Lowering the sales price in a good market?

Question

My partners and I built a spec home(our 1st deal) and it had two appraisals at $700k.

After 3.5 months, no one had shown interest in the property.  We dropped it from 720k to 650k
And now after 4.5 months, our RE broker wants to reduce it more.  One of my partners agrees.  I don't trust his judgement.  This would mean making hardly any profit.

The property is in western Washington; rural area; waterfront; 3500 sf; the market is still going up in price, though sales are slowing.  There may not be a bubble here to burst.

What's the lowest percentage we should go below the appraisal?

Account Closed · Answer

Re: the rhodies. Buy a copy of Capital Press, and in the classified, there will be a nursery section where you will find where you buy plants 100 at a time at whoelsale prices. You could use 100 of them.

Also, BiMart sells the best bareroot fruit trees. Put in 2-3, each a diferent kind, on one corner of the property. "family fruit orchard" helps to get lookers for a country place, and you need every scrap of help you can get.

Account Closed · Answer

In Washington and Oregon, traditionally, the buyers aren't out looking in the winter. So until your weather warms up and dries out, it doesn't matter what the price is.

I'd emphasis the river a little more strongly. Is there fishing right out of your own yard? Enough water for canoeing or boating?

The only thing about the house that bothers me is that the entry seems very plain, almost like the entry was never finished. Just a suggestion: look up what a $700,000 house looks like from the outside in Bend Oregon. That's a target buyer here and the builders know how to rope them in.

You aren't in my market, so I don't know how your price is. It could be price. It could be that you aren't getting the exposure that you need (bad choice of real estate agent). It could be that the folks who want to buy your house can't get their own house sold.

I think the kitchen is fine. You can't have "too much wood" in Washington and Oregon. But the kitchen could use some sort of bright accent: fruit bowl, flowers, bright cannisters. Not big, but bright.

Is that carpet green? Green is not a good choice of color for carpeting, but I doubt that it would stop anyone from buying the house if they like everything else about it.

In Western WA, I'd have the boundaries of the property covered in rhodies and azaleas. Spring is soon here and flowers really help you sell, and buyers love flowers that they never have to take care of.

Bob McIntosh · Answer

Here are some crazy ideas that i have seen working in some rural areas near where I grew up...

Offer something with the house... if you are on a river throw in a boat, or a 4 wheeler, or hell even a car...

It doesn't have to be something expensive (except for maybe the car) but it may entice people to at least come look at the place and that's a start...

Matt Mathews · Answer

Another perspective from a Buyer Agent/Investor.  Forget about price for a moment.  Who is your target market Buyer?  You have a somewhat unique property with special features.  The buyer I would bring to see your home would be pre-post Retirement.  2nd home buyer looking for perhaps a future Retirement home.  A vacation property for Rental/Tax write-off.  The MLS listing should also be put into Vacation, Rental Property etc.  How about offering Great Terms. Seller financing or Lease Option etc.  Put the Video on a few International buyer sites.  Think outside the box.  Your agent sure isn't!!!!

Matt Mathews
Mathews Associates
Investment Prop. Advisor
Exclusive Buyer Agent

Gary Smith · Answer

Thanks for all the input.

But I want to correct some things:

A RE broker I know said we should make a video, and no one dissuaded me from doing it.  But our current agent doesn't want to use the video.  
I'm not a RE agent.  I don't know how to incorporate a video into marketing.

Bart Pair · Answer

Let me start off by saying I don't know what $615,000 will get you in Cape Cod, but here are my impressions.

1. The outside of the house is very plain - front and back.
2.  From the video, it looks like the house is really about 2,000 square feet of usable space with the extra 1,500 coming from a revamped open attic space with no real purpose.  This could be affecting the validity of the comps you are using.
3.  The bedrooms seems small for a 3,500 sq. ft house.
4.  The kitchen is nice, so is the fire place.  Best parts of the house by far.
5.  The biggest selling points are the river and the acreage not the house.  Any selling should emphasize those.
6.  TBH, the video doesn't sell well.  There is no sound telling me about specific features and there are times I am not even sure what rooms I am looking at (did you show the master bedroom?)

Don't expect people to recognize what is great about this house from some pictures or a video.  You have to tell them either by speaking in the video or putting it in writing somewhere.

Jenny F. · Answer

exactly.

Jenny F. · Answer

ok.  i looked at your video and here is MHO on your property.

1- Dont put up the video.  You want people to actually come and see the home and I think you should only post the best features of the property.
2- The front steps look like you are going to trip up going into the house. I would not even show the front entry.  It is cold, uninviting and again, it looks dangerous.  I would fix it by either adding some sort of front entry way or a small pergola or something.  add some taller, more to scale and COLORFUL plants in the front and rear.  The outside of the house looks unfinished.
3- skip the corn field intro on the video. 
4- The focal point of your LR SHOULD be the fireplace!!! It is currently the 13 inch TV.  Get rid of the TV, stage some chairs in front of the fireplace and leave the rest open for view of the river. (if there is a view of the river)
5- Put some curtains on the windows to make the whole space pop.
6- Take some pictures with better lighting...(during the day is good)(ditch the naked lady lamp)
7- take all of the tv's out.
8- The kitchen is VERY heavy with wood.  wood cabinets, wood floors, wood doors......are the other comps featuring granite countertops?  If i were paying that much for a house, it had better have granite!
9- get rid of the white contraption on the counter and replace with some colorful fresh flowers.  right now the whole kitchen is BROWN....
10- Start marketing your place!  post your ads at the grocery store, gas station, talk to people!

Good luck!

Gary Smith · Answer

It is on the MLS, but no showings.  We almost had one; they didn't show up.

The market has slowed, but there were some comps that sold.  Maybe one big problem is the area is rural, so it's more unique.  It's tough to get comps that are similar (no cape cods, acreage varies alot).  And the upstairs is one big room that can be turned into whatever the owner wants to do with it.  I've wondered if that's a negative.

I heard you can post listings at Realtor.com.  I signed up but can't see how to put up a listing.

Jon Holdman · Answer

If you're not getting anyone to even look, then it seems overpriced.  Is nothing selling in the area?  If anything is selling, what price ranges are moving?  How do those compare to yours?  Is the MLS the main method of marketing in your area or are there other channels (craigslist, local papers, ???)?

What's your agent's feedback?  Why does he or she think there have been no showings?  Is your agent experienced in this type of house and this area or is he/she a rookie who's sold one condo 100 miles away but is someone's friend?

Seems like either one of two things is keeping you from getting showings.  Either nobody knows about the property, or people know, but they all think its a bad deal.  Might be a combination if its outside the typical range for this area, and so its not falling into anyone's searches.

I doubt the big room is the problem.  If you had showings, and the feedback indicated that was a problem, I might be concerned.  You're not to that point, though.

If its on the MLS it should be on realtor.com.  If it doesn't show up there, something is wrong with your listing.  Get your agent to fix it.

Does it show up as for sale on trulia and zillow?  I believe you can mark it as for sale yourself on zillow.

If this is an area of luxury houses, maybe you need some specialized marketing.  Maybe a nice ad in the newspaper that serves your potential buyers.

Jon