Home Selling in 19010>Question Details

Sandy, Home Seller in New York, NY

No buyer interest on my parents’ 4/2.1 (19010). In 2005 was worth $1.2MM. What now?

Asked by Sandy, New York, NY Tue Jun 17, 2008

I have checked Trulia’s sales volume for Bryn Mawr and essentially there is no sales volume. It has gone down for Bryn Mawr, Villanova, Devon and Wayne by an astonishing amount (75% of the sales volume is gone). My parents are at wits end because they purchased their retirement house and they have to sell. They cannot even get anyone to come in to look at it (they bought it for $330k), let alone sell it. They tell me that market is completely dead, and their agent says that there is 2 ½ years’ inventory in Bryn Mawr.

At this point they are just looking for an offer. I asked them why they don’t drop their price a lot more, and they say that their agent told them not to do that. The agent intimated that doing so will reset all the valuations in the neighborhood and she (the realtor) and her office are advising people strongly not to do that.

What do you recommend that we do?

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I spoke to the realtor last night (and btw, thank you for all of your replies!)

She is a very nice person certainly, very polite and I can see why my parents picked her.

Initially she said that we have to be “patient”. I asked her whether we should drop the price, and she said “well, that’s your parents’ prerogative”. I said was there anything else we can do to at least get some showings, and she said that she would advise putting in a new kitchen. I asked her whether that would enable the property to move, and she said “it will help, but I can’t guarantee whether it will sell.” I asked her about sales volume in Bryn Mawr and the surrounding areas and she said “there isn’t much selling going on.” She then said that my parents could rent out their place until the market “recovers.”.

Trulia says that sales volume is down about 73% in Bryn Mawr by quarter (March-May ’08 vs. ’07), and from their numbers it looks like substantially more for the type of house my parents have, see http://www.trulia.com/real_estate/Bryn_Mawr-Pennsylvania/ so it’s pretty obvious that without a pretty sizable drop in price the product isn’t going to sell. I don’t think it’s a good idea to put $100k into the kitchen, better to drop the price by another $100k. I’m going to advise my parents to drop the price to $799k and see where we are. It’s under what others are asking, but better to be early than late, and others can deal with the value resets as they see fit. Given our situation if we don’t have an offer by the end of the summer I’ll review this at that time. Obviously it makes no sense to rent it out and suffer greater losses, and my parents are relying on me to help.

Anyway, thank you all for your help and replies. It gave me a lot to think about and I’ll let you know how it goes (or if it goes).
8 votes Thank Flag Link Wed Jun 18, 2008
Assuming they have to sell, they should determine the price drop since 2005, and set the sale price accordingly. What is the asking price anyway? I assume you mention 2005 because it was the peak. The hardest hit areas, and I am not sure about yours, have dropped 35% to almost 50% from their peak. That is a tough thought to swallow, especially for people who were counting on a certain retirement value. Taking it off the market, etc., does not address the reality that in hard hit areas prices are going back to 2003 or earlier prices. The prices will come back, but only at the usual appeciation rates. The result being that it will take many years for prices in most areas to come back to the "peak" It was only through vodoo economics and irresponsible lending practices that their house was ever "worth $1.2m. It was not real.
6 votes Thank Flag Link Tue Jun 17, 2008
Typical of Realtors to price fix a neighborhood so that they may preserve their collective commissions. The house price is highly inflated for the area. Reprice the house in the 5's and it should move. It sounds like your realtor isn't living up to h/her fiduciary responsibility to advise you honestly. The harsh reality is that your parents aren't going to get 1.1mm in Bryn Mawr now or in the forseeable future. There are more people leaving Pennsylvania than just about any other state in the U.S. Additionally, the RE market hysteria has subsided and the realtors, the appraisers and the banks who are mostly responsible for the bubble creation are now paying the price as it slowly lost air and now is popping. The market is nearing equillibrium and your parents should expect 3-7% appreciation over the next few years if they are lucky.
5 votes Thank Flag Link Tue Jul 1, 2008
If your parents received wrongheaded advice like the one below, its no wonder your parents can't sell their home and continue to be frustrated.

