Sellers ... don't do this!!!

OK. This person bought the house for $345,000 in April '07. Prices have declined about 7% on average over the last year. S(he) wants $375,000. There are six other houses (zillow only shows three) for sale within a 500 foot radius, including a house right next door. There are 320 homes for sale in the zip, including FSBOs, along with 82 pending foreclosures. While this zip is certainly not the worst out there, those stats aren't exactly good, and the seller puts his/her head in the sand and lists high. I'm wondering if this seller won't end up posting a "Help, My House Isn't Getting Any Showings" thread somewhere. I'm certainly not going to look at it even though it fits my criteria in every other way besides a rational list price.



Here is what I am seeing from a buyers perspective. About 1 in 3 houses have this kind of crazy list price. They generally cluster into one of three groups: (1) FSBO aka as long as I'm going to keep the selling commission, I might as well start high on the sales price too. (2) Listing that have been on the market for over 180 days aka this is my price and I'm stick'n to it. (3) No (or maybe just one) sales in a neighborhood aka let's band together and keep prices high, never mind that buyers can just go 500 feet down the road and get something 50K cheaper.



All this, of course, is JMO, but I hope it helps somebody keep things in perspective.

What a house was bought for is completely irrelevant in determing a fair market value.  If you are not looking at it for that sole reason, then you are quite dumb.  It seems to me that you only want to buy a house if the seller is taking a massive loss, which is typical of the bottom feeders who post on Zillow. 

Hey there AlpineNJ. I know a troll when I see one and I won't give you the energy. Was it you who tried to insult azrob off the board, or was it another one of your screen names? In any case, you should pick this evenings fight with someone else.

Four Listing Appointments -- Where are They Now?

What do you think the listing price should be?

I am not a troll.  I had absolutely nothing to do with azrob's departure.  I have been on Zillow far longer than you have.  If you are looking for advice, you certainyl will not find it here with that attitude.

I have to agree w/ Alpine.  If they bought the house 20 yrs ago for $100,000 would you more or less upset?  If you didn't think the price is "fair", that's fine, but past sales price has no bearing on current market.  If houses are selling (comps) for their asking than they are not "overpriced".  Maybe do some more research on recent comparable sales, OR have your agent do one for you if you have one.  GL

Daniel, I saw your link- re-read the first sentence please :o)

Fourier, what about simply just making several offers around 90 cents on the dollar? Might that help? If not, try new construction but make sure the builder isn't producing a pile of you know what and calling it a house.

Indeed, combined with the last sentence in the first paragraph....and one I left out.....if you have a pension, you last too... :-)

Fourier--while I have to agree with you in theory, I'm seeing the same thing in the neighborhoods I'm interested in--houses are bought less than 6 months prior and then flipped for $100K over previous purchase price. If the house is turnkey and in a hot market, then it usually works.

There are lots of factors that go into a homeowner's decision on an asking price, and I would have to agree with the others that sold comps (within the past 30 days) is the best place to look and not Zillow. I'm sure that if the house truly is overpriced, the homeowners will soon be brought down to earth.

I would have to disagree with the dumb comment or bottom feeder comments just as much as I would disagree with the generalizations made on people who price their homes higher. I once used Zillow to try to guesstimate my home--it's now priced about $25k below that and below sold comps and still isn't selling.

Many of us on here were once just as naive, but we do the best we can with the information we have readily available to us.

Hope you find the home of your dreams. (Wanna buy mine? Just kidding. Sort of.) :-)

fourier... you don't comment on what these people have done since they bought the house. Did the remodel it to give it high end kitchens and bathrooms? Did the add on? Did the finish the basement? etc.

Also, they may have got an amazing deal when they bought the house. That can't be your only criteria for deciding what it's current worth is.

Sure the price the owner paid can be irrelevant, but when the owner purchased only a year ago it certainly becomes relevant.   

The house next door to me was listed in Jan for 6% more than they paid in April 2007 though prices have gone down on avg 10%, now they are listed for 3% more than they paid and prices have gone down even more since they listed in Jan.  When a seller is trying to get someone to catch their falling knife from them there is a problem, we have discussed this plenty in here, and until the seller sells according to comps/current prices then they can and should expect to sit on market for quite some time.   It isn't that a buyer wants the seller to take a loss, the buyer isn't willing to pay TOO MUCH for a house just because the owner needs to sell it for a certain price so they don't have to sell for a loss. The buyer is not there to bail out some seller.

And the house next door to me......they have done NADA to the house!!

OK, for those of you who suggested I just looked at the owner's purchase price alone, here are other data points:

* Asking price $375K

* Zillow Zestimate $336.5

* Price per sq ft. $145/sq. ft. - about the same as the zip BUT this house is larger and that should bring it down.

* Sold comps in the same hood - only one - almost a year old - the house was even larger and sold for $110 sq ft.

So, am I right about this house being over priced? Maybe. Maybe not. MY POINT is that I am never going to find out because I (and many other buyers) won't be going to visit the place or others like it ... there are just too many houses that, superficially at least, have a more realistic selling price. If this owner has made $50K worth of improvements, s(he) should have put that in the first sentence of the listing. Instead there is some &$@* about "large rooms".

I'm GUESSING that this owner and his neighbors have referenced each others listings and came to the conclusion that "they are fairly valued". They talk to each other and take solace that none of them is getting any showings right now. I think psychologists call this a mass delusion. If you actually NEED to sell, you are not doing yourself any favors by thinking this way.

