I was showing homes in Kirkwood the other day. If you are familiar with the city, the area can be kind of tricky to get a good idea of pricing because there are many homes that have been torn down in favor of new homes. The neighborhoods tend to be a mix of old and new.
My buyer clients have been looking for a home with a large lot. The way the house sits on the lot is important to them, because they want to be able to add a garage or shop some time down the road. Large lots are a premium feature, partly because they can accommodate huge new houses.
My own philosophy is to let buyers see whatever they want to see. We will schedule appointments anywhere. I usually have some idea when a home is overpriced. Two things usually stick out.
- In the current market, the house is for sale for more than two weeks
- From the pictures alone, there doesn’t look to be a decent explanation for the high price (bad curb appeal, if you will)
We knew the house was listed at the wrong price because there had been a $30,000 price change made within the first two weeks the property was on the market. I wanted to go over some reasons why I think the agent listed it so high and you can decide as the reader if the agent was trying to buy the listing or not.
Why did the Realtor agree to list the property so high?
- The house was in Kirkwood, and it was really close to some fantastic shopping
- The house was close to major highway access
- The housing market in St. Louis has been on fire for more than a year, characterized by low inventory and low interest rates
- This particular home had been updated with a 1st floor laundry, new master bedroom, new master bathroom, and a new back patio and retaining wall, increasing the square footage of the home significantly. The remodeling cost could have very well been more than what the sellers were asking as a sale price.
Where might the Realtor have been incorrect in their price assessment?
- The house was built in the 20’s and the updates weren’t really that well done.
- The neighborhood had gone through a significant change: Many of the similar homes had been torn down for much larger homes
- With the exception of the additions, the house was pretty plain.
- The basement showed signs of leaks as the carpet was not permanently attached to the floor and the walls had numerous cracks, including 2 horizontals.
A Common Realtor Misconception
I think a lot of the general public believes that it’s the agent’s job to get the price right before they come to market. Maybe the agent thought the price was right, maybe they didn’t. In the end, the seller determines what price to come to market, based on the agent’s feedback.
We don’t know the pricing strategy for this particular home. It’s possible that the sellers decided that they would only list their home for a certain amount and if no one put in an offer at that price, they would agree to lower the price over a set number of weeks based on the number of showings. If the sellers felt like the risk of overpricing their home was worth the chance that their house might sell for less than it would have, there’s not much the agent could have done differently.
It will be more than $30,000
Since the house didn’t sell after the price change of $30,000, we know that it’s going to sell for even less than that. The longer the house sits on the market, the worse it is going to be. Unfortunately, other than price changes, there’s no way for the home to get in front of new buyers. The best and most able buyers have already been through the house. Now it’s a matter of waiting for new buyers coming into the market.