan, has spent the advertising money and smiled the smiles--and still is doing all that, in fact, despite her own raw emotions. She has been the only reason we are still sane. Yet she has received only one offer on our house after all that time and all that money, energy, effort, and caring!--and that one offer was from an investor hoping to "steal" the place.
I won't detail realtors' costs to do business, but I have seen them outlined and they are substantial. Their commissions are not their net profit, by a lot!! We have been embarrassed, in fact, to think about the hourly wage our realtor has potentially made this year. Her potential income is like our potential profit. And in this market, neither picture is pretty! We do not envy her! In fact, we feel sorry for her!!
Our house is now listed for only three-fourths of the original listing price, yet we have chosen to raise realtors' commissions to a total of 6%. (We would raise them higher yet if we thought it would do any good.)
Our point: If you want to sell a house in this market, our advice is to hire the best realtor you can find. Don't even think about selling it yourself on a couple of websites. You're only wasting dream time. Bottom line, you'll be lucky if you sell your house even using the big guns, in today’s market. And, whether we like it or not, today’s market may be tomorrow’s market for a long time to come. Bottom line, nobody really knows!!
For eight months, folks, we have spit-shined our house, arranged every pillow, worked the yard, and proudly invited realtors to show the property--an exceptional San Diego house with an unmatched bay/city view. We have learned to "do the drill” in as little as 15 minutes. We have evicted ourselves every week for hours so that we could show our beautiful home at its “Sunday best” at the convenience and in the privacy of more than 125 "qualified" buyers.
We have finally moved OUT of our house in exasperation without selling it. Despite our normally joyful personalities, we were finally losing our sanity! As recently as two days ago, after again reviewing those horrible California “disclosure” forms, I found myself screaming as I windexed ceramic entry tiles on my hands and knees (because our cleaning tools had already been packed). I suddenly could not recognize myself. We left the following morning and are only now seeing the fog lift.
Our advice to those who can find the way:
Dream the dream NOW. Leave NOW. If you can't buy, then RENT, even if it's a one-room shack on a hillside--while you leave your house in the hands of a professional realtor and divorce yourself mentally and emotionally from the whole trauma.
Or take it off the market for whatever number of years it will take for this market to “correct.”
Either way, save your sanity!
We only wish we had left our “FOR SALE” sooner!
With warmest wishes,
Jan
Last edited by SunnyKayak; 10-02-2007 at 07:47 PM..
We’ve been thinking a lot about those of you who are now—or will be soon—trying to sell your house and move forward with your lives. We want to offer our perspective to those who may benefit from our recent experience and insight.
In January 2007, we listed our house for sale for the first time in 37 years. The real estate market in San Diego had skyrocketed during that time (we laughingly called ourselves "poor folk living in a rich house"). We still remembered twenty-cent bread and five-thousand-dollar houses. We paid more for our 2005 car than we did for our 1969 home.
Understand, however, that what you may see as our huge real estate profit is only on paper, only potential. We are still "poor folk," meaning that we still live comfortably but not extravagantly on our retirement income, and we have no guarantee that anything will change. To be honest, once it's all sorted out, we do not expect much of anything to change--ever!
Imagine, then, if you will, our feelings last winter when we realized how much we might be expected to pay to buying and selling realtors, at the traditional combined 6%, for the seemingly simple transaction of selling our house. [Pause here for reality check and smelling salts.]
Our reactions ranged from incredulousness to downright anger. We had never paid that kind of money for anything--home, car, anything--in our lives! Surely these realtor fees were the world's biggest ripoff. Never mind that there would also be Capital Gains taxes, while the State of California (believe it or not) would also tax our Capital Gains as personal income!
Bottom line: We felt totally abused. (On certain levels, we still do.)
That was last January. We managed at that time to negotiate realtor fees to "just" 4.5%. We still gasped and reeled, but tried to consider and honestly understand the current difficult market. Surely we did not want to sell our house ourselves in this market!
Fast forward eight months--eight long months during which our realtor/friend/neighbor has planned the work and worked the plan, has spent the advertising money and smiled the smiles--and still is doing all that, in fact, despite her own raw emotions. She has been the only reason we are still sane. Yet she has received only one offer on our house after all that time and all that money, energy, effort, and caring!--and that one offer was from an investor hoping to "steal" the place.
