Thanks to you both. @lizard The primary home is on its second Realtor. I am certain it was appraised but now I wonder if how old the appraisal was. I will check. I have less confidence in the realtor for the beach property. We (the kids) think the unit needs updating, refreshing etc and he claims he has priced it appropriately for its condition. But when I look at other units at the same price point, they look better and therefore seem to be a better value. (No one gives much advice about this one because everyone likes have a free place to stay at the beach.)
@emeraldkity4 I think their expectations are part of the problem. They loved these properties and therefore they think they should be easy to sell. When I was with them a few weeks ago (at the beach), they remarked that they thought the condo would sell the first week. So hard.
Their reactions are somewhat surprising to us all as he was in real estate his entire professional career and my mother in law comes from a family that has done extremely well investing in real estate. She use to be quite savvy. They don’t really need the $ but the house comes with a fair amount of carry (large lot and pool that need to be maintained, extra ins cause it is empty) and it just needs to sell.
Have you had a bank appraisal done on both properties? This is different than the realtor appraisals. It may be a very good investment to have done. The beach condo will not sell if not updated due to the number of competing updated properties on the market. Remove drapes, carpet, have someone updated tile and put in Ikea kitchen and bath, new paint. With the house, have you offered a home warranty or a year of pool service?
Even real estate professionals can be unrealistic when it comes to their own properties, particularly a family home where there is an emotional connection.
IME, bank appraisers are no more adept at hitting a good market valuation than experienced RE agents, so I would not pay for any appraisals unless they’re required to get the sellers to agree to new prices.
I would do cosmetic updates on the condo that could be accomplished in a few days then relist at a lower price. If a meaningful price reduction doesn’t bring an offer by the end of this month, I’d consider taking it off to do more extensive work such as ECmotherx2 suggested (the Ikea kitchen, for example.) However, even after investing in a new kitchen, new floors, etc., it may still be necessary to lower the price. Your inlaws might prefer to sell as-is at a price that makes it clear it’s ready for the new owner to put his own stamp on it. Maybe the agent can promote it to potential buyers by suggesting they not pay for someone else’s taste in updates but rather enjoy choosing their own flooring, cabinets, fixtures, etc. in order to personalize the condo.
I’ll be interested to learn what happens with the house. I’ve seen large houses linger on the market in our metro area for 18 - 24 months, despite significant price reductions, with a few waiting as long as 5 years for a buyer. The recent sales prices here aren’t any better than during 2008 - 2011. Compared to prices in 2002 - 2007, many houses bought for $1MM - $2MM have sold for 30% - 60% discounts in the past few years. The really high end (for our area) has taken a bigger hit. A few houses that cost >$6MM to build have since sold for $1.3MM - $2.4MM after multiple price reductions.
In a nearby small town, sellers we know priced their house at $800K over a year ago. It’s now <$650K and they still don’t have any offers. It’s the second most expensive house in their market. My guess is that it will have to be reduced to $499K to get any serious attention. That’s what they paid in 2005, before they spent $200K+ on redecorating and adding a pool.
It can be difficult to persuade sellers that what they paid for a house has nothing to do with its current market value. I understand the concept of sunk cost, but it’s still hard to face how great a loss we’ll realize when we sell. We’re trying to focus more on lifestyle improvements instead of the money, but it’s not always easy.
If you can take a few harsh comments you might consider posting links to the listings on the GardenWeb/Houzz buying & selling forum to solicit feedback. Often posters will offer helpful suggestions on both presentation and pricing.
When my mother was selling her condo in the middle of a down market in 2010, my husband refreshed the bathrooms with new vanities (sinks and granite tops), lighting, and laid new flooring. Everything was painted, carpets cleaned, etc. The listing agent staged the place and it sold in a couple of weeks. Everything else in the 1970s-era complex that was on the market continued to languish for months.
$7K made all the difference.
Insofar as your house in the small Southern town, be aware that there just isn’t a market at all for houses in some towns. In my hometown a nicely restored 2,900 square foot home just sold for $50,000 on Homepath, after being on there for months (it was a foreclosure, but well advertised and listed). A 4,000 square foot home with pretty good historical significance, recently sold for about $95,000. I would guess that the prior owners had about $700,000 in it, and it was perfectly restored.
Even people with reasonably good credit are having trouble getting financing these days. You might be able to offer owner financing and get a higher price. Of course, this has its own risks! I doubt things will get better, so just sell the thing.
By the way, concerning real estate in general, some of the areas that were booming back in 2007 have seen quite a bit of home building over the past three or four years. There was a huge overhang of subdivision lots, many of which were foreclosed on, but these lots are being used up. Virtually no new developments are being created because the banks won’t finance them. So in booming areas this is going to put an upward pressure on house prices.
The dead areas, meanwhile, remain deader than ever.
So I have to give an update. D1 closed on her first real estate purchase. It ended up being a coop on the UES of Manhatten. She is only 27, so I am very proud that she was able to deal with all of the stuff related to getting a mortgage, interviewing with a coop board, dealing with a lawyer ( and finding a mistake by him btw) and real estate agents w/o any help from parents in anything. She is now dealing with contractors, architects, etc. to do some work on the apartment.
OMG, I was not doing this at 27. I know this is a different generation, and need to be. But I am still wowed at my 27 yr old D buying Manhatten real estate.
