By Mike Bodeen · 2 April 2018
I recently met seller Lon at his home in McCormick Ranch. He was referred to me by a former client. Jonathan and I really appreciate the referrals from friends and clients. Referrals and repeat client business has been the foundation of my 4-decade real estate career.
Lon’s home is in a great location in McCormick Ranch. He had the home built in 1987. Over the years he’s made some nice improvements to the home, although there have not been any significant changes to it in over 10 years. In an oft quoted real estate comment, the home is “dated.”
‘Option B, is the gut level truth, which if expressed,
will probably send me packing.’
After showing me around the home we sat down to discuss value. He had the home listed before me by another agent for 84 days at $595,000. It had been listed before that for $559,000. Before that for $589,000. Before that for $629,000. Before that for $699,000. It had been on the market for over 400 days during the past 4 years. The average number of days on the market in his zip code is 125 days. The median price range in his location is $555,000.
So here’s where the rubber meets the road. Realistically I have two options. Option A is to state a price that I know is high but will get me the listing. I will even inform the seller of my doubts in being able to achieve that price, but hey, you can always go down on price right?
The other option, Option B, is the gut level truth, which if expressed, will probably send me packing. I explained to Lou that his home is in no man’s land. Buyers today want a home already “updated.” Or they want it at such a price (read: low) that if they have to renovate, it won’t be creating the most expensive home in the neighborhood. Not many buyers today have gobs of cash to update their homes like that after purchase.
I opted for Option B. I usually do. The good news I said to Lon, is because of his location, and good house bones, he could himself put money into the home to update it by doing what a flipper would do, and he could make really good money. But that takes time, money, and risk. Or he could set the price between $525,000 and $550,000 and get the home sold in a reasonable timeframe. If he wanted a higher price without making changes, nothing will again happen.
The reason why some homes don’t sell is usually not because of the home, but because of the seller.
Lou was bummed. I was sent packing, but I slept well.