I won't detail realtors' costs to do business, but I have seen them outlined and they are substantial. Their commissions are not their net profit, by a lot!! We have been embarrassed, in fact, to think about the hourly wage our realtor has potentially made this year. Her potential income is like our potential profit. And in this market, neither picture is pretty! We do not envy her! In fact, we feel sorry for her!!
Our house is now listed for only three-fourths of the original listing price, yet we have chosen to raise realtors' commissions to a total of 6%. (We would raise them higher yet if we thought it would do any good.)
Our point: If you want to sell a house in this market, our advice is to hire the best realtor you can find. Don't even think about selling it yourself on a couple of websites. You're only wasting dream time. Bottom line, you'll be lucky if you sell your house even using the big guns, in today’s market. And, whether we like it or not, today’s market may be tomorrow’s market for a long time to come. Bottom line, nobody really knows!!
For eight months, folks, we have spit-shined our house, arranged every pillow, worked the yard, and proudly invited realtors to show the property--an exceptional San Diego house with an unmatched bay/city view. We have learned to "do the drill” in as little as 15 minutes. We have evicted ourselves every week for hours so that we could show our beautiful home in its “Sunday best” at the convenience and in the privacy of more than 125 "qualified" buyers.
We have finally moved OUT of our house in exasperation without selling it. Despite our normally joyful personalities, we were losing our sanity! As recently as two days ago, after again reviewing those horrible California “disclosure” forms, I found myself screaming as I windexed ceramic entry tiles on my hands and knees (because our cleaning tools had already been packed). I suddenly could not recognize myself. We left the following morning and are only now seeing the fog lift.
Our advice to those who can find the way:
Dream the dream NOW. Leave NOW. If you can't buy, then RENT, even if it's a one-room shack on a hillside--while you leave your house in the hands of a professional realtor and divorce yourself mentally and emotionally from the whole trauma.
Or take it off the market for whatever number of years it will take for this market to “correct.”
Either way, save your sanity!
We only wish we had left our “FOR SALE” sooner!
With warm wishes,
Jan
Hey Jan - what a great post! I am glad you educated folks about the realtors, and how their net earnings are nowhere near the seemingly "huge commissions" we pay. I am not a realtor, although several decades ago I was one briefly. I always hire a good realtor, especially in a market like today's.
We just put our house on the market, we are living elsewhere in Fla. (and have our Asheville house already). My hubby has years to go to retire, so we had to make our Florida living better, we had an uncomfortable situation where we were living, and knew we couldn't go 10 more years like that.
Anyway, I hired my excellent realtor who did a GREAT job for me selling our last house, and she immediately took great pictures, got the sign up, made an excellent "virtual tour" , brochures, and all kinds of other good stuff. People think that it's as simple as finding a buyer and writing a contract, but there is a lot to it after thaqt - a good realtor will make sure your interests are protected, and will follow up the process every step of the way. They really do earn their $$$$.
Congratulations on taking that forward step so you can move on with your lives! I wish you much luck in your SD house sale, hopefully the market will change soon.
Great post. My thoughts exactly. My house has been on the market for over a year. There is a buyer that wants it, but can't buy it until he sells his property. I have a moving container being delivered tomorrow. It will go to Asheville in storage for a few weeks. By the end of this month the house will be winterized and empty and I'll be in Asheville in a rental. What I spend on rent will be offset by what I am not spending on electricity, heat, telephone and directv. These expenses are covered in my rent. (not the phone, but I only need a cell phone now.) All of my other expenses will be the same no matter where I live. I am readly to get on with my life. It was good to hear someone else thinking the same way. I have a good realtor. It will sell when the right buyer comes along.
Point-Counterpoint (remember than on 60 minutes back about 30 years ago?)
Jan makes an excellent point and certainly the fees realtors charge do NOT all go into their pockets! However... (and there is always a however)...
If a Realtor works months, their fees are fair or even (gasp!) low for the work they may do. Ads, listings, showings, etc. This is IF you get a good Realtor.
But if your house sells fast, they don't adjust the fees down. They pocket the profit and smile. Nothing wrong with that - if the house sells fast EVERYONE should be happy.
