Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Another Pricing Nightmare to Buyers' Benefit

Another Pricing Nightmare to Buyers' Benefit

I blogged earlier about buyers looking at a house many times before submitting an offer, and I wanted to go into further detail about the listing situation of that same house.

Some "friends" of mine put their house on the market about 8-9 months ago.  We talked about the house, the work needed, the updates needed, and of course, the price.

Updates and price were way out in opposite left fields. 

They put in some brand new, nice hardwood floors and kitchen counters.  However, that was it. They didn't and wouldn't change the appliances and they were original from the 70's.  They also didn't update any of the hardware like door knobs or cabinet pulls.  The house was very "dated" and brown!

Before they did the floor and counters, I had suggested selling it "as is" so the buyers could come in and update things themselves, but that it would not be the best idea to update one or two things in this price range when the entire house needs updating, especially with the leopard print counters they chose.

They decided not to listen and do the two updates.

Then, it was time to put the house on the market. I didn't list it. Price was too high. I referred them to someone else who might work with them.  He didn't work with them either.

My "friends" chose a new agent to list their home.  Why?  "With him being a new agent, he needs the money more than the other guy, so we think he'll do more to sell our home quickly!"

HUH?

First, they want to over price by about $100k. Second, they want to use a new agent who has no idea how to market their home in order to get anywhere near their over priced amount?

An appraisal said they could get around $550k. So instead of pricing it near that, they priced it at $650k in order to have negotiating room.  Then, price reduction to $585k.  Then reduction to $550k.  Then, a certain brokerage who had this listing, did a "silly" nationwide price reduction on all their listings and this was reduced to $470k. 

Now, it was on the market for over 6 months.  Even though it's now priced well below the appraised value and below the tax assessed value by thousands, it's still sitting there because now it looks bad with an original asking price so high.

After another couple of months at $470k, priced aggressively, they get an offer at $430k.  Thinking it would be easy to negotiate them up because the buyers have to know how low the house is already priced, they counter. This goes back and forth 6 times!

Final agreed upon price is $440k.  Why?  Because the sellers showed they were desperate to dump the property after so many months and so many price adjustments starting out way above any realistic number imaginable.  They might as well have just gift-wrapped the house and given it away over the Holidays!

Sellers, look at why you're selling.  Is it to just get the highest possible price you can no matter how long it takes though your net number continues to decrease each day, week, and month you're on the market?  Or, is your goal to knock out the waiting period, and get to your net number as quickly as possible?

REALTORS® are interviewing you more than you're interviewing us.  We don't want to spend our time and energy marketing a home that isn't going to sell as quickly as possible. Think about that before your next REALTOR® interview.

Comment balloon 13 commentsDonna Harris • January 26 2009 11:10AM

Comments

Donna, this story is just sad.  People just shoot themselves in the foot and it must be hard to watch for an agent.  I can tell you, as a stager, on the periphery looking in... it is really hard to watch.  I hate it when I have a client like the ones you describe, and I, of course, have no recourse but to just watch and keep my mouth shut, as it isn't my job.  The worst thing as a stager is it makes me look bad when a house doesn't sell but nothing is going to sell a house that is way over priced - nothing...  As an agent it seems you were wise to walk away, I wonder if they learned a lesson for the next home they sell...

Posted by Joanne O'Donnell (Chic Home Interiors) almost 10 years ago

Joanne, I understand completely. I'm an ASP so I help the home owners stage their home to the best that they allow me to, and they think it's the magic answer.  However, price is still the magic answer and grossly over pricing to begin with before coming down, usually means a selling price lower than what "could have  been."

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 10 years ago

Donna, this is such the classic story of doing everything wrong step by step. Why they don't listen to you up front is beyond me.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 10 years ago

Well, they don't sound like 'friends'. Either that or they don't valuing your opinion.  Sounds like a whole lot of wasted time, as you have pointed out.  If they had listed it for less, would you have listed it yourself or did you choose not to because they are your friends?  I know people don't like to mix the two so I was just curious.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) almost 10 years ago

Gary, Because what do I know? I've only been in this business 9 years. It's not like I'm a hungry new agent yearning for my first closing!  LOL

John, Let's just say, one of them had his/her real estate license for a split second in the '70s and thought he/she knew better.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 10 years ago

LOL in the 70s.  I laughed pretty good there, thanks.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) almost 10 years ago

this is a really good post, times have most certainly changed , though too many sellers think it is still a magic trick to sell a home

Posted by James Wexler (wexzilla.com) almost 10 years ago

John, It's even more sad that I'm not kidding!!  And even more sad than that, I'm not exaggerating about how long the license was held, about a year.

James, Abrakadabra!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 10 years ago

Educating sellers (and buyers) is an increasingly important part of the job.  It is tough if they watch to much HGTV!

Posted by Michael Lee (Frog Realty) almost 10 years ago

This advice is so true and I wish more and more sellers would realize that if they overprice, they won't be doing themselves any good. I actually offered one seller that I would pay for an appraisal and if I was wrong, I would pay for it, if the appraiser agreed with my price they would pay for it and list it at my price.

They ended up in the same situation your non-sellers did.

Todd Clark, Helping Families Home - www.IFoundYourNewHome.com

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) almost 10 years ago

Michael, Educating them is not really the issue here.  It's getting them to not just listen but to HEAR what is being said, or all the education just falls on deaf ears like it did.

Todd, I'm sure they thought you and the appraiser would be working together to get them the lowest possible price, right?

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 10 years ago

Great Point!  Sellers need to listen.  Why is it they will not listen to us or do what we advise; but if were their Doctor or Accountant - they would do it!

Posted by James Downing - Metro DC Houses Team REALTORSĀ®, CRS, GRI, ABR,MRP, MilRes, When Looking to Buy or Sell - Make the Right Move (Real Living | At Home) almost 10 years ago

With this scenario repeating itself over and over, you'd think that everyone would know better by now.

Posted by Retired Notworking almost 10 years ago

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