And the Saga Continues

It looks great now; just patch the holes once you take it down.

It has been about two weeks since I last posted. I apologize for my absence; the house hunting saga continues, though. We did put an offer on a house, but the negotiations fell apart. The sellers were holding firm to 99% of their asking price. As a seller, I certainly understand that you want to make the most money possible on your most expensive investment, but you also have to understand a bit of psychology. Everyone is well aware that it is a buyers' market right now, and buyers are on the lookout for really good deals. As a seller, you absolutely have a right to make as much profit as possible, but you also have to build some cushion into your asking price.

This can be a bit tricky, because you don't want to price your house $20,000 above all the comps in your neighborhood figuring that you will settle for x-$20,000. A buyer will most likely not even look at your house--it could be out of their price range. What you have to do as a seller is to walk a fine line between building in 3-4% cushion without alienating potential buyers. For example, had the sellers of the house we had wanted priced their house maybe $4000 more than they did, they would have had more room to "come down" to our price, and we would have perceived them as willing to compromise. As it was, we perceived them as folks who really were not serious about selling.

We are continuing to look at houses. We saw two on Saturday--one that was more-or-less well staged and one that was horrible. The horrible house just had an air of neglect about it. The carpets were stained; there were leaves all over the carpet in the living room. Yes. Real leaves. From outside. There were large holes drilled through the bedroom wall and into the closet to accommodate a flat-screen TV. There were patches on the wall that had been spackled over but not painted--the whole thing was just bad. The other, nicely staged house, still had a couple of issues. Two of the rooms were painted in stripes and polka dots for their children, in eye jarring color combinations of green & purple and peach & red. Our first thought was, "How many coats of paint will it take to cover that?"

So, sellers, keep your eyes on the prize: build in enough of a cushion into your asking price so you are seen as someone willing to make reasonable compromises. It could make the difference between selling and not selling. We are living proof of that. Our Realtor will be keeping an eye on that house, just for curiosity's sake. It will be interesting to see when they sell, and for how much.

And The Winner Is.....??

Good job with the carpet. Now just lose the guns, please.

Well, we are making an offer on a house! It will be official on Monday, but we're "All Systems Go," so there you have it. Let me talk to you a minute about how we arrived at our offer price. First, I looked at the 5 neighborhood comps and what they sold for versus what the asking price was. In Realtor-speak, this is the SP/LP% (sale price/list price %). I took the average of the 5 and got one price based on that number. Then, I looked at the sale price per square feet (sp/sf) and took an average of the five. I based another price on that number. Then, I averaged the two together, and arrived at our magic number.

Now, we would like the seller to pay closing, so I added x thousand dollars to our magic number to cover closing. And there you have it. I shot this adjusted magical number to our Realtor and our loan person (of course). Our Realtor recommended offering a bit lower than the magic number so that we could negotiate up to it, if need be. Our loan person said that it was right in line with the other homes that had recently sold. Of course it was; I have a calculator!

Okay, so there you have it. We will hear in a few days whether the sellers will accept or counter our offer. So, I will let you know what happens. Until then, I want to talk to you as a recent seller/current buyer: make sure you have priced your house so that it is in line with your neighborhood. If your price is either much higher or much lower than an average range for the area, buyers will say "I don't think so!" in the former case and "What's wrong with that house? Are they desperate?" in the latter case. Work with your Realtor on coming up with a number that you are, if not over the moon about, at least satisfied with. Know that you will most likely have to come down in price, at least a bit, so build that cushion in to your asking price.

I'll leave you with a couple of more observations about some houses that we recently saw: personalized door knocker (Our thought: Oh, great, they'll take that with them, and we'll have stupid screw holes in our door). Broken, cheap, builder-issue doorbell (Seriously? Spend $15 and get an upgraded ringer at the home improvement store). Dirty--really dirty--white carpet (Again--seriously?)