Is my mansion listed way too low?

20 Replies

I have a Dilemma.  Should I dramatically raise my price?  (Current list price $1,250,000.  Thinking of going to close to $2,000,000.)

I have a historical mansion for sale that's a flip project.  It's been on the market for a while now, and is currently listed at $1,250,000.  7,391 ft, 6 bed, 6 bath, 5 fireplaces.  New electric, plumbing, full house sound system, CAT5 and cable lines throughout, original light fixtures and features, new open concept kitchen, master bath, finished carriage house, sports bar in the basement, etc.  It's listed in the national and regional historical directories.  Previous sales history - In June 2008 my house sold for $1,425,000 (with an unfinished carriage house, small 90's kitchen that didn't fit the house style at all, and no master suite.  I have addressed all 3 of these issues.)  I am currently about to relist the property (the listing is expiring in a week.)  As I write this, I am having a radiant gas-powered 150ft heated driveway installed (it's a steep driveway that faces north) and I will be relisting this property in a week as soon as the new concrete is poured.

I'm wondering if I have it listed way too low, and if this could be a reason it hasn't sold yet.  Since June 2018, 2 homes of identical or smaller sq footage within a quarter mile of mine, built within 3 years of mine, sold for $1,900,000 and $1,800,000 (each was on the market for less than 2 months before selling.  Mine has been on the market for an entire year.)  Yesterday, a house even closer to mine but at only 5,004 sq ft listed for $1,700,000.  2 of those three homes are on my street (the most prominent/prestigious street in my city) and the other was on a side street just off from it.  Granted, mine has a steep driveway that up till this point was unheated, but I am currently addressing that problem.  There are other comps that reflect my price as well, but these 2 most recent ones sold the fastest, and were listed so far above.  

Is there anything to be said about dramatically raising my price close to $2 Million when I re-list my house?  It doesn't make any logical sense to me, but maybe I would appeal to a different buyer profile that almost prefers to buy the most expensive mansion on the street that they can find?  I would absolutely love to raise my price, but I don't want to shoot myself in the foot either, and just prolong the eventual sale.  Any thoughts?

@Mike V. Do you have a realtor ? If the answer is no that is one strike against you as people buying million dollar homes want to deal with realtors. My guess is there is something else your not stating about the property as to why it’s not selling as if other homes are $500k more and truly comps then something is up.

Yes, I am working with a realtor.  Also my main strike has been the steep unheated driveway (I'm guessing it would have sold by now if that hadn't been the case.)  A new heated driveway is being installed right now.

@Jonathan Woodruff - Is that island top stable?  It's doesn't seem the right scale for such a mammoth kitchen.
 I don't think I've ever seen such a skinny bottom with  that much overhang.  It at least needs some legs to stabilize it.  It also seems like the island should be down on the other end of the kitchen between the sink and the stove, where you would use it for prepping. I wouldn't want to set my heavy kitchen aid on the edge of that granite.   Personally I'd like to see more color. It's too much white on white for such a massive space.

Originally posted by @Jonathan Woodruff :

Yes, I am working with a realtor.  Also my main strike has been the steep unheated driveway (I'm guessing it would have sold by now if that hadn't been the case.)  A new heated driveway is being installed right now.

 What details aren't you sharing, and/or what has been the feedback that your listing agent got? There's either missing information, or there's funny business afoot, no way to know which.

If the heated driveway were all it was, and what you say about the comps was the whole story, then someone would have bought it for $1.25m and put their own heated driveway in...

In Silicon Valley most estates are also sold quickly. Asking price is often below the market. Offer is always over asked.

You need a third party appraiser to assess the realistic value. If you feel the asking price at 1.25M for awhile with zero offer, you need to decide if you wish to sell it, take it off until next year.  Good luck.

