Sitting On Rehab For A Long Time. Don't Know Why?
Hi
I purchased a property in a beautiful
subdivision in IL about a year ago. Remodeled this property before I even
closed on the house it was a special sitiation with the bank my wife's aunt
was the vice president. The house was
built in 1998 shows like brand new after the remodel. Have had this property for
sale for close to a year and cannot sell it.
Have used my current realtor for 7 months, she keeps telling me the
market is just weak in this area. I have had the house appraised and have lowered the price on the house twice. Its
around $70000.00 below market still
cannot get any showings!!! At this point
I have no clue what is going on. Should I
change realtors again? Any ideas? Any
Advice? At this point I'm thinking of discouting the house 15% just to get rid of it. :-?
Typically properties doesnt sell for one of four reasons.....
1. Location
2. Price
3. Design
4. and at times....marketing
What has your agent done, other then list it in the MLS?
NC
[ Edited by NC_Yank on Date 10/20/2004 ]
My agent has done the following
1) Open house 4 to 5 times no one
shows up. Her comment to me is that
open houses just do not seem to
work in this area.
2) Advertised in 4 local papers on a
weekly basic.
3) House is listed on a number of virtual
tour real estate sites.
4) I have added a signing bonus 3 times
to the selling agent all the way up
to $15000.00. Still Nothing.
5) The design of this house is very
nice wide open, volume ceilings,
neutral colors, stainless steel
appliances, etc...
6) Location rather sparce area but nice
Sits in a subdivision with 80 other
homes surrounded by (2) Golf
courses and tennis courts.
7) Price is way below market.
I still don't get it.
Billster -
Have you researched what other properties have transfered title on the same street? Your realtor should also be able to give you a average day on market analysis instead of a soft market excuse. I suggest a short term incentive to your realtor.
I have offered my realtor a $15000 signing bonus on the side ,she is my
wifes 1st cousin works for a very
high end reputable realty company
Still Nothing just excuses.
Was it a murder house?
Funny. I'm dying over here. No nothing
wrong with the house.
You need to pull comps for the last 3-6 months to see what's going on. Have your Realtor show you your competition. How many houses have been sold in the same sub in the last 6 months and how many are for sale now. What's your average days on market for that area. Have you tried to sell it yourself with owner financing. What ad is your Realtor running. Sometimes its just a simple thing like the wording that is put into your house description.
1 other house sold in that suddivision
in the last 6 months which really got me
hot. My wife looked at this house with our realtor it was higher priced, older, with less square footage the same people that bought it looked at our house
first but for some odd reason purchased this dump. Our house is a more modern
looking house the other house that sold
was more of a country looking house with the wrap around front porch. My guess is that the other house was more
to those customers taste. As far as market time 1 or 2 homes have sold in that area in our price range in the last 6 months. But like I said originally we have dropped the price a number of times to get under that price range. Still
with no results. :-?
Your price is too high.
Is there a major defect? Like is it a 1 bedroom house in a neighborhood full of 4 bedroom houses? or a 4 bedroom house with only 1 bathroom? A single car garage with all the other houses with 3 car garages?
If there is a major defect - your price is still too high.
Is the layout strange? - then your price is too high.
Are they building a lot of brand new houses nearby that developers are giving better deals on - then your price is too high.
If a house is listed in the MLS and it isn't getting any showing - the price is too high. Even if the house is in the ghetto, if the price is right somebody will buy it.
It all comes down to price.
Its a 5 bedroom, 2.5 bathroom house
with a 3 car garage. All houses in that
subdivision are around the same sf
with around 4 to 5 bedrooms. Price has
been dropped repeatly still with no results.
What's your property profile that your realtor is using. Do you have a copy of your listing you could share with us.
What's the job market like there? Is the economy going through tougher times than usual?
I would suggest you consider advertising it "owner will finance to deserving buyer". If you can sell it and take back the note you can do a simulatenous closing (if you structure it right from the git go) or you can hold the note for the cash flow and sell off part down the road for your next project or just keep on keeping the payments coming in.
You are passing up a lot of potential buyers that might have fair credit and a down payment, but for whatever reason do not qualify or cannot wait around for traditional financing.
The credit score is key and the amount of down is dependent upon that in order to make the note most marketable in the future.
Good Luck.
[addsig]
The house is listed on www.Realtor.com
the MLS ID# is 914934 and comes with
a virtual tour included.
