Help with House

October 1, 2008 7:29 AM

Under financial pressure. My house isn't selling. I want to avoid foreclosure and don't care about making a profit. It's the original mortgage; a 30-year fixed at 5.5% in good condition (attractive older house and well maintained) in a decent neighborhood (property values steady as those in more expensive neighborhoods fall).

If I price it only to pay off the mortgage and cover commissions, would it attract buyers? Doing so would drop its price 20% below comparables. This would undercut the neighborhood, but not like a foreclosure would. Advice?

posted by CollectiveMind to home & garden (7 comments total)

A) My house isn't selling.

B) property values steady as those in more expensive neighborhoods fall

If your house isn't selling then it may be because value isn't holding steady and you may have to face up to this.
Reducing the asking price would increase your changes of selling but no-one can really say whether the specific reduction you mention would be enough to guarantee a sale. It may be you could reduce it less and make a sale, it may be you would have to face a loss to ensure a sale, but this might still leave you better off. You need to talk to someone who knows your local market well to get a better idea of how much people are bringing their asking price down to guarantee sales.
posted by biffa at 7:41 AM on October 1, 2008

I lived in a similar neighborhood, from your description, and my house sold in 10 days while comps all around me took as much as a year to sell. Things to ask yourself and your agent (if you trust him/her--if not, find a new one):

1) Are people coming to look at it and then not buying? This could be a presentation/condition issue. Consider doing more repairs/touchups/staging. Not just painting and cleaning, either, but, say, a 5k repair/upgrade that you weren't considering before. Also, rent a roll-off dumpster and a storage unit and empty your house of at least 1/3 of the stuff in it now. It should look like an "after" shot for "This Old House" except without any clutter whatsoever.

2) Are people not even coming to look? This could be a pricing and/or marketing issue. Consider reducing by a big enough chunk to get more people in the door. Consider a professional photographer using a wide-angle lens for a full-color brochure left in the box outside. Also boost your curb appeal with potted plants and whatnot outside if you think marketing is part of the problem.

3) Did your broker do a brokers' open house? This is a great marketing tool, though rarely used in middle-class or blue-collar neighborhoods like the one I just sold in. However, a few brokers showed up at mine, and one of those represented the eventual buyer of my house.
posted by ImproviseOrDie at 7:58 AM on October 1, 2008 [2 favorites]

Look, if 'foreclosure' is on the table, it's time to get this thing sold.

Reduce the price to the absolute bare minimum you can. You're only fooling yourself thinking that the neighborhood is holding value.
posted by unixrat at 8:55 AM on October 1, 2008

Speaking to point #1, you might consider storing your extra stuff at friends/relative's places. Case in point, we have a considerable amount of my sister-in-law's stuff in our basement in an effort to make their house more presentable to buyers.
posted by mmascolino at 8:56 AM on October 1, 2008

Is selling at a loss an option? I mean, I'm sure there are people waiting for values to fall to zero, but is there a point when buyers realize, "This is as low as it's going?" Or am I looking for reason in the unreasonable?
posted by CollectiveMind at 10:59 AM on October 1, 2008

And when I say 'selling at a loss', I mean selling below the mortgage due and paying the difference. Is it sort-of the same thing in reverse when people buy a house and pay for a lower interest rate? I'm not desperate yet, but reviewing options.
posted by CollectiveMind at 11:03 AM on October 1, 2008

Is selling at a loss an option?
And when I say 'selling at a loss', I mean selling below the mortgage due and paying the difference.

Yes, but you will need to have some money on hand to pay off the mortgage. Otherwise it´s what´s known as a ¨short sale¨, which is more complex and will be avoided by some buyers.

I'm sure there are people waiting for values to fall to zero

Values aren´t going to fall to zero unless people have some other option of where to live that´s free. They might fall lower than you like, but they will not be at ¨zero¨.

Doing so would drop its price 20% below comparables.

If it´s really at 20% less than market value, it should sell quickly. This should be something you can discuss with your realtor, and they should be happy to have you drop the price in this way. If you can´t ask them about this or they insist that you not drop the price you need a new realtor.
posted by yohko at 12:37 PM on October 1, 2008