Some more experiences in home buying
September 17th, 2007 by KenricI always wonder whether the owners of these homes know what a great job their realtors are doing. I wonder how many other homes are left on the market so long just because people can’t even get into them.
Home #1 was a vacant home and was priced decently at $440k. It’s about 3 blocks away from my home. The funny thing about this home is that it has no for sale sign in front. It’s listed as vacant with lock box. There was no lock box on the home! I called the realtor and left a message that we were in front of the home and wanted to see it. It’s been 24 hours and I haven’t received a call back. How do they expect to sell this home?
Home #2 was also a vacant home and the lowest priced at $420k in my area. It was a block away and I felt that this was my most direct competition, I feel that I’d have to undercut this home when I list. In fact, I couldn’t figure out why it hasn’t sold yet. It’s been on the market for 150 days and priced very well.
We pull up to this supposed vacant never lived in home its garage door is open. Inside the garage is filled with stuff to where you can’t park a car in it. There’s a Cox Communications truck there, a Sheriff’s car and another maintenance vehicle. We see two teenage girls park and walk into the house. It sure looks like someone is living there! We double check and the house is still listed as active. We call the realtor and leave a message. It’s also been 24 hours and we haven’t received a call back. I’m guessing that this home got rented out recently.
This is good news, because the 2 listings that I felt were in direct competition to me are no competition. One is occupied and nobody can even view the other one. This makes me feel alot better about listing my home. I can even price it a little higher now and still be the lowest in the subdivision.
Out of the 8 homes we looked at, there was one home that I felt was better than mine. Fortunately, this home was priced at $450k. If this particular home dropped their price a little, I feel it would be the best home in the 3000sf size range.
The cheapest home was $397k, it was a foreclosure that needed all appliances and new carpeting everywhere. You can always tell when you walk into a foreclosure because anything that can be taken is taken. They have no stove, diswasher, microhoods, window treatments, chandeliers, sconces, etc…
Another aspect about showing homes is the temperature of the home. It’s still 100 degrees outside here. When we walked into homes without the AC on, we moved through them quickly because they were so hot on the inside. Who wants to spend time in a home that’s hotter than outside? In the homes where the AC was set at a good temperature, we stayed longer. Think about that AC bill, it’s the difference between a $50 bill and a $250 bill. It’s $200/mo… but you’re selling a $400k house!
Posted in Real Estate | 7 Comments »
Stumble it!
Hey, how’s the Tucson house coming along?
By Shaun on Sep 17, 2007
We are currently trying to sell that home. I haven’t posted anything about it because we have been in negotiations with several people.
By Kenric on Sep 17, 2007
This must be the Pulte in Westwing that you first advertised for rent at the end of July. I looked at the MLS and found most of the listings you described except the $397k foreclosure.
It’s helpful to look at what’s for sale, but that’s not really indicative of the current market value. One of the listings you found is a foreclosure but is not clearly identified as such. One of the houses I found has been listed for just under 30 days, the rest have been listed for much longer times. Have your agent click the historical archive link in the listings to see how a couple of the sellers have followed the market down.
When you look at AWC and pending listings, you get a much better picture of what is (not) happening. In the entire 85383 zip code, there are only two houses in that square footage and price range (under $500k) with three car garages that are AWC or pending. One was listed at $335k and one was listed at $369.9k. Only one went into escrow in the last 4 weeks (post mortgage meltdown). Both houses are inferior to yours, but that is unimportant. What’s important is that there are few if any active buyers for your product in your price range.
The listing agents are not bothering to call you back because foreclosure listers rarely call you back and the other agents have long since given up on selling these houses at these prices. If they call you back and you tell them you are pricing yours for sale, ask them how many showings they have had in the last 30 days. No showings confirms there are no buyers.
Your asking rent of $1,685 is in line with other asking rents in the area that are on the MLS. However, some of them have been on the market for well over 60 days. If this were my property, I would call on all the “for rent” signs in the area or at least check the web sites of the property management companies that have signs on competing properties.
If I wanted to keep this house through the downturn, I would drop my rent 10 percent below the competition and market the heck out of it. Otherwise, I would consider listing the house for sale 5 percent below the competing listings and offer some closing cost assistance to get it sold.
Best of luck to you with this one.
By Another Investor on Sep 17, 2007
Another Investor, I didn’t see the $335k one. Did you see the 3200sf one that was listed at $399k? It should be the only AWC in Westwing in that range. Is this the $369k one you are talking about?
By Kenric on Sep 17, 2007
Kenric:
Start by looking at AWC and pending by the zipcode. Since yours is between 3,000 and 3,100 SF, I looked at 2,900 to 3,200 SF with 3 car garages. There were two pendings, no AWC. If the $399k listing is over 3,200 sf, I missed it.
I’m not very familiar with the Westwing area. It looks like the three main builders of competing product are Pulte, Engle and Beazer. Try searching within your zip code by your builder and also by Westwing to find all the active and pending competition.
If there is an AWC in Westwing listed at $399k, that’s the house I would look at most closely in setting my price. If it is AWC, your agent should be able to get you in.
I empathize because I have a starter home in Goodyear listed now. This is a completely different market, but the problem is the same. It’s been on the market for 30 days and it’s listed almost 5 percent lower than the next lowest house of this model. There are few buyers out looking, even at the lower price.
Until the mortgage market stabilizes and first-time buyers can get back in, the market is frozen. To make matters worse, the jumbo mortgage situation is hurting the sellers from California and other high-priced markets that might want to buy your house. No one can buy their houses, so they can’t buy yours.
It’s a tough time to sell, but in my opinion things will get worse before they get better. We sellers are all in the same place. Do we cut prices and offer incentives to sell, even if it means taking a loss? Or, do we rent and be prepared to wait 5 years?
By Another Investor on Sep 17, 2007
How’s the rent-to-own market in your area? Have you explored that alternative?
By Andres on Sep 17, 2007
Andres, I had it advertised as Rent to Own or Lease Option also. I had alot of interest in L/O but no takers.
By Kenric on Sep 18, 2007