Pricing to Sell

Following is a copy of an email I sent to a homeowner that contacted me to discuss selling his property that has been on the market for 550 days.  He thinks the reason it hasn't sold is because the Realtors he's chosen to represent him are not accustomed to selling acreaged property...

 I enjoyed talking with you a bit this morning about your home for sale in (?    subdivision).  I would like to go into a little more detail regarding the fact  that  it’s  been on the market for over 550 days and you haven’t received a  single  offer.

  You have a number of issues that need to be dealt with in order to get it  sold.  I  have been in this business long enough to see and experience first hand what  happens to a property that is over priced.  The perceived value  the homeowner has  does not align with the perceived value a homebuyer  has.   The home will languish  on the market with no offers because the  homeowner thinks that someone will come along and see the same perceived value that the homeowner does.  The homeowner mistakenly thinks that someone will surely know they can offer far less than list price.  The homebuyer doesn’t see it this way.  He sees an over priced home with a homeowner that is clearly not motivated to sell and will probably be difficult to work with.  

 In your case, it looks like you’re agreeable that there is about $60,000 in updates needed and you think the details can be worked out in the contract…  That just isn’t going to happen.   There are far too many other properties to choose from that are easier to make a deal on, more reasonably priced, better maintained, and up to date.  

 Our current Houston market is a buyer’s market.  Homes in the $500,000 range and up have seen a significant decline in sales. Homebuyers have an amazing amount of information at their fingertips and have a pretty good idea of what a property should be listed for.   If the home is priced to reflect the needed updates then the home will be shown if properly marketed.  If it’s overpriced given the updates needed, you won’t get the showings no matter what the Realtor does.

 You have a nice home with good bones but here are the issues I see with your current listing:

• It’s overpriced.  I talked with the agent that had it listed for $500,000 and she has the signed listing agreement showing that you agreed to list at that price.  There were no misunderstandings.
• The current pictures are subpar.  The front exterior picture looks out of focus and there’s nothing appealing about it.
• The shrubs are all overgrown, giving the feel of an abandoned home.  This gives the perspective buyer the impression that the property has not been well maintained.  Appearances are everything.
• The “barn” or “stall” picture shows overgrown grass and looks like it hasn’t been used for 10+years.
• Although it’s on 5 acres, your current agent hasn’t taken the time to appropriately fill out the MLS sheet so people looking for a 5 acre horse property probably can’t find it easily.
• The Kitchen appliances need to be updated.
• The green cultured marble in the Master Bath needs to be replaced with granite and tile.
• The green and blue carpet throughout the home should be replaced.
• The counter tops in the secondary bedrooms need to be replaced.
• The entire home needs to be repainted.  
• A sidewalk is needed from the driveway to the front door.  Most people have visitors that would want to walk to the front door from the driveway and they don’t want to have to walk through the grass & dirt to get there.  
• Apart from the needed updates, the home is also zoned to some of the worst schools in the district.
• There just isn’t anything in the listing that will encourage people to come and look at it or make them want to buy it.

A home should not take 550 days to sell.  Clearly something needs to change if you are going to sell it.  I understand your position that you feel you cannot afford to reduce the price where it should be AND pay Realtor fees but, what choice do you really have? You mentioned that selling the home is the last thing you have to do before moving back home.  How much time are you going to put into that?  The longer it sits on the market, the lower the perceived value.  I’ve yet to see a buyer want to purchase a overpriced property that has been on the market for such a long time - especially given the amount of work that needs to be done.  Those buyers simply do not exist.   

The fault is not necessarily with the Realtors you’ve chosen but a combination of both the lack of creativity on the agent’s part as well as the fact that it’s overpriced.  If I were going to sell the home for you, I would do the following:

• List Price - $499,000.
• Invest $1200 in top of the line photographs, including aerial, virtual staging, and tour - my cost, not yours.
• Put together a suggested finish selection and pricing for the updates because many homebuyers and Realtors cannot or do not know how to do this and prospective buyers need to see a plan of “what can be”.
• Market to local Realtors as well as Realtors in select cities that may have clients moving to this area.
• Smart Advertising 
• I would also suggest getting an appraisal.  

 I thank you for your time and hope my suggestions will not be found offensive but give you something to consider.