Sam Shueh 

Thanks for the feedback everyone!  I just mainly curious if there's such a thing as being underpriced in a luxury home market.  I'm an investor who typically is very logical, and my opening question is completely illogical.  I went out of the gate at what I thought was a conservative number.  But the recent comps that have sold quickly were way above any number that I would have considered to be reasonable.  With these recent comps, I've just been wondering if there could be anything to this bizarre and totally illogical thought of "am I just priced too low for some reason?  Would I attract a buyer by being at a higher price?"

@Chris Mason good point.  The driveway has by far been the biggest negative feedback.  But usually it's combined with one other thing ("we don't like the driveway and don't feel like it's a true 2 car garage."  or "driveway + not a great backyard space.")  The lot is steep, which is unfortunate.  I've probably made it onto 5 people's short lists, and have had about 40 showings (not sure how many of those were actually serious buyers, or just people wanting to see a historical house.)  People always say they absolutely love the house.  The ones that have been really interested don't like the driveway, or decide they want new construction or something.  The driveway is probably a 16% grade and faces north, and it definitely ices over and stays frozen if it's not cleared right away.

@Patti Robertson Thanks for the feedback!  I can definitely see how that island looks super weird from the picture I posted.  It's actually well supported and the cabinets don't stay that narrow the whole length. (I think the quartz only has a 10 in overhang at most.)  Here's a couple different pictures from a different angle.  And it's actually all kind of a creamy color - the white balance in that picture is kind of off I'd say and makes it look whiter than it actually is.  But you're right, it's still a very light kitchen.

@Jonathan Woodruff speaking only for myself, one thing that drives me nuts is people who are typically drawn to the charm and unique qualities of an old home, and then whine about its lack of modernity--- modernity which, by the way, will likely fall out of favor again in a decade or less. That said, let's talk about the alleged sticking points: a heated drive in a colder climate is DEFINITELY attractive (...says my aging but stubborn snow-shoveling body in New England.) What's your cost and return on that installation alone, according to your realtor? Garage is too small. Guess what? It's an old home. Two cars WAS extravagant luxury. My question for you is (1) are the historical concerns so burdensome that an incoming owner couldn't expand the garage themselves if they truly wished? Is it a carriage house as opposed to a garage, and/or is there enough room to incorporate another structure on site, namely, a 3-4 car 'modern' monstrosity? I'd like to hear more about the layout including whether its attached or not. Sometimes, a historic or period home JUST needs to meet the right buyer. At that point, you're right-- price among those levels of shoppers is immaterial. But to find that person, you need to make sure the Broker has his/her eyes set on the "charm" and spin the garage into the historical artifact that it is, as opposed to a detriment to the market and neighborhood. Direct him/her to use more synonyms, as opposed to more excuses. Good luck, Proud owner--and restorer-- of a 1913 American Foursquare. With carriage house, detached.

Updated over 2 years ago

I now see the pics-- not on my phone. BEAUTIFUL home. That's a carriage house, not a garage :-) Use the term if your'e not already-- that'll attract some of the right buyers. The "not really a 2 car garage" comment probably comes from the non-standard size of the door, as opposed to the size of the structure itself. Mine is similarly situated. If you NEED that 2 car garage in your market, see what a solid contractor can do about simply giving it a standard-sized door. It'll take engineering, replacement of the headers, and some TLC because of the brick, but it should be feasible, from the view we have. Post some more pics! and seriously-- gorgeous property!!!

@Jonathan Woodruff    Not enough information yet.

Are you selling it yourself or through a Realtor? If you're a FSBO, it's possible that your marketing isn't up to snuff. Or that you're missing something in the comps you shared. Or some key feature of your house. Or other local conditions.

Here in MA, our prices are about equal or slightly over the peak before the big crash.  In Plymouth County, that was Q1 2016.  If that's true where you are, you should be priced well above the 2008 price, considering the improvements you've made.

Time did a piece on how the founder of ForSaleByOwner.com tried to sell his Manhattan condo on his own.  He finally gave it to a Realtor who raised the price by $150,000 and sold it quickly.

http://business.time.com/2011/08/17/fsbo-com-found...