Thanks for all the feedback
I would offer a 20% second mortgage allowing people to come in no money down if they can get a conventional 80% mortgage. If you don't want to carry paper, you can always sell your note as a discounted note backed by real estate.
This will open you up to a new universe of buyers. I did take a look at your house - looks nice - don't know your competition though.
[addsig]
Hi Billster,
Looks like a very nice house. I agree most with the rehabinator on this one. Perhaps there is a disconnect between what your realtor is telling you the market price is and what it really is. Just by searching your zip code, there is a 2001 5/3/3 for sale for more than $100K less than yours. That is the only 5/3 on www.realtor.com in your zip. The more expensive ones are 5/3.5 or 5/4.5s. If you own the house outright and don't mind holding it for a while, try dropping the price some and offering the owner financing/lease optioning methods.
I use short-term asset financing (hard money) for most of my flips in the 15% range, and I often have $3-5M going at a time. Interest is my largest expense on most projects, so quick sale is important. In a fast market, if one of my houses has not sold in 3-5 weeks, I drop the price drastically every wed/thurs until it sells even if I take a loss on a few properties. My key is turning the repairs around fast (2 weeks) and listing it at a price that will sell fast. Since my variable expenses are proportional to the time I hold the property, I am often more profitable when I list a property for 5-10% below the closest comp and sell fast, than trying to hold out for the fair market value. This works because I am buying foreclosures and preforeclosures at 20-30% below market so I don't have to depend on appreciation (which helps when a house falls out of escrow 5 times and you hold it for 7 months). I have a good friend who makes a killing buying foreclosures in Compton, CA and other ghetto areas around LA. The houses are literally crack houses sometimes before he buys them, but he makes them presentable and sells them at the right price fast.
For your specific case, you are competing with a house that is selling for $385K and yours is $499K. While realtor scan see trends and past sales, home buyers usually only see what is active on the market today. I'm not convinced that the 15% discount you are talking about will do the trick unless you happen across a family that is willing to pay a premium.
As for the realtor, there are a few sayings about doing business with family. My advice is make sure you would hire them even if they were not family when your own money is on the line.
what subdivision are you in ?
I am in the Kingsbridge subdivision
I have to agree with most of things that NC Yank is saying.
I also I should mention that white paint makes the house looks so cold. Maybe you can use earthy toned color. Maybe you can throw some funiture, decoration, and window treatment to warm up the house. It is a very nice house, but there is not curve appeal. What about shutters by the windows
I totally agree with other people about offereing creative finanincing such as owner financing, seller 2nd, or lease to purchase.
Good luck.[ Edited by SmileyFace on Date 10/21/2004 ]
Bill,
You have a nice property. The issue is that the pool of buyers who want to pay half-a-million dollars for a house in unincorporated McHenry county is really small. McHenry county is attracting people for its affordability, and I think it's for the houses under $300k. It's a tough time for many luxury properties, and location is one of the key decision factors.
However, no matter how bad the location is, the price is always a factor. If you want to just get rid of it, lower the price, and the buyer will surface. If you can continue holding off(i.e. can afford mortgage payments and taxes/utilities), you can try to keep it until next summer, as the buyer is bound to surface by that time. Based on what I saw, my honest belief is that you're just dealing with a very small pool of potential buyers.
Being on the market a long time, and with repeated price drops may lead potential buyers (and/or their Realtors) to think something is wrong with the house. I looked at the virtual tour, and it really looks like a nice property.
Most realtors, when they are searching for properties, enter price ranges. In this case, priced at $499K, you may be limiting your prospective buyers to those looking for homes up to $500K.
If the house is worth, and legitimately appraises for more, why not list it for its' full value. Yes, why note increase the price?! You may be surprised at the results!
Another option: If after raising the price, you still have no offers, you may want to consult an auction service. I would use a national sercice, not the local auctioneer. If you don't know of any, I can refer you to a couple.
Good Luck!
All the advice given so far is about selling the property. You need to sell the financing, because at this point, nothing else has worked, reducing the price endlessly, etc.
Offer to sell the house with owner financing, 5% down, and then work with someone who can help you structure the first lien so that it commands the highest purchase price at close, which will result in cash in your pocket, just as if someone had bought it the conventional way at one of your reduced price levels - it's like with a business when you increase income or decrease expenses, it all goes to the same bottom line.
