RKB

Sue, both Karen and Pete have good advice below. Middleton currently is (and has been for several years) a hot market, since it is routinely named as one of the best cities in the US. If you are at least getting people in the door, then there must be something about the house that people are finding of interest - perhaps the location alone is enough of an attraction. But as Pete said, the inventory of houses is pretty high right now, so it takes a lot to differentiate your house from all the others on the market. I've seen some realtors give the advice that if you have more than 10 showings but no offers then you need to reduce the price. But in my opinion, that's not true in today's market. Perhaps that gives a quicker sale to the realtor, but with so much inventory right now I think that's short-sighted advice for the seller. The other interesting thing is that with so much inventory, people tend to only look at the houses that have been listed within the last 30 days (or less) because they figure if it was a good enough house at a good enough bargain, someone would have taken it already. So if your house has been listed for more than a month, it is automatically "blacklisted" by a lot of agents and buyers, perhaps unjustifiably so. You might see an abrupt drop-off in the number of showings once you pass that 30-day mark.

I think to answer your question, you need to consider how quickly or how badly you need to sell the home. The market in Dane County is a bit sluggish right now compared to prior years, but things do seem to still be moving gradually. If you are able to wait a while to sell the house, then it might be wise to wait until the market picks up a bit so you can get a decent price for the house. But if it is imperative that you sell it quickly, you may need to cut the price, because it seems like everyone is looking for a bargain right now. There are enough sellers in financial crisis right now that people are able to snap up houses for less than the fair market value, thus driving down the housing prices for all sellers. Why pay $300K for a house when you can buy the foreclosure a few blocks away for $200K? So if you want to get top dollar and aren't in a hurry, you should consider taking it off the market and waiting. If you need to sell it quickly, even if it is at a huge discount, then you may need to make some price cuts.

As Karen suggested, see if you can get feedback from the buyers who have looked at the property to see if you can get any helpful advice, but it may not necessarily help. We had our house listed for six months. We probably had at least 50 showings, but not a single offer. And the feedback we were getting were things that were irrelevant: buyer wants a 2-story instead of a ranch, buyer wants a 3-car garage, buyer wants an exposed basement - these were things that we couldn't possibly offer, so I'm not sure why the agent was even showing them our house. I think that's just the nature of the market right now. Buyers can afford to be really picky, and agents are anxious to show them as many properties as possible in order to make a sale.

Our realtor kept urging more and more price reductions, until we were at a point where we would have had to *PAY* about $20,000 at closing (over and above the sale proceeds) just to get rid of the house, assuming we could even get someone to offer the list price. And - I might add - we were NOT overextended on our mortgage, so it's not like our bad financial decisions were coming back to haunt us. We were affected by the example I gave before - there have been several houses very similar to ours that have either been foreclosed or sold in short sales for significantly less than the assessed value. These comp sales have consequently driven down the value of our home.

We concluded that instead of selling our house at a fire sale price, we could take that $20,000 cash that we would have had to pay at closing, and use it to pay the mortgage and maintenance for the next year, and then we'll still have the house as an asset, rather than being $20,000 in the hole. We're hoping that the market will recover enough in a year that we could actually get a fair price for it. Thankfully, we have the ability to do that while many other homeowners can't.

So anyway, that's my advice. I'm not a professional realtor, but that has been my experience as someone trying to sell a house in Dane County right now.

Good luck! - Wed Oct 8 2008, 12:49

"I was in a seminar recently and the first thing the trainer asked was who has listings? Simple question, everyone put up a hand. His next words, they are all overpriced or they would have sold. "

I'm not a realtor, but to me this seems like a gross oversimplification of the selling process, and is solely looking at the situation from the realtor's perspective. There may be a multitude of reasons that a house stays on the market for more than a day or a week or a month, especially in the current market. There is such a huge inventory of houses that you can't realistically expect a house to sell immediately. I don't think it's fair to say that if a house doesn't sell immediately that it has to be overpriced.

If you price a property well below its value, then of course people are going to snap it up quickly. But is that in the best interest of the seller? Sure, the realtor(s) involved get a quicker commission, but the seller may end up needlessly losing valuable equity in their home. If I hire a realtor and agree to pay him a commission to handle the sale of my home, I want him to consider my position and my best interests, not just what is going to net him the quickest sale and move his inventory. Part of the realtor's responsibility is to determine a fair value for the house, and to market it in such a way to demonstrate its features and value.

I have to wonder if this mentality (as described by your trainer) is part of the reason that the housing prices are dropping so dramatically. The media is feeding us all this doom and gloom about the economy, the unemployment rate, gas prices, the housing market. Realtors are using this information to scare sellers into dropping the prices rather than "following the market down." But by doing so, they are actually driving the market down by decreasing the prices. I mean, what recourse would we have if we agreed to sell our house for below what we feel the fair market value is today, and the market rebounds in the next few months? The realtor would still have his commission, and we'd still be soaked. We can't unsell our house and sell it again at a higher price.