"Reduce the sales price until you hit a pricing 'sweet spot'?" I'm not sure which real estate school you went to, Thom, but you aren't selling peas.
~~~~~~~~~~~~~~~
Pete, that's why you're a "buyer and seller" and we are "real estate pros". It's ALWAYS about price. Price overcomes presentation, neighborhood, condition, etc etc. At the correct price anything sells. That the seller doesn't LIKE what the correct price is doesn't matter. Like this seller in the question. Stuck on what the price was in 2005, they will be for sale for a long time if they don't drop their expectations.
4 votes Thank Flag Link Tue Aug 12, 2008
A couple of choices spring to mind: They all are very harsh and undesirable. I am so sorry that you parents are finding themselves up against such a tough situation!

1. Lower the price anyway. It is not their responsability to protect the market. (sorry fellow realtors!)
2, Take the home off the market and borrow some equity out of this one to pay for the next. (If they can afford to hold both properties.. ..otherwise DONT take more equity out of the home)
3. Give up the retirement home and stay where they are for a while. How much will they give up in deposit money? It it is a large amount, then we are back to option 1.
The 4th option is not really an option, but a little lesson for those folks who are listening in to our conversation. Use your time machine and take the folks back to the time just before they bought a second home before they sold the first.
I could lecture for an hour on why a seller should put themselves in control and get the house sold first. With so much inventory available a buyer is in such a powerful position when they buy, that they may very well be able to make up for the lower price on the sale. In your parents case they have given up that power position.

Note that I didn't say the loss on the sale of the home. Is it really a loss to sell a home for three times what you paid for it?


It is my strong feeling that we are getting very close to the bottom of the market in many areas. I just wonder how long it will take for us to catch up with current inventory and begin to see any kind of upturn.
I also wonder where the interest rates will go if we start to see 'inflation' in home prices.

Oh my, what a world!

Eileen's Green Team
4 votes Thank Flag Link Tue Jun 17, 2008
Say Pete, I'm all for dropping the prices, I think a lot of the inventory is priced unrealistically, and I've walked away from many listings because the HOMEOWNER, not the realtor, wanted to to list at a higher number. How long have you been in real estate, since you know so much more than I? This is what I do for a living. And if you think agents had anything to do with the increase in home prices....well I wish you could have heard some of the conversations between a husband an wife in my car, bidding against each other about what they were willing to pay for a house. If you think realtors try to elevate prices and "preserve their commission", then you are the one who is not only foolish, but showing your ignorance.
3 votes Thank Flag Link Sun Aug 3, 2008
I would bet 5 years of salary JR, you're no longer in the real estate game. In fact, you're probably back working the afternoon shift at Cracker Barrel. Coming back to my answers on this initial questions only confirms how right I was then and continue to be right now. Goodbye incompetent realtors and your cookie-party open houses! Goodbye!
Flag Sun Sep 15, 2013
Get a new Agent. That's absurd for them to tell you NOT to lower your price. They have an obligation to you and if your not satisfied get a new agent.
3 votes Thank Flag Link Sun Aug 3, 2008
What is the feedback the realtor has received from those that have seen the house? I would not advise a major kitchen remodel. Instead, focus on decluttering, depersonalizing, neutralizing and low cost updating. If you are having difficulty getting buyers in the door, is could be lack of curb appeal or that buyers do not like what they see posted on the MLS photos. Best of luck!
3 votes Thank Flag Link Sat Jun 28, 2008
Sandy,
I too don't believe the home would still be worth the 1.2MM, but should be priced appropriately. If the home is priced and marketed correctly, it should sell. It makes me wonder if your agent is doing all he/she can to market the property properly. Has any type of appraisal been done to the property? ( using comparable sales, not homes listed for sale) It might be worth the money to have a licenced appraiser to give you a value.
The best of luck to you.
Michael

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3 votes Thank Flag Link Tue Jun 17, 2008
Sandy,

First of all, the house being "worth" $1.2MM in 2005 - you can toss that out the window. Inventory levels in those areas are higher than they've been especially in the higher price ranges and it takes longer to sell.

However, homes ARE selling. Typically, it's those homes that are in very nice condition that are priced well. Assuming the home is being marketed correctly/well and it's in a good location, ultimately, it all comes down to the price/condition equation. You are competing in a market which has fewer buyers with more homes for them to choose from. If you're not one of the top values in your price range, I'd suspect that the house will continue to sit.

Are you getting showings? If not, from the limited information you've provided (not knowing anything about the property, condition, dom, etc) and your parent's motivation, I'd reduce.
3 votes Thank Flag Link Tue Jun 17, 2008
I said you are an idiot if you've never learned the lesson of "price it right the first time". So, obviously, you never learned that lesson based on your comments. Stick with the old "fixed commission" model, JR mystery man. I guarantee you and your business won't be around much longer anyway with your dated thinking.

Its time to wake up and realize its not 1985 any more; its a consumer market---you can bid on everything from baseball cards and cars to hotels and plane reservations. Real Estate will be no different and the internet will drive the change.

