- April 28, 2024
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I’ve heard the question dozens of times: “Mine is the lowest priced home in our neighborhood. Why doesn’t it sell?” I respond that it’s probably because the house is simply the least overpriced home in the neighborhood.
The real question should be, “How well is my home priced relative to the selling price of similar homes in my neighborhood that have actually sold?” The selling price will be the one that a buyer (you only need one) thinks is right. The best way to determine what that price will be is to look closely at sales of similar properties.
I remember several years ago, during the boom times, when I did a listing presentation for the owners of a very nice home in a gated community. Their home had been a furnished builder model for two years before they moved in. They had lived in the home only a few months before deciding they had made a mistake. They were selling the home completely furnished and returning to their home town.
During my presentation, I showed the recent sale prices of comparable properties in the area. I also pointed out that the same builder that had built the home had just finished a new model (same plan plus a few improvements) just around the corner. The builder’s price for the new furnished model was $499,000.
I showed that the builder’s price was in line with recent area sales. It also sported a few new features, and the furniture and appliances were new. On the other hand, the sellers’ home was available immediately while the builder’s model was being sold with a two-year lease back. My suggested listing price was $490,000, slightly lower than that of the new model.
I didn’t get the listing. Why? The sellers found an agent who would list their house for $699,000. The sellers actually believed that someone might come along and pay $200,000 more for their home than the newer model home just around the corner. Well, their house sat on the market for months as the price was lowered several times. Such unrealistic pricing effectively takes the property off the market.
I call such listings FSBOs — For Sale By Optimist. They can be found at every segment of the market.
Four of 32 Cypress Knoll homes on the Multiple Listing Service are listed between $350,000 and $384,000. Yet none of the 41 homes sold in that community this year have fetched as much as $300,000.
Two of four available Hammock Beach one-bedroom condos are listed for $298,000 and $299,000 respectively — more than twice recent selling prices.
Two Conservatory lots are listed respectively at $135,900 and $142,500. Conservatory lots are selling again, but only at prices well below $30,000.