There are so many factors that come into play here. Million dollar plus homes were totally stagnant for a while because of the loan problems at Banks. NO ONE was offering Jumbo loans (over $420,000) and so, if people couldn't get a loan, they wouldn't buy! They killed the market pretty fast.
But now the Fed stepped in and Jumbos are back. Things will slowly come back.
In real estate, the biggest factors are location, condition, location, price, location, availability, and location. If you have those, selling is easier.
We have met with three different realtors as we shop for the best. The truth is, every one of them wants to low-ball our house to sell it faster. Less work for them, quicker (and bigger) profit, and so on. The realtor works for PROFIT, not for YOU. You are simply a means to the end for them. Sounds cynical, but think about it! If all they did was work for you, they would not charge as much and they would drop from exhaustion (as in Jan's example above).
You can figure out your own price pretty easily now-a-days. It used to be that only realtors had that inside track to what your home is worth. But with some homework, you can figure it out yourself today. Go to Zillow - Real Estate Valuations, Homes for Sale, Free Real Estate Information and enter your home address. Then look for comparable homes in your area and what they have sold for - not what they are asking, but the ones that actually SOLD. That will tell you what yours is worth.
We had one realtor tell us to sell at $420,000. That is LESS than the tax assessment on our house! It would sell in less than a week at that price, even in this market. Another realtor told us $450,000. Again, the numbers didn't add up.
I ran my own comps and came up with a LOW of $440,000 and a HIGH of $800,000!!! Now, I know that neither the high nor low should be considered, so I tossed them out and did some averaging. And it is clear that $480,000 to $530,000 is VERY reasonable. And so we have listed it as such on Zillow and Craig's List. We will also put up a "For Sale by Owner" (FSBO) sign the first of November after the winter grass is green and we have a yard sale.
Will it sell that way? Maybe, maybe not. But I will NOT give 6% to a realtor who low-balls our house value. I would rather wait it out.
We have an awesome location. We have the best schools in the state. We have terrific access to everything from freeways to airports, yet in a very quiet place. We have a large lot, a custom home, but the smallest home in a multi-million dollar neighborhood. We have had numerous people in "the business" tell us that our house will sell and probably quickly for full price. So why would we take a realtor who low-balls the price and pockets six percent? To save some grief it takes longer? No thanks.
I have sympathy for those who go months and have trouble selling like the Parkies. I hope we don't encounter that. I believe we will NOT encounter that.
So the lesson (I think) is this: if you have an experience more like Jan and Bill's, then by all means use a realtor and heed their advice!
If you have a situation more like ours (lots of time, no rush, need to avoid high fees, great location, etc.), then go ahead and try other methods. If the stress gets to you, go Jan's way - FAST! If it doesn't bother you, stay the path that makes the most sense.
Do the web sites work? Well, today is October 2nd and I already have had 18 views of our house for sale posting on Zillow this month. We had over 200 views last month. People are looking. It only takes ONE good offer to make a sale.
I'll let you know if it works or whether we go the realtor route. I do know this - we are on a VERY limited income and need every penny of equity to buy a retirement home. We cannot afford a rental AND a mortgage payment. That is not an option for us - only for people who don't have a mortgage.
So here you have two experiences. It should tell you that everyone is different and so is every experience. We hope for only the BEST for you and your dreams.
You shouldn't be using your tax assessment to determine home value. In fact, in today's market tax assessments are generally higher than what the house could actually sell for, especially in large markets. The market is declining, but counties are wary of decreasing tax assessments, because it means lower property taxes. I'm not a realtor, by the way, just follow this stuff pretty closely. Having a realtor tell you that you should price your home below the tax assessment shouldn't be a red flag.
You shouldn't be using your tax assessment to determine home value. In fact, in today's market tax assessments are generally higher than what the house could actually sell for, especially in large markets. The market is declining, but counties are wary of decreasing tax assessments, because it means lower property taxes. I'm not a realtor, by the way, just follow this stuff pretty closely. Having a realtor tell you that you should price your home below the tax assessment shouldn't be a red flag.
Bingo! Thanks for saying this, you are 100% correct Being priced below tax assessment is not a bad thing.
Also, unfortunately, Zillow is considered an inaccurate way to assess current value in over half the homes it reports on.
In reality, a home (or anything of value for that matter) is only worth what someone will actually pay you for it. I sincerely hope someone sees the value you see in your home Father John and pays you that amount. Keep us posted!