Like it or not, the RE business is changing rapidly despite the efforts of Realtor orgs who lobby for anti-competitive fixed commissions. (Thank God for the Sherman Act).

Average commission rate is somewhere btw 4.5-5% and falling and will soon be a fixed rate.

So its time to put down your can of New Coke, turn off your Duran, Duran CD and step into the modern society, JR.

This poor woman and her parents are obviously victims of yet another incompetent real estate agent. Offering more of the same nonsensical advice is, well, idiotic.
2 votes Thank Flag Link Wed Aug 13, 2008
Sandy,

The major reason a home does not sell is PRICE.......

Our recommendation is to have another appraisal to get a sense for it's true value in today's market. This should shed some light on the reason there is no activity.

Today's buyers are very intelligent...they have access to incredible amounts of information and know how to use it. They also see what is happening in the "foreclosure" market and see the market changing around them. If you are not getting showings there is a reason and we can asure you, price is part of it.

Good luck,
The "Eckler Team"
2 votes Thank Flag Link Mon Aug 11, 2008
JR:

Wake up, JR. You're really in the dark (or maybe naive).

Not only am I a real estate attorney, but a broker as well. I've seen the foolishness that agents created AND continue to create for all but selfish reasons: COMMISSION. You must not operate in the real world, or you're too close to your own, to admit that agents WERE complicit in the bubble. I've brokered, bought and sold real estate around the world and EVERYONE knows what went into the most recent bubble creation: agents colluding with one another and agents colluding with appraisers and banks to create the phoney prices we've had 2003 to the present. Yes, agents do "get into neighborhoods" in the attempt to preserve commissions...


The current real estate model is BROKEN and there are too many agents who operate by old business models of fixed commissions and lack of true fiduciary responsibility. Most are looking to make their commission (usually for little or no work) at all costs and little else.
2 votes Thank Flag Link Mon Aug 11, 2008
Hmmm...I understood why you pointed out the 1.2 million.To give us a benchmark without the full property info.To put the MLS out here could be lowball suicide, now hat the enire internet knows yur parents really really want to sell.
I am dissapointed in Realtor "hinting" about her office not wanting to do that. She is not holding up her end of he bargain. I will go out on cynacil limb here and say it could be some Bryn Mawr and Main Line Realtors have been living high on he hog here for the last few years and aren't used to the extreme income drop. So possibly they have clouded money vision.
Curious what it is now listed at though? And definitely drop the price as said by many already. Your parents can't hold up the neighborhood pricing structures.
It needs to come back down to earth anyway for the good of the economy and future homebuyers.Especially in tha area. So in short Lower Lower, no incentives for now.
2 votes Thank Flag Link Sat Aug 9, 2008
If your folks can't get any interested buyers in the door, 2 things immediately come to mind, as noted by another contributor.
First, lower the price to a realistic comparable price in the area. The market is different and we all have to adjust.
Secondly, get a professional stager to come in and objectively look at the way the house shows. De-clutter, de-personalize and use a neutral color palette. Prospective buyers MUST be able to see themselves living in the house with little rehab.
In today's market, homes can sell in their desired price range, but only if the current owner has kept the property up to todays standards: light fixtures, kitchen appliances, bathroom hardware, wood floors or nuetral color carpet.
My husband and I are in our early 50's and looking to sell our home and move to the Thornton -Glen Mills area of Chester County. At this point in oir lives, we are through we re-habing houses! We want it move-in ready and will pay for it. I cannot believe the number of homeowners unwilling or maybe too lazy to follow the advice of all the home shows these days (HGTV; DIY) who have proven that homes kept up to date, clean, well-maintained and de-cluttered do sell!!
2 votes Thank Flag Link Sat Aug 9, 2008
If this is the first time you've heard of it, then you obviously haven't been in real estate very long.

Realtors try to elevate or preserve prices in neighborhoods ALL THE TIME. Ask any realtor about "getting into a neighborhood"--its about locking in sales and preserving higher commissions. Your foolish to think it doesn't happen EVERYWHERE. It does. And its one of the many contributing factors of the phoney increases in value that created the RE bubble in the first place. Its especially true in PA and other rust belt states where there are more people and jobs leaving the states than coming in. Price appreciate is back to normal levels, and the price of your parents house should be as well.

It isn't 2005 anymore. Its time to drop the price (unless you paid too much in the first place and get out from under), cut your losses and move forward. You're other choice is to sit and wait, but chances are your parents don't have another 20 years to wait if they're set in moving.
2 votes Thank Flag Link Sun Aug 3, 2008
Typical of Realtors to price fix a neighborhood so that they may preserve their collective commissions.
~~~~~~~~~~~~~~~
Actually, this is the first time I've heard it, so it is not "typical" at all. The only other time I've seen pressure not to drop the price of something is in mobile home communities. But those are not real property, and the pressure is not from anyone with a real estate license, but from the owner of the park.
2 votes Thank Flag Link Sun Aug 3, 2008
Sandy,

