Profile picture for ph73
  • ph73
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Without dropping price more, how do I compete with cheap new house prices and foreclosures?

It seems the market drops $500 a week in price on homes.  Loans being hard to come by and foreclosure prices low, lower my home price seems the only thing to attract buyers to make it marketable.  I feel I'm to the point of giving a "well stick built" designed home away. I've dropped price $47,000 already but new "cheap subdivisions" are selling for same price.  How do I compete without lowering my price anymore?
  • February 13 2009 - Fox Lake
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Answers (7)

Profile picture for Rob Rathbun
Ph,Great question and it's what most sellers are asking right now.  My first question back is what's your pricepoint? If you've already dropped $47k on a $200,000 home, that's a pretty big bite, but if it's a $500,000 home, it's just a drop in the bucket right now.

You are experiencing what is always the problem with buying a new build and then selling in the midtst of other new builds...the builder has deeper pockets than you do and they will undoubtedly beat you on price and incentive every time.  Not sure where you are, but here in the Denver area, I see builders advertising homes at the "base price" to get buyers in, then they ask if the buyer wants a front door, carpet, and siding and the price jumps by as much as 25%...it's a great way to pad your own pockets, but as a re-sale, you can't beat it.

First thing you should do is either get a different agent that will actually do something for their commission, or contact the agent's managing broker and discuss your frustration.  If the agent isn't marketing the home with pictures, you're missing out on buyers right now.

Second thing is to possibly advertise an incentive to buyers.  Lower interest rate, buyer's closing costs, upgrades, etc. that can be put into the closing, so you don't have to pay for them up front, but when the house sells.

Other than getting more exposure or adding incentives, you're SOL when it comes to the price...it's the same as a new car going down in price after you buy it, there's nothing you can do but sell it a little low, but then take advantage when you're buying in this market.

Good luck!
Rob Rathbun
www.robshomesonline.com
  • April 01 2009
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Profile picture for ph73
  • ph73
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Yes, I have a realator.  It seems he even wants me to drop my price another $15,000 to be competative.  Homes in my price range now have the same # bedrms, baths, home age, size, etc.  He's just looking at the bottom-line price.  Only one was lower than mine in comparison.  Realator feels lower price even more, that's why people aren't looking.  He still doesn't even have pictures of rooms for people to see wood floors, beautiful fireplace, decking, pool, fenced yard, etc.  I feel he's wrong to lower it so much to attract people as with 5% to realator (for doing nothing so far) and the extra 10,000 you'll drop to counteroffer their lower bid, my house price is below the expense when built and property.
  • April 01 2009
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How do you compete without lowering your price? you don't.

any other questions?

to the realtors suggesting staging, warm fuzzy pictures, etc. you guys/gals did read the part about competing with new cheap subdivisions? Builders who have great staged homes, and a never lived in home??? Just saying, given the choice who isn't going to take a new build, with incentives and a long warranty over one with semi used carpet etc?

  • March 31 2009
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When choosing a Realtor ask if they do visual tours and ask to see examples.  The quality of these can vary.  When marketing, focus on the internet, visual tours and many, many color photos and emphasis on quality construction and well maintained move in ready.  Homes with multiple photos and visual tours are viewed a great deal more than homes on the internet with no or few photos.  Ask your Realtor to stage your home and make those photos Warm and Welcoming.
To sell you have to get people inside the home and calling your agent about it.  Good Luck!!
  • March 31 2009
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That's a tough one.
Do you have to sell right now?
I agree about working with a realtor, you need to be in the mls right now. First time homebuyers generally work with realtors and with the stimulus package aimed largely at them, that is who is out there.
Another reason people look at new homes are incentives like appliances and flooring allowances.  Look and see what all is being offered there as well.
Good luck!
  • March 31 2009
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One advantage to your home versus a foreclosure is that your home is probably in fantastic showing condition.  For buyers looking for something move-in ready, they are more likely to go with a home that's not in foreclosure.  Make sure your home is in showing condition at all times.  Never turn away a showing - those could be the buyers for your home. 

Noah Seidenberg
http://www.noahseidenberg.com

  • February 13 2009
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My first question to you is, Do you have your home listed with a Realtor?  If you are trying to compete as a FSBO in this market, you've shot yourself in the foot to start.  The Buyers that are out there are working with Realtors, and the Realtors are going to show them everything listed, that they are guaranteed to be paid on, before they even consider showing a FSBO.

Secondly, how is the house priced in comparison to the neighborhood that it is in?  Are there brand new homes in your neighborhood that your house is in direct competition with?

New homes are not always most attractive to all buyers.  I have had many buyers that really do not want to be the first person in a house.  They like well-established neighborhoods, and a house that has been through all the settling and issues. 

The best thing that an owner of a less-than-new home can do to make their home more appealing is to make sure that all defects are eliminated, the house is in pristine condition, and is clean, repainted, and ready to move in to.  There are more factors than just the price.  Make your home stand out, and show buyers the value that your home offers.


See more tips for sellers at http://www.prchomes.com/seller.html
  • February 13 2009
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