I’ve been in lots of discussions with my clients, and pricing your home for sale can be very difficult. I wanted to tell you the story of what one of my real estate agent friends went through when putting his parents’ house for sale.
In The Beginning
In the busy selling season of 2017, the parents of my agent friend had decided that it was time to sell their home. They bought the home in the 1960’s and hadn’t updated the home since they’d moved in. I guess you could call the style mid-century modern. The kitchens and bathrooms and shag carpet were all from that style.
The parents lived in a very nice neighborhood, and they’d even remarked to others about how quickly homes always sold. As the best kind of nosy neighbors, they dutifully went to open houses in the neighborhood and saw what was selling. They were going to downsize; the house had just become too much work to maintain.
It wasn’t long before I noticed the coming soon listing in the MLS. To my surprise, the house was listed way over what it would sell for. The house was priced at least $50,000 higher than similar houses in the neighborhood that had recently sold.
I called the agent. “What happened?” I asked. He said that he went to his parents’ house and he showed them the relevant comparable properties that had sold. The parents disagreed on the comparable properties. They were valuing their home as if bathrooms and kitchen had been remodeled and the flooring was in excellent condition. They were angry at the son for even mentioning those lower priced properties because “they weren’t as nice as their house.”
Difficult Home For Sale
Not surprisingly, the house sat on the market. In one of the hottest years for real estate sales in the past decade, no one made an offer for the first 4 months. The agent’s hands were tied; he knew he needed a price reduction, but the parents wouldn’t budge. They kept telling him that “It just takes one” buyer and they were certain a buyer would come by any day.
After 4 months, the agent did get a price reduction. They agreed to lower the price by $5,000. The agent had showed them houses in the neighborhood that had been listed after their house was and sold in the time their house had been on the market. While the parents had no mortgage, they still had to pay utility bills, taxes, and insurance, so they were just throwing money away.
Some 6 months later, the house went under contract at about $45,000 less than the original asking price. The house was sold to an investor. The investor made the necessary improvements and re sold the house for close to what the parents had originally asked.
If you can’t price your parents’ house for sale, imagine all the difficult conversations real estate agents have with their non-family clients! After all, the son was in no danger of losing the listing.
Oftentimes, I think about what I would have done in that situation. That agent was in a tough spot. The parents weren’t being realistic; they had a bias that said their home is worth more because they owned it. The discussion about other properties wasn’t related to their pricing motivation. I’ve decided that my parents will be more rational when they go to sell their house (we can always be optimistic!)
If you are considering listing your house for sale, understand that even experienced agents can have a difficult time pricing your home for sale. There are all sorts of factors that go into the correct pricing, and many that aren’t obvious to sellers who aren’t actively involved in real estate. There are really two cautions on pricing that I might offer. Should you price your home for sale too high, you will have problems selling. Should you price your house too low, your house will sell, but you will be leaving money on the table.
At Deerwood Realty, we understand just how difficult it can be to price your home for sale. We take an overall look at the market data, and then we narrow it down to your home and how it fits in with the sales in the neighborhood. If you’ve been in contact with other real estate agents, and you just don’t feel comfortable with the listing price, give us a call for a second opinion. There’s no obligation, and perhaps it will confirm your suspicions.