I live on the Main Line. Do you care to share with us the MLS number so that we may have a look at the property? I am not sure why you are telling us what it was worth in 2005....that was 2 years ago and the market has changed. What is their current listing price? For how long has the property been on the market?

In my experience, homes are selling in the area, just taking a lot longer. There are a few here and there which go under contract very quickly but those properties are generally in immaculate move-in condition and very competitively priced.

The agent needs to have a good strategy. Has the house been staged? What kind of photos were taken of the property? Are they getting good internet exposure? Have their been broker opens?

Would love to see the property so please if you care to, share the MLS number.

Thanks
2 votes Thank Flag Link Tue Jun 17, 2008
If the property is competitively priced and the area was not subject to speculative price increases, I'd agree with your parent's agent. There is a strategy that will however make the property more competitive without affecting values in the area. The first thing your parents should do is to determine whether the price is in line with the area, and whether the prices in the area are inflated. If the price is high and/or prices in the area are inflated, they should lower the price in addition to considering some combination of the following that will afford them an acceptable net.

Offer buyer incentives: pay buyer closing costs, buy down the rate and pay for a home owner's warranty.

In the price range of your parent's property, this pricing strategy will not provide the bargaining power that it does in median priced properties. They should therefore expect to negotiate any offers that come in significantly below asking price on the basis of price alone.
2 votes Thank Flag Link Tue Jun 17, 2008
Sandy, despite the doom and gloom you hear in the media, homes in the Philly metro area are still "holding their value" even in this market, unlike many other cities across the nation according to the Philadelphia Inquirer, click here for details -->
http://www.philly.com/philly/business/20080603_Study_finds_a…

With that being said, I just took a quick look at the sales in the Bryn Mawr area from a macro level and homes are selling. In fact, 5 homes have just gone under contract since March, priced between $750K-1.2K. And 20 homes have sold in that same price range over the past 18 months. That's equivalent to 1 sale per month, So what's the bottom line: homes ARE selling in this area and in this market ... how can you (your parents) ensure that theirs will sell ... they need to have a triple threat: 1) it must be priced competitively, 2) in excellent condition 3) marketed aggressively because the market is so competitive.

If I can assist you and your family in anyway, don't hesitate to reach out to me.

Best of luck!
1 vote Thank Flag Link Tue Jun 17, 2008
I'd say AMEN & AMEN to Eileens answer! IF the house has been on the market and no one is looking you need to DO SOMETHING! The choices may not be pleasant but that does not mean they are not the best option.
SELLER (and their Realtors) set ASKING PRICE.
BUYERS (the ones with the MONEY & DESIRE to buy) SET MARKET VALUE!
1 vote Thank Flag Link Tue Jun 17, 2008
Hi Sandy,

There are an overwhelming # of homes in the $1,000,000+ range in the Lower Merion area however million dollar homes are selling. I think the best advice I could give you would be to get a complete analysis of market statistics and adjust their price accordingly. While their sale may 'adjust' the neighborhood comparables, an agent's primary concern is to represent their client's needs first and foremost. If your parents need to sell, that should be the paramount concern. With proximity to Center City and Blue Ribbon School Districts, the area will not suffer long term and will continue to adjust according to the market. Please feel free to contact me if you have any further questions or concerns. Thanks!
0 votes Thank Flag Link Mon Jan 18, 2010
Sandy,
While houses days on market are longer than in previous years, properties are still selling. In fact, there are properties that get multiple offers. The three key factors in selling a home are location, condition and price. In your opinion, how does the house show. Who is the most likely buyer for this house? What would attract them to the house? Is it staged properly? How is it being showcased? Can a buyer picture themselves living in the house. I live in Bryn Mawr and I sell in Bryn Mawr. Obviously, it is a highly desirable area. The schools are outstanding! I have three children who attended Lower Merion Schools. One is a second year law school student, the next is a senior at USC graduating this year from their Annenberg School of Communications and Journalism and the last is a junior at Harriton. She is targeting NYU! Lower Merion School district is incredible. My fellow real estate agent, Mike Steele, who answered below is correct in saying your parents are selling their house and need not be concerned about the neighborhood. The bank appraisers know what a neighborhood is worth and so do buyers. I say sell!
0 votes Thank Flag Link Mon Jan 18, 2010
I currently have a listing in Haverford, 4/3.1, that my clients were sure was worth $1.2MM. When I inquired how they arrived at that value they showed me an appraisal from 2006. When I reviewed the appraisal it was evident that the appraiser did not use comparable properties. At that time banks just wanted to lend and were betting on conitnuous price increases to support liberal valuations. This was a self-fulfilling prophecy until the bubble burst. My estimate of the value in 2006 is no more than $950K. It will probably not sell for that much in today's market. It was initially listed for $1.2MM and it had its first showing after it dropped to $985K. So, was your parents house really worth 1.2MM in 2005? And what is it worth today?