Of course you will take a discount on the sale of the note depending on buyer credit profile, collateral evaluation, interest rate, DP, etc., but there are programs and ways to minimize that discount so you get a buyer in your property, and get to a cash position, without having to carry any paper.
Sometimes in extreme circumstances, sellers are encouraged to hold a small second, but this may not be necessary.
Open up the very real potential with creative financing, and you open yourself up to the most amount of options to sell your property, without the risk of carrying paper, or losing money as your holding costs drain your account day after day.
Your realtor sounds inept. Hope this is helpful to you, best, Dave
This is a nice house and you did a very good job. However, 500,000 is too high for this house. Your fixtures, cabinets and appliances (to a degree) and layout are not those expected in a half million dollar house.
The layout is very closed in. The trend now in higher-end new, or like new homes is an open layout ( for instance, lots of newer houses have kitchens with breakfast bars that over look the living/family rooms.) This is not a huge problem, but again, someone who is going to pay that much will want a more contemporary layout.
I suggest that you look at Wiseman-Hughes homebuilder home sites. This will give you a real comparison of what most people will expect when thay are paying that much.
Bottom line...I agree with the other posts, you need to SIGNIFICANTLY lower the price and/or consider holding the entire note yourself for a year or so, or at least 30-40%.
You have to not only be a creative buyer, but a creative seller.[ Edited by west2nd on Date 10/21/2004 ]
It's price, here's your competition now:
1502 Summerhill, 357K, 5 BR/2.5 BA
10 Montclair, 384K 5 br/3 ba
1005 3 Oaks, 450K, 5 br/2.5 ba
805 Rawson Bridge, 459K, 5 br/2.5 ba
In a weak, slow market it's AT LEAST equally important to be priced in line with your competition than it is to comp, especially when they are old and infrequent comps.
Not to mention you are at the top of the heap in the $300K-$500K 4+BR category. Also, is your realtor local? As a former realtor, it has less to do with advertising than it does with price and who you know especially in the upper price range. I about 10 minutes from that area (McHenry) and it seems high to me.
Moral: Lower your price and consider a new local realtor if not already.
Yes, another thing is curb appeal and presentation. Your place is clean and neat, but does not stir me. I could not see wanting to live there (for that price)
This may seem trite, but look at HGTV's show Curb Appeal and the other show where they help sellers fix up their place for open house showings. I was AMAZED at how a little different paint, a couple of rugs, curtains and some flowers TOTALLY changed the look and feel of some of the houses. Didn't cost them all that much either.
I'll bet a few bucks thrown into it that way will at least garner some more interest.
No doubt - nice house. As someone looking at houses myself right now (for a personal SFR instead of as an investor) I can tell you that I don't get much a feel for the house looking at the MLS ad. I'd add at least 7 pictures of Kitchen, master, master bath, family room, entry, backyard and maybe 1 guest room. Virtual tours are time consuming like someone else said and I tend to not even view them personally (and I have high speed)
I wouldn't add furniture - empty space is good and people envision their own stuff.
Really nice house though. I hope you get what you want
west2nd, he does NOT have to hold the note for a year or two, why do you say that?
He can sell a properly structured first lien at close for a comparatively minimal discount, based on first lien size.
Buyers buy these new notes ALL the time, no need to carry ANY paper in most circumstances
Appreciate all the feedback. Its seems
that members from Illinois are more in tune as to what is going on in this area.
I just want to say that this particular house was appraised for $530000.00.
All lot of members are trying to comp out this property with properties in Cary
that are on main streets on .25 acre lots
The Kingsbridge subdivision has 5 homes for sale at this time with prices ranging from 464900 to 699000. This is my only competition. Also some of the feedback is the house looks cold with vinyl siding and a low end kitchen. I am an investor in the chicagoland area but also own a residential and commercial painting company. You will find very few homes with the calibur of paint work that are inside and outside of this home. Not a single hairline crack on any walls or ceilings. Ceilings are all white flat thru out and walls are a navejo cream.
Exterior cedar siding on (3) sides, not vinyl siding have (2) coats of Rez Solid color stain. This house has Pella windows thru out, I also put in 4000LF of solid oak trim, all solid oak doors, solid oak closet doors. The kitchen has over $10000.00 dollars worth of high end stainless steel appliances and 1.25 inch solid granite counters and backsplash going all the way up to the cabinets. Flooring is all italian stone
except for the bedrooms, and LR/DR area. You cannot buy this particular house in Cary for under $500000.00.
