Can the lack of one key room such as a dining room impact showings? A reader has been told so by her Realtor, but she wants a second opinion.

Ms. Evans,

I ran across your name on the web while searching for some information on selling a home. I am hoping you can help point me in the right direction to get an answer.

I do have my home listed and have a realtor. Unfortunately we are getting very little activity on our home despite having two realtor open houses and a consensus that the house is priced appropriately.

One of the issues is that we do not have a dining room. What we have is a house that was remodeled and likely what was a dining room was opened up to the kitchen to create a large eat-in kitchen. I am not sure this is a reason we are not getting showings, but I do know that of all of the homes in our area from $400,000 -- $500,000 (we are listed at $469,000), we are the only home that does not have a dining room listed.

My realtor said you can't call this area a dining room because it is not a separate room. I have seen homes listed that do not follow that rule and am curious if you know what the rules actually are about that. If necessary, I could attach a photo of this area to help explain our particular situation.

I am hoping you can either answer this question or point me in the right direction to get an answer.

Thank you in advance for your help,

Illinois Reader

Dear Illinois Reader:

The short answer is that there are three factors that impact price: location, condition and design.

Location, of course, is where the property is in relationship to amenities, views, security, shopping, services, schools, activities, sports, other homes, noise, smells and so on. This is why homes overlooking the ocean sell for more than homes that back up to the city dump. According to your letter, your home has a desirable location, so we can strike that problem off the list.

Condition refers to the repair of the home. Has the owner taken good care of the property? Is it updated? Are mechanical systems in good working order; is it freshly painted; is the home clean and tidy? Judging from the pictures you sent, the home has been well-maintained, so that's not an issue either.

Design is about the exterior and interior elements: style, drive-up appeal, entertaining flow, and the practicality of the room sizes, storage, built-ins, and other elements. Your Realtor says there is a design issue. You sent a picture of what appears to be a breakfast room, or eat-in kitchen as you say. Your Realtor's right -- it's not a dining room.

Can the situation be fixed? Only a contractor can say if a redesign would favorably or unfavorably impact the overall design. Have you talked with a contractor? Perhaps you haven't because the cost or time and trouble would be greater than the reward.

You have feedback that the pricing is fair, but that other similar homes have dining rooms, which means your home is one room too small for the price. Also, it appears that the updates that have been done were before you purchased the home. Could it be that the updates are no longer comparable? Is it obvious to the Realtors and their buyers? Probably so. If so, then you have to add condition to the design problem, even though you have taken excellent care of the home. The condition may not be up to the comparables.

Comparables are a wonderful thing, but compiling them is an inexact science because it is based on such factors as previous sales which can not dictate price in the current market. Homes may have sold easily a month ago, but some change in the national or local economy may have buyers holding back. That impacts price, because the past is no longer relevant to the current market conditions which include fewer buyers for homes like yours. Market conditions are extremely important to pay attention to, because they can vary enormously from one neighborhood to the next, one city to the next and one state to the next.

When you put a home on the market, you not only have to consider what you want to net out of it, but what buyers are willing to pay. Today's buyers are paying inflated prices for homes compared to other goods. Many have to buy with less money down and riskier loans than in the past. They want the seller to assume more of the risk, by presenting move-in-ready homes with no shortcomings, should they have to resell. That's one of the factors driving new homes. New homes are built with modern needs in mind. Buyers are only willing to assume risk on an older home if the rewards are obvious. They will buy a home with no dining room only if some other factor is more compelling such as price.

Forty-five days without showings is a long time. In a slowing market, the first homes to suffer are the ones lacking location, condition or design. This could be a signal that the market conditions are changing in your area and their criteria is getting stricter. If that's the case, with condition and design both impacting price, your home may be overpriced for the current market.

Revisit the comparables again with your Realtor, and find out if other homes are getting showings and offers. If they are, your home is overpriced.

Published: May 24, 2005

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