It's counter-intuitive to think that you've listed it $750,000 below market value and it hasn't sold though.  I'd consider finding a luxury Realtor and paying him for an evaluation of your home vs the others on the market.  

And I'd strongly recommend hiring him to sell your home.

Its a bold move to raise the price.  Ive done it twice and it worked. However Ive never raised the price $750k. 

What is the liquidity of your market? In marketa of high liquidity, by under pircing a property, the market will self correct upwards by eliciting multiples offers and bidding the property up to the market value of the property.

So if your market has high liquidity, raising the price is not the answer. Raising the price is only going to work if the marketing of the property was bad, and you have now improved the marketing.

my experince is that steep postive grades and steep negative grade properties are very difficult to sell..  unless it sits on acreage type setting ... 

is this in Spokane ?? how many 2 mil houses sell in that market.. ? I would run MLS stats and see how many in a year sell all together that are on the same size lots.. Not big ranch type property.

I know in Portland you get 2 mil and over and the market constricts tremendously. 

either way that was a bold move taking on that house thats for sure..  if worse comes to worse can you just move in and enjoy your great rehab work and just live there.. ???

@Jonathan Woodruff Does your agent have experience selling homes in your price range? If she does not have recent experience she may not have the right contacts to bring in that caliber of buyers. You could consider calling the agent whom sold the 2 million dollar homes in your area and having him or her come out to evaluate your home and make their sales pitch. If you like what he or she says perhaps switch agents. It may also be helpful to take it off the market until the driveway is completed. Then put it back on the market which will cause it to come up again on searches as a new property for sale and it may attract new attention. Be sure to emphasize the heated driveway in your new listings. This downtime could also be an opportunity to switch agents

I noticed by finding your listing that you originally listed at $1.2 mil. Dropped to $1.185 mil, then to $1.15mil before raising it up to $1.25mil. Is your realtor the one making the calls on initial list price, lowering the price and now possibly raising the price by $750k? The property seems hardly usable, as it is surrounded by driveway (looks that way from the listing) and you can also see in your photo of the two cars in the garage, they had to be parked at an angle to fit in the door (that isn't really a 2 car garage in my opinion).

Did these $1.7-1.9 mil comps have the same short falls? If so, maybe it's worth that. If not... these can be significant issues that can't be overcome (being historical).

You mentioned a steep driveway. That is a huge deterrent especially in an area that might get  a lot of cold weather and snow.

There is a much smaller pool of buyers for houses with steep grades. I can't tell from the pictures but it looks like the garage is detached from the rest of the house. If that's the case in the winter a huge negative. Is there any useable back yard? It looks flat with concrete but can't see any backyard. If you have steep driveway and little to no backyard then many families will not like that at all.

When you bought you might not have done enough analysis on other components of the land. When I used to do thousands of BPO's you would look at the land, the shape of it, the slope of it, how much was useable versus un useable. If you look at the other properties that sold for higher amounts there has to be differentiators that made them sell for the higher pricing. The remodel you did  looks nice and outside detail looks appealing.  

I haven't seen a reply yet speaking to the historical listing prices - When I'm looking at properties I definitely check out what it has been listed for and sold in the last few years on Realtor.com (or any of the MLS aggregators). If there are dramatic or weird pricing jumps (down or up) it definitely causes some pause- I start to wonder why the prices is jumping and if there are other strange issues with the property. It also may come across as greedy. I would not move the needle up $750k, at the risk of needing to move it back down again if nobody bites. Clearly, if you've had 40 showings and 5 short listed buyers but no offers, you're missing something. What have the potential buyers said? It can't just be the driveway?!

I’m also from Spokane- what street is your property on? It looks like a Rockwood home, but I don’t recognize it (I live on Highland BLVD in Rockwood).

The realtor is also Key- have they marketed high end homes in Rockwood before? 

Good luck!