If your parents think it is in their interests to ask less in order to accelerate the sale then that is how they should instruct their agent. Agents and brokers do not work for neighborhoods, they work for individual sellers and buyers and are obliged to act in their clients' bests interests

There is activity in Bryn Mawr but the buyers do thin out as the prices increase. Your parents should have their agent prepare a current market analysis and review it carefully to make sure their price makes sense in the current environment. Then they should make sure their house shows as well as possible. They could consult a staging professional if they and their agent need assistance. Touring some competing homes is a good way to make sure they get an objective sense of how their house compares.
0 votes Thank Flag Link Mon Dec 21, 2009
In the 2nd quarter of 2008, Bryn Mawr home stats were down but not dead. From MLS reports, pricing was off in te 19010 zip code by -24.14% in the past 12 months with days on market increasing and list to sale price @94.5%. There is a glut in housing of homes in the $1Million plus market but houses are selling. Bryn Mawr offers premiere Main Line location with easy access to Center City via pubic transit and exceptional public schools. Proper advice on staging, marketing and above all PRICING is essential in helping sellers in todays market. As a realtor, our job to meet and exceed the needs of the individual client not to worry about devaluation of the neighborhood. The right conversation would be to explain to your parents that we are coming off overinflated housing prices which peaked in 2005 and while pricing may be lower it's a result of the market readjusting not a devaluation of the neighborhood. Realistic assessment of your parents needs and the current market pricing is essential for them to sell and move on to their retirement home.
0 votes Thank Flag Link Mon Sep 1, 2008
Ah, Pete, I understand. True professionalism is calling me an idiot. Nice try.
0 votes Thank Flag Link Wed Aug 13, 2008
~~~~~~~~~~~~~~~
Pete, that's why you're a "buyer and seller" and we are "real estate pros". It's ALWAYS about price. Price overcomes presentation, neighborhood, condition, etc etc. At the correct price anything sells. That the seller doesn't LIKE what the correct price is doesn't matter. Like this seller in the question. Stuck on what the price was in 2005, they will be for sale for a long time if they don't drop their expectations.

*********************

Laughable, JR. You're obviously not a pro at anything, particularly real estate. Sorry I don't have my "title" correct on Trulia. I guess I'm too busy brokering, buying, selling, speculating...

THE NUMBER ONE REAL ESTATE RULE: PRICE IT RIGHT THE FIRST TIME. You are an idiot, JR, if you've never learned that principle. Idiotic advice, that you and many agents are offering (I can't stop laughing at the progressive markdown approach), is what got this person into trouble in he first place. Wake up, it's not 2005 anymore.
0 votes Thank Flag Link Wed Aug 13, 2008
Sandy:

If your parents received wrongheaded advice like the one below, its no wonder your parents can't sell their home and continue to be frustrated.

"Reduce the sales price until you hit a pricing 'sweet spot'?" I'm not sure which real estate school you went to, Thom, but you aren't selling peas. Ridiculous advice. Talk about devaluing a property. (I'll be sure and look for your listings, Thome make sure I never buy the first week.lol. )

What is THE NUMBER ONE WAY TO SELL REAL ESTATE QUICKLY?

Price the property correctly the first time.

Reduce the price to a reasonable value and the property will move. Avoid the grocery store markdown approach at all costs.
0 votes Thank Flag Link Mon Aug 11, 2008
Is the home on Caversham Rd?
0 votes Thank Flag Link Wed Jun 18, 2008
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