BiggerPockets

Hello all. I have had a 4br/2.5ba house on the market since 10/09 with no offers. I originally had it offered through an agent who basically just stuck a sign in the yard and put it on the mls. I had about 15 people see the house but no offers. The house needs to be updated but all in all is in pretty good shape. I am now trying to do an fsbo with not a whole lot of luck. I am in desperate need of selling this house fast because of my wife's recent job loss and if she doesn't find a new one fast we will start falling behind on payments. Here is some of the details about what I have had it listed for and a strategy I have tried:

1. I had the property listed with an agent for $139900 and then reduced to 136900 and now with an fsbo at $133900. I am a little bit more room to go down but not much
2. I have also placed ads for a two year lease option for $139900 with $5000-$6500 option money and $1050 a month with $250-$350 a month credit but with no luck so far. Market rent in the area for this house is about $850 a month.

I really am just looking for some guidance and believe that this is the best place for it. What kinds of low cost no cost marketing works the best? How should I word the ad? Am I going about this the right way or not? Is there any other strategies that could help me out? Any advice would be appreciated.

Thank you,
Carlos

What's it really worth? What you owe or what you want is totally irrelevant. You need to know what its worth. Are there current listings for similar houses nearby? What are those listed at? What have recent comparable sales brought? You need to figure out what it would bring if it were updated, based on recent sales of fixed up, comparable houses. The current listings are your competition, and you have to be better than them. The absolute most you can expect to get is the price for comparable sales, less the cost to update it. In reality, Don is right. Even an owner occupant is going to want a discount from that price in exchange for having to do the work. An investor is going to demand a steep discount.

You also need to realistically consider the "needs updating". That could be anything from "it needs new paint and carpet" to "the baths and cabinets are from 1950 (or 1970)." If its realistically the latter, your probably not going to get an owner occupant unless there is nothing else available. Owner occupants will want something move in ready and up-to-date. If its really out of date, investor type pricing will apply. The rule of thumb there is to figure out the fixed up price, multiple that by 70%, then subtract the cost of repairs.

What else is available? Are there lots of other houses that are in better shape? Or, is this the only thing available.

Ultimately, its all a matter of price. If you're getting showings, and no offers, its priced too high. If its well advertised (it better be on the MLS, even for a FSBO), and you're getting no showings, its overpriced.

If you are getting showings, what's the feedback?

Also what kind of advice do you guys have for marekting an FSBO

Hi Carlos, the short answer is that you are asking too much for the home. Sorry to say, if you've had potential buyers view the property without making offers, it's a pretty good indication that this may be the problem. Price is the number one reason for a home that doesn't sell.

Very simple concept: Price reduction.

Buyers will pay for what they think its worth.

Sellers will sell for what they want the worth to be.

I understand that you have had a bad agent, but you need to hire a good agent because 80% of your buyer are working with agents

So, it sounds like similar homes in similar condition have sold for $130K. Smaller, you say, but same beds and baths? Similar amount of work needed? Sales a "few miles" away aren't good comps unless you're out in the country and houses are far apart, so you have to ignore those. A sale a year ago is too old.

Not sure where you're getting your comp data. If its from the county, or a source like zillow that gets data from the county, it won't include concession data. Its very common in the current market for sellers to give buyers concessions. Typically around 3%. If you are getting the sold data from the MLS, it should include that. It doesn't affect your listing price, but will affect your bottom line.

There should be "flat fee listing" agencies in your area. Try googling that term and your city or county and state. They will charge you a flat fee, a few hundred, and put the house on the MLS. They typically don't do anything else. You might be able to get them to pull some comps out of the MLS, if you don't have that data.

One thing to consider is that $8000 tax credit. Anything that sold recently is probably eligible for the tax credit. Other members here are reporting very significant slowdowns in sales activity since the credit expired at the end of May. Anything that went under contract before the end of May is effectively $8000 cheaper than the sale price because of the tax credit.

Again, the amount you need to payoff the loan is absolutely irrelevant in setting the price and accepting an offer. Buyers will compare your house to others they could buy and just don't care at all about what you owe. You probably realize you will have closing costs that amount to about 3% of the sales price, mostly title insurance for the buyer and the tax prorations. You're likely to have to give some concessions. If you seriously need to sell soon, you're going to have to get it priced to be the best deal in the area. That means underpricing the competition. I would strongly recommend you find an agent, get them to help you price it right, go see all the current listings in your area, and get it on the MLS. Most buyer's find their houses on the MLS, for better or worse. If yours isn't there, most buyers don't even see it.

Sorry to be the bearer of bad news.

Let me also ask if you've done all the basics. Have you dejunked and put half your furniture and most of your personal items into storage? Does the place look like people are living there or does it look like a design magazine? Have you painted? All your pictures and knick-knacks gone? Does it smell good? Pets gone? How's the curb appeal? Nicely landscapped and grass mowed? No peeling paint or anything like that out front?

I realize its your house, and a huge pain to dejunk and make it look like a magazine. But that also makes a difference. Ever noticed how an empty house looks huge, and one that's full of stuff looks small? Especially if you actually have something that is smallish and you've managed to wedge in what you need. Lookers will notice that and think "too small". If you've not done it, thoroughly dejunk, clean and paint. Paint is cheap, and a fresh coat makes a big difference. One of the things to consider when looking at the other houses is just the overall feel. Don't fall into the trap of "yeah, but our is better in such and such a way". Buyer's don't love your house, at least not at first. Don't know if you ever watch those H&G TV shows where they try to sell houses, but the situations are almost the same from show to show. The seller is shown comps and the differences are pointed out, and all you hear is "yeah, but...". The sellers come up with reasons why their house is better. The buyer's won't do that. The sellers house is messy and full of furniture, personal items, toys, pets, whatever. They say "its just too much work to get rid of that stuff". What I hear is "we're willing to sell for less rather than clean up". But then I also hear "WE love our house and think its wonderful, so we want a premium price." So the net is "we just don't want to be bothered with selling."

The absolute best way to get top dollar for your property is to offer Lease to Own. The buyers are in a much weaker position to negotiate. You may be asking for too much down if you are not getting any response to a Lease to Own add.

We owned a house in Little Rock in the late 80s, bought with seller financing, a retiree wanting her monthly check. It was a fixer at purchase and after rehab was really a beautiful home in a desirable part of town.

The house was listed with a few different realtors for over a YEAR. They loved doing open houses because they got leads but couldn't sell ours. Try having your house spotless for a year with 2 small children.

After the last listing agreement expired, we took a look at our mortgage and realized it was an assumable loan. Duh!

Ran an ad in the newspaper saying the loan was assumable and our phone rang off the hook. Most of the callers had already previewed our home many months ago, loved it, but couldn't qualify for a new loan. Sound familiar?

Doctors, golf pros, airline pilots, recently divorced professionals with ruined credit started a bidding war.

As Jon advised, make it pretty or expect to take a loss and with a little bit of savvy you can market it yourself. The money you save on commission can be used to update the home.

Biggest help is the little things. Stage the house. Rent a storage space and take EVERYTHING you can there even if you need it next week. Take all the cute pics off the fridge and family pics from everywhere. You will be basically 75% moved out when it is decluttered enough.

Paint neatly everything in site,,even the cabinets if the finish is worn. take appliances off counter. Wipe the dirt and 20 years of grime off the water heater and furnace,,,they LOOK newer and better.

Buy new carpet if stains show. You can make a house shine for little money,,,watch the shows on TV that explain the concept,,namely HGTV.

If YOU dont spend a few dollars sprucing and neutralizing the buyers will subtract 10 bucks or more for each of your dollars spent.

Its a cost of doing business these days.