Maybe in other states you can.
I believe the member from deerfield IL hit right on target with his feedback. I appreciate al the feedback on holding some paper on this house in order to get some buyers, but really not interested in doing that right now, have just sold 2 other properties of mine in IL
and want to cash out on this one to because of my recent purchases in Florida. With close to 2mill in purchases in Florida in 9 days I just do not want to hold any paper on this house. At this point I have 3 investors looking at the property because I am offering a 15% discount, one of them I know personally I think he might buy it on Monday and rent it out until the market hardens in that area. Won't lose any money at this point which I am happy about. Anyway thanks for all
the feedback good or bad.
Great Forum!!!!!!!!!!!!!
I would lose the virtual tour. I couldn't get it to work the first time. When it did work it was slow. I would put 10 pictures or so with bright lighting. Show it off. Put the granite counter tops, along with the oak trim and oak doors in the listing description. Make it sound like a 600,000 house not a 250,000 house. You first 2 lines should create something or a picture to a buyers attention. Tell me about the great features. The ad is dull and boring.
You need lots of fluff in there
Beautiful Oak doors and trim throughout. Granite countertops. Over 4000 sqft. Big garage for 3 cars.
Your selling an expensive home. Make it sound like it is.
It's a nice looking home and your listing ad doesn't do it justice.
Bill,
I'm flattered that you agreed with me assessment of your situation. I totally agree with your idea - get rid of this house as long as you're not losing money and focus on Florida purchases - waterfront properties will ALWAYS be in demand, and especially in Florida. I think that transaction will make you a much happier camper.
From a woman's point of view, I agree with the others that you need to add in your description of the property about the granite countertops, Italian stone flooring, exterior cedar siding, Pella windows thruout, the solid oak trim, etc. as well as add pictures to help with the www.Realtor.com listing. You can't see all of these features from the Tour at all and since the listing doesn't mention it, I would not be hardpressed to go out and view it unless I knew for a fact that it was thousands upon thousands under market value. From the way you describe it, it sounds wonderful, but you can't SEE it from the tour. People are right when they say that the kitchen, bath and closet space sell a house to a woman. The first thing I want to know is how many kitchen cabinets and then next the bedroom size.
Good luck.
Quote:
On 2004-10-22 09:43, Billster wrote:
Also some of the feedback is the house looks cold with vinyl siding and a low end kitchen. Ceilings are all white flat thru out and walls are a navejo cream.
Exterior cedar siding on (3) sides, not vinyl siding have (2) coats of Rez Solid color stain. This house has Pella windows thru out, I also put in 4000LF of solid oak trim, all solid oak doors, solid oak closet doors. The kitchen has over $10000.00 dollars worth of high end stainless steel appliances and 1.25 inch solid granite counters and backsplash going all the way up to the cabinets. Flooring is all italian stone
except for the bedrooms, and LR/DR area.
Your last post here sells the house about 1 million times better than your listing does. I got none of what you posted here out of your listing. I would hate to think you are having to walk away from this one over a crappy listing. That listing does everything it can not to sell the house compared to the post you made. With the kitchen as you describe it I just don't understand why you are hiding it in the listing instead of showcasing it.
Nice House! From what I see at www.Realtor.com, the neighborhood is nice, not crowded, semi-rural, and fairly new. Judging by the rear view of the house - seeing neighboring houses, new neighborhood = no mature landscaping. In my opinion, if you stand to make substancial money at $499K, I suggest a professional landscaping job in the front yard. The back yard needs some shrubs and smaller flowering trees to break the cold boxy angles of the house. I believe that the yard will bring in the buyers. The front of the house needs some color. Even some simple annuals would greatly help.
The price is probably a little high yet. The highest priced homes in a neighborhood are the slowest to sell. Maybe you could do the landscaping and drop the price a little - say to $479K. OR, no landscaping and drop the price to a more competative $439K. I understand that the yard is much larger than the others, but that really only makes it more desirable, not a whole lot more valuable.
Again, I think professional landscaping with larger trees giving a more "matured" look will give you a positive competetive edge! Better get it done before winter sets in if you go that route!!!
Hope you sell soon...