Last edited by lovesMountains; 10-02-2007 at 10:38 AM..
You shouldn't be using your tax assessment to determine home value. In fact, in today's market tax assessments are generally higher than what the house could actually sell for, especially in large markets. The market is declining, but counties are wary of decreasing tax assessments, because it means lower property taxes. I'm not a realtor, by the way, just follow this stuff pretty closely. Having a realtor tell you that you should price your home below the tax assessment shouldn't be a red flag.
Not true.
Your taxes are not based on the assessed value as much as you might think. They are based on the approved percentages as applied to that assessed value. Say your property value assessment DOUBLES. Your taxes WILL NOT double. Guaranteed. They might go up a little, but they will not double because the RATES will decline substantially.
That said, states and counties assess home values at 80 to 90% of "real" value because they know they will get complaints if they over estimate a value. In Arizona, for example, (and true elsewhere as well), if your home is valued too high, you can file a grievance. Such a filing must be addressed in 90 days BY LAW. If property values were set too high, there would be so many grievances that the state would lose millions of dollars just dealing with the paperwork.
If a realtor offers you less than tax assessment, it means he is looking for a quick cheap sale and has not done his homework. The only other possibility would be if your property has fallen more than 10-20% in a few months. And that isn't true anywhere in the country yet. (6-7% in some areas has occurred.)
Bingo! Thanks for saying this, you are 100% correct Being priced below tax assessment is not a bad thing.
Also, unfortunately, Zillow is considered an inaccurate way to assess current value in over half the homes it reports on.
In reality, a home (or anything of value for that matter) is only worth what someone will actually pay you for it. I sincerely hope someone sees the value you see in your home Father John and pays you that amount. Keep us posted!
Wrong on two things, right on one. See my above post about assessed values.
2) Zillow is 100% ACCURATE on the price that a home SOLD for - that is pulled from public records. What I said in my post is that you can do comps from Zillow on what has SOLD in your area - NOT asking prices or Z-estimates. But look at selling prices for homes that had Z-estimates and you will find they are VERY accurate there, too. It is realtors who hate Zillow who tell you they are inaccurate. They might be, but they might not. Do your own homework (it is FREE to do your own).
3) This that you said is 100% TRUE: In reality, a home (or anything of value for that matter) is only worth what someone will actually pay you for it. Yes! But if you don't ASK, you will never RECEIVE. Ask too little and you will sell fast. Ask too much and you may never sell. Do your homework (or pay a realtor to do it for you) and you very well may get a fair price.
I am doing (and have done) my homework. I believe my price is fair, but unless a buyer does, too, it won't sell.
Jan:
I lived in San Diego for 26yrs and moved in 1998. I sold my parents home in a down market because they were too old to maintain it. Afterward, I ended up in FL due to the fact that my mom moved here after my dad's death. Now, I'm stuck with a manufactured home on rented land that I cannot sell. I hate FL with a passion, but I couldn't sell when I wanted to do so. I want to move to western NC; however, the prices have gone up. As a result, I have been stuck twice-- once in CA and now in this perpetual swamp of FL. I know how you feel. I just want the **** out of FL. I truly hope that things will improve for you. I warned my friend not to buy in the up market in SD three years ago. He is thanking me now!!!!!!!
Here in a suburb of Houston where I live (Clear Lake/Johnson Space Center/Nasa), our home values are much more than the tax assessment. For example, my real estate taxes on my home are $8,000 per year based on an assessment of $240,000, but my home is valued at around $300,000+, based on what homes in my neighborhood just sold for, with the highest just selling for $375,000 and the lowest for $300,000. My homeowner's insurance is another $2,700 per year, so my taxes and insurance are $10,700 per year on a tax assessment of $240,000! I am looking at homes in Blowing Rock, NC and the tax on a home assessed at $240,000 would be around $600 per year! What a difference! However, $240,000 doesn't buy much in Blowing Rock, but I could get a more expensive home there and still end up paying close to the same monthly mortgage payment just because of the taxes. I guess in some places of the country, the tax assessed value is higher than the market value, but here in Houston, the market value is definitely higher than the tax assessed value, may be because our tax rate is so high!
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Being priced below tax assessment is not a bad thing.
Market value and tax assessment value
