Eric and Amanda Reynolds put their 3-bedroom, newly renovated Hollywood Hills home, on the market in January, sure that buyers would appreciate its proximity to the beach, large lot, and impeccable decor and landscaping. But after nine months—and a price cut from $379,000 to $250,000—the house is still on the market, with the couple looking at a substantial loss at that price. “We fell in love with the house from the moment we saw it, and we don’t know why other people aren’t doing the same,” Eric Reynolds said. “We’re so confused and confounded about the whole thing.”
These are tough days for sellers. Sales have plunged at least 20% from last year’s numbers, following the expiration of a federal tax credit for home buyers, and hopefully the real estate market is headed out of a traditionally slow season. l wonder that sellers feel discouraged and disappointed.
The usual prescription for a house that won’t sell is simple: Cut the price. “If the seller allows you to price it right, it goes,” said Ron Yaks Sales District Manager for the Keyes Company said.
But many sellers can’t stomach that thought. If they bought within the past few years, they may have mortgages bigger than the amount they could get for the house. They can’t believe that their house could be worth 40 percent less than what their neighbor got a few years ago and there’s one sentence that real estate agents hear over and over: “I’m not giving my house away.” It seems no matter what a person bought their home for, they do not feel in this economy they are getting the real value for their home and sellers have to deal with buyers who feel they have the upper hand. Buyers ask for lower prices, even if the price has already been cut. After a home is inspected, buyers will push sellers to correct even minor problems. Moreover, buyers are in no rush to make an offer. “They’re worried about their jobs,” said another realtor in the office “People are looking at houses, but they won’t buy.” “Buyers keep thinking there’s going to be a better deal around the corner”.
“The buyer population out there wants it for nothing, and they want all the bling,” said Kathleen, a CPA who put her four-bedroom, 52-year-old home in Hollywood Lakes, on the market last February, asking $625,000. She expected it to sell quickly because of the location East of US-1 near Ft. Lauderdale and Miami. But although she has dropped the price to $425,000, she has not found a buyer. Kathleen has not updated her house with all the extras some buyers seem to expect—whirlpool tubs in the bathroom, granite countertops in the kitchen. But she thinks they wouldn’t be happy anyway: “I’m convinced that even if I had granite countertops, they’d say, ‘You have gray—I wanted brown.’ She has seen nearby properties go for $200,000 or more off their listing price. She figures those sellers may be under pressure to sell because of job losses or trouble paying the mortgage. She is not in that position, but the distressed sales are hurting the value of her property, she said. “I have a sense that people are holding back to see how much lower things will go,” Kathleen said. “It’s a waiting game. Your property is really worth what someone is willing to pay for it, but I’m not going to give it away. I’ve done everything I can and when it’s still not working, what am I supposed to do? Manufacture a buyer? “It’s a very frustrating market right now, and I’m really not hopeful until I see an uptick in employment,” she continued. “I don’t expect to sell the house anytime soon.”
Agents often remind sellers that the lower price they get when they sell will be offset by the lower price they will pay on the next property. That’s the attitude of the Spiegelman family, who has signed a contract to sell their 3 bedroom with pool Hollywood Hills home. They’re selling for less than what they’ve expected to sell, including the 2009 purchase price and the cost of extensive renovations. A Hollywood general contractor said he is looking for another house to improve. In the current market, he expects to find some attractive deals. “This market is going to work to our benefit on the buy side this time,” he said. Unfortunately, many sellers find it tough to keep that in mind when a buyer is low-balling them. Some sellers face unusual challenges beyond the market climate.
Contact me if you’re looking to get the most money for your home. I will sit down with you and together we can analyze current market conditions and work on the right marketing strategy for your home.