Just My Two "Dumb" Cents

Maybe my Zillow is wacky, but I did not see that the home was for sale. I looked at the house, and it had a Zestimate, but that's all I could call up.

It seems to me, that if it is for sale with facts I've read here, that the owner is seeking to break even and get enough to pay realtor fees and closing costs.

You didn't answer Pinks question, what would you have the seller do?

If the seller has no money in the bank to put on the table for a short sale, then the only answer for the seller is to list it as a FSBO to break even, foreclose or stay put and not move. Instead of complaining about this house, why not look at the 82 foreclosures and 6 neighborhing homes thaqt  you seem to believe are not better than this one, and so are comparable to it, but lower priced.

I never quite understand why people look at "what the home sold you x amount of years ago". It doesn't matter what they paid for it x amount of years ago. What if they paid too much or negotiated a the amount lower. There are many reasons as to why that old price was what it was. What matters is "What it should be selling for today". Also Zillow is NOT that accurate & Zillow doesn't set the market, the market sets the market.

<< Instead of complaining about this house, why not look at the 82 foreclosures and 6 neighborhing homes thaqt you seem to believe are not better than this one, and so are comparable to it, but lower priced. >>

Lucy et al ... I have nothing to complain about. This is a buyer's market and I am a buyer (eventually). The point of my post is to help sellers better understand how buyers (or at least MANY buyers) right now are making decisions on what properties to look at. As far as what sellers trapped in an underwater house should do ... I am not the best person to answer that question. However, its hard for me to believe that EVERY seller with an irrationally high listing price is in this situation. My original posts outlines where I see this the most.

I realize that this is a sensitive topic for many sellers right now. To tell you the truth, I expected the responses here to be much more hostile than they have been. Anyway, I hope all this helped at least a few people.

Peace

P.S. If you have contacted me though zillow trying to sell your house, please understand that I cannot respond for privacy reasons. I have concentrated my search on a few zip codes and, at least for the time being, I am not interested in expanding my search area. Thanks.

Sellers do not need your advice fourier.  If you look at the selelr's forum, there are 3 threads started by selelrs who have just sold their houses, so they obvivously know what they are doing and don't require "advice" from some outsider.

Good day!

"Sellers do not need your advice fourier."  Who are you to judge?

Fourier,

I was never an underwater seller, but if I see that an owner bought within the past two years, then it is not worth offering the advice to say "don't do this" if the owner has no other choice except to break even or walk away. 

Now, if your example had been a home where a seller has plenty of room to budge from long ownership, but has refused to do so in face of all evidence and comps in this market , then I would be agreeing with you that this type of owner is a bonehead if selling the home is necessary.

In my opinion it does matter what someone paid for a house 5 years ago when they are asking 160k more than what they paid for it then. Especially in this terrible market. Who's going to pay those prices now?

asking and getting are two different things. If i wanted to ask $3 million for a 1/4 acre lot with no utilities in the middle of nowhere west texas that would be my decision as the seller. I do not recall a federal law that states a seller has to run his asking price before a panel of zillow addicted buyers with no money or credit  before they can place it on the market.

Always makes me wonder as to how anyone "flipped a house" when every buyer researches to see what the seller paid for it and wants to offer less than he paid.. never understood how that ever worked.

I do not recall a federal law that states a seller has to run his asking price before a panel of zillow addicted buyers with no money or credit  before they can place it on the market

No federal law, you're right. However, if sellers want to understand the buyers mindset they might want to consider what buyers are saying, including that many factor in prior sales price. As for buyers on Zillow having no money or credit, that's just stuipid and I take offense since my Fico score is around  820 and I have well, well over 6 figures for a down payment. That being said, I'm renting for now until prices come down to more reasonable levels.

Well, the first comp (5228 Kathleen Ct) is significantly smaller (1980 sqft versus 2580 sqft) and it sold for $315k.

If all other things are truly comparable, they are not completely off the mark with $375k. Maybe they expect to sell for $350k. Maybe when they bought for 345k, they needed to do repairs for $50k. Or they bought it from a family member at a low price. Or they had a FSBO thus the artificial low price.

Or they are desperate not to lose money. ($375k =~ 345k + 6% realtor cost + 2% other closing cost)

Lots of possibilities. Just the last sale price alone means NOTHING.

Extremem example: Had they paid $700k, would you buy it for $630k (10% lower) even though the neighbors closed for $3xxk?

-Peter

That being said, I'm renting for now until prices come down to more reasonable levels. Well then, keep renting your crapshack stupid. Sellers don't have to listen to your stupid crap.

I will keep renting my lovely 4000 S.F. home for $3300 a month, way less than a mortgage for it would ever be. Thanks for the advice. :o)

As for not listening to me... feel free to tune me out. It won't be hard since I barely ever post and I'm not the one telling sellers how to price their homes. I merely defended Fourier's position that prior sales prices matter to potential buyers (regardless of whether they should or not). I'm not sure why you're yelling as I've said nothing offensive but It's obvious you're angry about something. I wish you luck in your market endeavors.

Prior sales matter if the purchase was made fewer than five years ago and no signficant changes to the property had been made.

Prior sales do NOT matter if the purchase was made more than five years ago, significant changes were made to the property and the location became more desirable for reasons such as new schools, a restored historical area having been revived since the home was last purchased (that had been a factor for me - bought as a risk when revitalization started, sold after it had concluded 11 years later.) In those cases, the owner bought an entire different property than the one the owner is trying to sell.

Most sellers do not factor in the price they paid for their house when they sell and set an asking price, so if you are so concerned with what the seler paid, you will never buy a house.