Zillow Advice: Pricing - Are homeowners unrealistic about their selling price?

OVERIMPROVED HOMES, SUPERADEQUACIES ...

Mon, 15 Dec 2008 19:30:00 GMT

OVERIMPROVED HOMES, SUPERADEQUACIES OR WHATEVER NAME YOU WANT TO GIVE THEM WILL SELDOM, IF EVER, RECOUP THEIR COST OF RENOVATION. AS AN APPRAISER I CONSTANTLY HAVE TO EXPLAIN TO PEOPLE WHY A 2,000 SQUARE FOOT HOME IN A NEIGHBORHOOD FULL OF 800-1,000 SQUARE FOOT HOMES ISN'T WORTH TWICE AS MUCH AS THE SMALLER HOMES. THE SIMPLE PREMISE THAT ADDITIONAL EXPENDITURES BEYOND A CERTAIN POINT WILL NOT YIELD A RETURN COMMENSURATE WITH THE ADDITIONAL EXPENDITURE APPEARS TO BE A CONCEPT THAT THEY DO NOT WISH TO GRASP. THESE CLIENTS ARE OFTEN LEFT WONDERING WHY THEIR APPRAISALS DON'T COME IN AS HIGH AS THEY WOULD LIKE. THEY ARE APPRAISAL NIGHTMARES BECAUSE OF THE LACK OF COMPARABLE SALES. DON'T OVER IMPROVE-MOVE!

We have found there is strong ...

Sat, 29 Nov 2008 04:27:00 GMT

We have found there is strong resistance by many sellers to put their homes at a price that is fair market value. The line we hear often is, "I want my price," and they are adament about price even after showing them Bloomberg, Wall Street Journal and Realty Trac articles documenting declines in home values in their area. At a certain point you have to walk away if the home will be impossible to market. Another issue: When homes have been overly customized or overimproved sellers want to recover their costs for renovating. So, they say can't go below a certain price point or they'll sell at a loss. Yet, these overimproved homes are the very listings that tend to sit and expire after being on the market for many months with no activity. Meanwhile, in this economy it is difficult to find enough strong buyers to qualify and get the financing. It's definitely a problem.

Survey says: 74% is huge, ...

Thu, 13 Nov 2008 14:33:00 GMT

Survey says: 74% is huge, thats a lot of people I would think.

Today, sellers do know that ...

Tue, 11 Nov 2008 03:07:00 GMT

Today, sellers do know that the market is tough, but they do not want to accept it. Upfront, the seller's main line is "I do not want to leave money on the table" or "I do not want to give my house away". As the seller sits and waits for a buyer, money is evaporating. If the seller would price properly at the beginning, time on the market would shorten. The conditon of the house is so important, but sellers do not want to spend the money. In our market, we have so few buyers therefore sellers must make their home stand out in the overcrowded world of real estate with price and condition.

....I like it. I'm ...

Mon, 10 Nov 2008 21:25:00 GMT

....I like it. I'm beginning to take a similar approach. I lost the listing opportunity for my honesty and as I watch the market continue to decline in my area, my forecast is looking more and more accurate. Not sure the seller will come back around to me, but you never know.

All very interesting. ...

Thu, 06 Nov 2008 15:50:00 GMT

All very interesting. Thank you for your contributions.

In our view, what is the most important thing to keep in mind is, for whatever reason(s): "if they don't wanna, they aint' gonna".

To earn a living, and maintain your sanity, rather then becoming a potential lighting rod, and wasting your valuable time, and resources, we have found it is best to approach sellers this way.

Show them all the market data & facts in written form, have a full, honest discussion about their property (plusses & minuses), and tell them that you don't think you can help them if they don't agree with your analysis.

Your goals: to educate them, despite your less than welcomed news establish a rapport, and, introduce the idea that they will call you if someone else takes on the task, and fails because of their miscalculations and misunderstanding of the market.

"no my house is different ...

Tue, 04 Nov 2008 20:51:00 GMT

"no my house is different is has <insert some minor difference like a pool, patio, deck, or some minor locational upgrade>". If I had a dollar for every seller that told me something like this I wouldn't have to work again for the rest of my life. There was a great article in realtor magazine a while back and it said- and I'm paraphrasing- people tend to view their home as being worth the most it ever was worth. Simply put people can't seperate logic from emotion and don't want to live in a home they feel was a bad deal so they convince themselves that it's going up and ignore the wealth of data to the contrary.

I find making a simple spreadsheet helps. Showing a seller that the home he overpaid for 4 years ago would have had to go up 12% a year in the worst market in decades to be worth what he wants to sell for is a sure-fire way to put the data and facts of the discussion at the forefront and remove their ignorance and blind optimism.

Here in Houston, the market ...

Tue, 04 Nov 2008 01:48:00 GMT

Here in Houston, the market is pretty stable. Housing prices are holding their own, but it may take longer to actually sell a home, because there are less buyers. So it is not so much the sellling price that we have a problem with as realistic expectations for days on market.

It is very difficult to get ...

Mon, 03 Nov 2008 19:43:00 GMT

It is very difficult to get most homeowners to set a realistic Price. If they are not motivated to sell they think they know better then the Pro's. Unfortunately they need to sit on the market a while before relizing that what you said from the get go may be true and by that time they probably need to be even lower.

Hi Rick, I'm interested to ...

Sun, 02 Nov 2008 02:49:00 GMT

Hi Rick, I'm interested to hear you chime in. I visit LBI with some frequency and it seems as though homes are sitting and prices are not being adjusted to move them. Do you think that with the recent economic turn that this will change and your local market will begin to demonstrate the kind of negative turn we are feeling up north.