The data that is available on this website does not substantiate that the housing market in our area has declined as dramatically as the realtors would have us believe. Realtors have a major role in defining the market prices, and they have an ethical responsibility to do what is fair. - Wed Aug 27 2008, 07:20

Thanks for the feedback, Mikey. I guess everybody has their own tastes. We liked the back yard, and with the landscaping berm you don't even know there is a road back there. The lot cost us more than other lots in the neighborhood, but we thought the extra money was worth it. It's double the size of other lots, and we don't need to maintain the back 150' - the homeowners association takes care of it. So it's a large yard with little maintenance. Sure, we still have neighbors close on either side, but we don't look out our back door into our neighbors' house, it's more private. That's why our house cost us more than an almost identical house nearby. When we were first looking at the neighborhood, we fell in love with a house with the same floor plan that was priced significantly less, but it had condos in the backyard. That didn't appeal to us. But now that we are trying to resell, it sounds like the back yard is a detriment. For some reason buyers don't seem to like it.

Plus, we paid to have a lot of extras put into the house - higher ceilings and windows in the basement, higher quality appliances and fixtures, upgrades to the master bath, higher quality flooring, etc. And put a lot of money into landscaping and finishing the basement. But now it appears that all of that was a waste, because it doesn't add any value whatsoever. Buyers don't seem to see the difference.

By the way, if you are considering a house in one of these neighborhoods, I'd steer away from the houses that have the carriage lanes and garages in back. There have been a lot of maintenance issues with the carriage lanes - snow plowing, trash pick up, etc. At the homeowners association meetings, there are constant complaints from the owners that have the carriage lanes.

Thanks again, and good luck with your hunt. - Tue Aug 26 2008, 06:49

Hi Mikey,

I don't have the answer to your specific question, but I do have a home in the area you describe, in Veridian's Heather Glen neigborhood. It is a good location, safe, quiet, with convenient access to shopping, dining, Beltline, bus routes, etc. Just curious... if you are looking to buy a home, why does the number of subdivisions matter? I understand why you want to know the density of SFHs, and why you would want to know how many of them are for sale. As a seller in this area, I'm interested in what buyers are looking for. I'd appreciate your input. - Sun Aug 24 2008, 09:22

Good info, Rockinblu. I am interested in reading more on your blog, but I can't seem to access it without a password. How do I get a password? - Sun Aug 24 2008, 15:50

Thank you, Elaine! I read the Madison study before listing my home in Madison FSBO in 2006. And as I stated previously, we had great succes. I think that FSBOs can be quite successful under the right circumstances. In my current situation, I definitely feel like our realtor is trying to price us under the current market in order to effect a quick sale, without taking our needs into account. - Sun Aug 24 2008, 15:36

Ian stated:

A Realtor's job is to find the best options within a timeframe for their client, and what is left over is what they get. If that deal is to make less commission...so be it.


So, what recourse does a seller have if they feel their realtor is not finding the best options or making sufficient attempts to adequately market the property? Can we get out of our listing contract prior to the termination date without breaching the contract? I've read the language, and it seems pretty ironclad - it doesn't seem like we can't get out of it without it being considered a breach. So I guess the other alternative is to somehow talk the realtor into taking less commission. Any tips on how to do that? - Sun Aug 24 2008, 14:33

"If you don't price it right, neither you nor the agent is going to get a paycheck."

But, JR, if you don't have to pay that 6% commission, you have more flexibility on the purchase price. We could sell a house for $300,000 and pay a realtor $18,000, or we could sell the same house ourselves for $282,000, and end up in the same place financially. If you have two identical houses, one listed at $300K and one at $282K, obviously the second one is going to be more attractive to buyers. I know that realtors view FSBOs in a negative light, but that's the reality of the numbers. - Sun Aug 24 2008, 12:06

We sold a house successfully by FSBO in 2006 when we built a new house. The market was still pretty strong at that point, and we had little difficulty in quickly closing a deal. Selling the house FSBO (and not having to pay a realtor's commission) gave us enough money to put 20% down on the new house. Now, two years later, a job relocation makes it necessary to sell our new house. Because of all the media jabber about the housing market, we elected to go with a realtor for the benefit of his knowledge and expertise. However, our realtor keeps advising us to cut the price, and the list price is now less than the assessed value. Assuming that it will sell for less than the list price, it is highly likely that we are going to have to sell the house for less than what we paid for it two years ago, even though we have made a number of improvements. The reality that we are looking at right now is that we will lose the entire 20% down payment we made on the house, and probably have to pay a couple grand out of our pockets to get out of the house. Meanwhile, the realtor walks away with a nice chunk of change. If we could get out of our contract, we would consider selling it ourselves for a lesser price, just so we could walk away with a couple thousand dollars to help us cover our relocation expenses. Every time our realtor suggests another price adjustment, we can't help but think, "Yeah, you still get a paycheck, but that means more money out of our savings." - Sun Aug 24 2008, 10:16

Keith,

Thanks for the good info. I guess maybe the concern that I have had, but have not been able to articulate, is that I don't think our realtor is adequately marketing our house. We have made it clear that we are motivated sellers and would consider a variety of options - homeowners warranty, gift cards, lease options, etc. But he keeps telling us that none of those will work, and keeps telling us to reduce the price... which we have already done on three occasions, from the initial list price which HE recommended to us based on comparables, square footage, market trends, etc. Other houses in our neighborhood, of the same age and condition, are priced higher than ours. But many of them are offering incentives of some type. - Sun Aug 24 2008, 14:29