Seller Wants Offers For Stage-perfect Home

Written by Posted On Monday, 25 December 2006 16:00

A seller writes Realty Times to say her staged-to-perfection home is getting no offers.

"I am currently trying to sell my home and am getting very frustrated because since we put it on the market we have had not one showing. The house is priced just right -- actually lower than what we would have priced it at if the market were good. I am an interior designer so the home is staged to perfection. The house is not even 2 years old and it is in pristine condition. We have it listed with the top realtor in Illinois who has aggressively marketed the house through intense advertising, but still no showings. Do you have any suggestions for me? My husband and I do have a contract on another home and we do not want to lose it. I am hoping for some advise (sic), please help, thank you, Kimberly."

Realty Times responds:

Dear Kimberly, sometimes it's good to hear the ugly truth from someone other than your Realtor.

It's frustrating when you feel you've done all the right things and the market is unresponsive, so my question is: Did you really do all the right things, or are you kidding yourself a little?

You say that you priced the home lower than what you would have priced it "if the market were good." When the market isn't good, that means homes-for-sale inventories are higher, and days on market are increasing, which means more homes are competing for buyers' attention. You almost certainly have a lot of competition from other homes. So, regardless of what you want to make on your home, have you been honest with yourself about pricing, not in the market youwish existed, but the market that really exists? Are you above or below comparable homes that have sold recently? From reading between the lines, it appears you still have some wiggle room in your pricing, but you just don't want to capitulate to the current market.

In other words, your home and you are special, but to buyers, you're a stubborn seller who is overvaluing her property. Consider the thousands you are trying to hang on to are keeping you from moving forward in your goals, especially if you are buying your new home in the current market. I'll bet you want it because it's a better home and you can buy it for less than you thought, or otherwise, why are you moving? I'll also bet it's priced below what the seller would have wanted to sell it for, too.

Here's the reality. If other homes are selling, even if they aren't quite as attractive as yours, they may simply be more favorably priced than yours, and that's why you're not getting offers. If you're below market price and not getting offers, then there simply aren't any buyers out there, and you're just going to have to stay put and wait it out, because a buyer's market could last a while.

If there's been a major job loss in your area, that throws a scare into everyone. As people find new jobs and leave the area, those inventories rise and it takes time for the market to absorb them. You can't expect the market to make an exception for you because you might have better taste than some of your neighbors.

Do you really need to move, or are you simply trying to use your home to make money so you can buy your next home? While there's nothing wrong with that, you have to face facts that right now at this point in time, you don't have market momentum on your side.

You've been in your home for less than two years. Usually it takes about five years of occupation for a homeowner to build enough equity to move up to another home without losing money. That's because of the high transaction costs of buying and selling. Five years is a long time compared to the quick timetable you've set for yourself.

Since 1968, homes have appreciated about one to two percent a year above inflation. In the last five years, homes appreciated 50 percent, and now that number is declining. If you've been in your home less than two years, you might have "made money" the first year, but it was still a gamble. You were relying on abnormal market appreciation to make money so you could cash out and move to a bigger, better home.

Unfortunately for you, the current market isn't going to allow you to do that with as much gain as you hoped.

Some markets are bad because of severe job loss in the community. That can devastate home sales for years. If that's the case, you may be in your home for quite a while before you can sell it simply because there are no buyers out there. And the buyers who are out there aren't stupid -- they know they can get a bargain, and it doesn't sound like "bargain" fits the description of your house.

Another problem you may have is the age of the home. Houses are just like cars -- as soon as they are driven off the lot, they're used cars. Your home is only two years old, but to buyers, it's used. And if you're surrounded by brand new construction, where buyers can pick their appointments and colors, you won't be able to compete with the incentives builders can supply. For example, your home in a new neighborhood may have landscaping, but when builder sales slow down, guess what they throw in to get buyers to buy? Landscaping. So there goes your trump card.

You say your home is staged to perfection, but that does you little good if no one comes through the door to see it, and I can guarantee they're not coming because of price.

If your Realtor has done all the marketing possible to raise interest, and there are no lookers or takers, then without question the problem is price.

Sellers have a lot of pride about their homes, and with your skill as a designer, you probably have more pride than most, and have priced that expertise into the home. But a buyer perusing the Internet for listings isn't going to know that. They won't know that until they come inside and see for themselves, and they're not going to if they think you're overpriced.

Also consider your goals -- getting the "greater fool" to pay you so you can move up. You can't realistically expect to get paid handsomely for occupying your home for only two years. The buyer doesn't owe you the opportunity to cash out and move up to a better home, especially in a fearful environment where the buyer could be taking a real chance that home prices will go down even further.

Keep in mind that in a buyer's market, the risk for buyers is just as great as it is for sellers, if not more so. When they make an offer in a declining market, they're betting the market will hold, but it very well may not. They could quickly lose money and have no equity as well. So buyers are only going to make offers that they feel are a minimum risk -- the least amount of money for the best house they can afford.

So, you may have to revise your goals. You can shave some more off the price, and buy your next home with less money down, or stay in your home, forget the new house, and build equity over time.

If you choose to lower the price, buyers will be intrigued to consider your home, and they will see for themselves what a beautiful home you've created. Your home will compare favorably against other homes in both condition and in price.

That's when they'll start making offers.

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Blanche Evans

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