Yippee for your D, @Morrismm! That’s excellent! Our S was contemplating buying something but he’s not sure where he wants to live for an extended period of time, so we suggested he wait until he’s pretty sure he wants to live in the same location for 5+ years, at least. I honestly thing he’ll be heading to the West Coast when he finds a good job opening, but who knows?
It is so wonderful to see, isn’t it? I imagine you had a bit to do with her confidence to tackle such an adventure at 27!
And not just any real estate but NYC. WOW.
Today will (hopefully) be our sons closing on his first house, small single family in northern NJ.
First home fell through in March so it’s been a trek for him. Fingers crossed it all happens.
The amount of papers/disclosures/amendments required in nj real estate are insane.
@morrismm and @musicmom, congratulations to your kiddos on their RE purchases. Isn’t it a great feeling to see your children handling such adult responsibilities? For me it’s been a happy mix of feeling proud, relieved, thankful and excited for them.
The house is now rented. Less than ideal, but they are using a management company so no day to day worries. It is much better than having it sit empty. The good news is that couple renting it has located to the area because of family and will likely be making the move permanent. Fingers crossed, because if they decide to stay they may very well buy the house. The rent covers the carrying costs, which aren’t insignificant because of the size of the yard and the pool, but it is just a relief to not have it empty.
The condo is more problematic. One of the last realtors to show it gave a really honest assessment about the condition of the unit (and this after someone spent a day of their vacation cleaning, freshening, etc). My husband believes that the current realtor is/was afraid to be honest about why it isn’t selling – which is both price and condition. He think they need to take if off the market and either put some money into it or drop the price significantly.
My in-laws have a strange perspective on real estate that has made this process much more difficult. (And my FIL was in commercial real estate for decades.) They have long had a skewed perspective on worth/value. And, in my MIL’s case she thinks if someone can afford X to buy a place, they will have Y$ to fix it up. Her children have tried to explain her, until they were blue in the face, that it doesn’t work that way.
My FIL’s health isn’t great and they just cancelled their trip to the condo that was to happen in a few weeks. He is very cold natured, so while it doesn’t generally get freezing cold at the beach, it is silly for them to visit in the winter. I just advised one of my kids to go ahead and reserve his spring break dates with his grandparents to use the condo, because I suspect that they will still own it.
It has been suggested that my husband and his siblings buy it – but for a whole host of reasons that isn’t going to happen (first and foremost, if I am going to have a second home I want it large enough for all of us to be comfortable. IT is a two bedroom and we have three kids. My husbands siblings all have older kids who will soon enough have families etc and two bedrooms is simply not a practical size for where we are all right now.)
The cancellation of their trip there makes things interesting. Perhaps they will be more opening to dropping the price now that they can’t use it anytime soon.
Please cross your fingers and pray for a quick resolution if you believe in prayer. My late mom’s house just went on MLS last weekend and the broker’s open was today with a night open house this Thur. and regular open houses this weekend. Good comparables weren’t available because it’s a round house so very unusual but exactly the thing for the right buyer. It is being sold As Is, so I paid for a TON of inspections/inspection reports, not to mention painting, carpet cleaning, and window washing. The agent priced on the low end hoping we will have multiple offers. She said an unusual number of properties are on the market this fall. I guess I’ll know in the next few weeks if the market is still hot. I nearly went crazy emptying out the place; we went out there six times a week for fifteen weeks. . .Not a set up for an estate sale, unfortunately.
@lastminutemomtwo, the house tenants’ situation sounds very encouraging. Don’t discount the power of inertia. Since the couple liked the house well enough to rent it, they may decide the hassle and expense of moving is not worthwhile. I don’t mean to slight the house, but sometimes other factors weigh heavily in those decisions.
Maybe your in-laws will see the light now that they’ve had to cancel their trip to the condo and realize what a relief it would be to just have it sold. I’ve heard/read too many comments like your MIL’s about what buyers should be able to do to a newly purchased property, and HGTV shows just make matters worse. Some “expert” on those shows often states that if buyers have been preapproved for $300,000 but buy a house that costs $275,000 then they have $25K available for upgrades. They seem to ignore that, except for a very few special programs that roll remodeling costs into a higher priced mortgage, most lenders will only lend a percentage of the purchase price and not that plus whatever the buyer wants to spend on new matching appliances or trendier light fixtures. Those buyers often can’t even cover their own closing costs and don’t have cash on hand for redecorating or remodeling.
@CCsiteObsessed - good luck! Try to stay optimistic. Of all the houses we’ve sold (about a dozen so far), the one that concerned me most yet sold the fastest was a house unlike any other in a large (>1,500 acre development) neighborhood. We were still repainting a few rooms when our agent asked if he could show the house immediately. A couple had just learned that one set of parents needed to move in with them and they got very excited when they heard that we’d incorporated quite a few universal design features. We started packing before the paint was dry and closed about two weeks later. Things that some RE agents thought were negatives (all tile & hardwood, no carpet in bedrooms) these people loved because it made wheelchair use easier.
I am going to take a wild guess. Since this thread was started, real estate prices are higher in most of the country.
My daughter bought a place south of SF in the beginning of 2015. Prices in her neighborhood are probably up around 10 percent in a little more than a year. I still see very little inventory for sale in Marin County.