Home Selling in Cave Creek>Question Details

Kit Williams, Home Buyer in Arizona

How much of a loss is too much? I paid $665,000 for a house had to pay an additional $40,000 to fix the foundation & other issues. I have it on

Asked by Kit Williams, Arizona Wed Mar 23, 2011

the m market for $520,000 currently. My Realtor's only suggestion is to continue to drop the price. It is paid for out right, but no one lives in it. I tried to rent it and spent more money fixing it after the renter left than the whole time they were there. It has been on the market 18 months now...

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7
What it really comes down too, is "how much of a loss is too much for YOU to handle". No one else can or should answer that for you. I am a third generation Realtor, my mother did property managment for 25 years and that is the thing people dont realize when they say "oh I will just rent it out", it is not that easy. A lot of time, renting out even one property can be a full time job, and the owner can end up losing money as well. I feel for you and you are in a big boat as I have read something like 70% of Americans are up-side-down on their primary residence.

I know lowering the price seems like the chicken #$$% out of it, but honestly, your agent/Realtor is probably right. It also depends on where you are at in Arizona, not all areas have decreased the same. For example, we here in Tucson were not hit as hard as Phoenix and the surrounding cities.

Please consider speaking with a CPA (for any tax benifits of holding or selling) and a financial consultant but in the end, only you know or can decide "how much of a loss is too much".

Best of luck.
Spirit
1 vote Thank Flag Link Fri Mar 25, 2011
You should really speak with you accountant about this since they will be able to tell you how this will impact your financial situation--especially your taxes.
0 votes Thank Flag Link Thu Jan 1, 2015
Kit- The market determines what a home is worth; only you can determine how much of a loss is too much to bear. Since the home is paid for, you may be in a position to offer a unique selling proposition (a lease/purchase, owner financing, or a land contract) that might attract a buyer. Review current comparables with your Realtor to see if the home is appropriately priced for the market. If price is ok, consult with professionals about staging the home and/or improving curb appeal. Appearance and condition are just as important to Buyers in this market as price. Good luck!
0 votes Thank Flag Link Wed Mar 23, 2011
Kit,
I've never heard a buyer ask, "How much should the seller lose before it's a good deal?" They often ask, "How low can we get it for?" At the time they are asking this question, they have a level of interest in buying. As Meredith asks, what are your objectives?
If it's to recover a certain dollar amount out of the sale, the buyer doesn't know or care about that they only want to buy a house at what they determine is a fair or good deal.
If your objective is to get it sold quickly and move on, pricing may be the key.
Before I ask a seller to consider a price drop though, I have several steps I go through to make sure it's the logical step.
Is your home the best marketed, easiest to show, most attractively staged home in its price category? Comparing yours to your sold competition, why did they sell and yours didn't? Is there anything about your property that can be changed for significantly less than the next price drop? I once suggested to a client that we spend $2000 for carpet or drop the price $10,000. They did the carpet and had an offer in 10 days. Another seller who didn't use my services wouldn't paint their interior. They liked purple and felt the next buyer would too or wouldn't be put off by painting. Enough buyers were that they sat on the market for months, dropping the price numerous times and finally after repainting got an offer.
Fix anything about the house holding back buyers. Have your agent fix anything about the marketing that isn't drawing in showings and finally price it to be compelling if you want to make it go away.
0 votes Thank Flag Link Wed Mar 23, 2011
If you need, are ready and want to sell, do adjust your price accordingly in order to be competitive with other listed area homes--as for how much of a loss is too much, unfortunately an answer only you can give....
0 votes Thank Flag Link Wed Mar 23, 2011
If your Realtor has no other ideas other than lowering the asking price, you may want to ask for some different opinions from other qualified sources, before deciding what to do next.
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Wed Mar 23, 2011
Depends on your objectives. There is no measure for too much of a loss. It's worth exactly what someone will pay you for it. If it has been on the market that long - then it's one of two things: Either the buyers moving through your market didn't find it of value at the asking price; or the buyers didn't know it was for sale.

Ask your Realtor for recent comps in the area - pay close attention to SOLD properties - those are the ones people have actually opened their wallets for. What made them choose others in your price range? Is anything selling in the area in your price range? Price your property so it is the best deal on the market among the competition. Be as honest and as brutal as you can and don't take it personally! The market doesn't care how much you paid for it or what your losses are. Prep yourself for worst possible case - there is a price that you won't go below under any circumstances. If the comps show that that's where you'd have to sell it, then you are probably better off renting for now.

Good luck!
0 votes Thank Flag Link Wed Mar 23, 2011
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