The four stages of Home Seller Sickness

The customer is always right, but this is getting ridiculous. I’m talking about Tampa Bay area home sellers who refuse to drop prices on their homes. An exasperated Ann Guiberson, head of the Pinellas Realtor Organization, says asking prices are up over last year by a few thousand dollars.

How can that be? We’re stuck in a Florida-wide housing retraction with talk of 25 percent price declines in the air. Call it Home Seller Sickness. I had the affliction earlier this year when I sold my house after wrestling with the dead-weight market for more than half a year. The disease has four stages, ranging from prickly denial to glum acceptance:

Stage 1/My House Is Better Than Your House: You list your house for $300,000. Your neighbor lists the same model for $275,000. Of course, you can justify the premium you’re charging. Your kitchen has new floor tile, handmade by Venetian artisans. Your neighbor has brown linoleum, circa 1979. You start pricing the Toyota Highlander you’ll buy with the profits. House hunters respond by treating your home as if it’s the Bates Motel.

Stage 2/Maybe I Was a Little Rash: You’re forced to drop the asking price to $275,000. Sure, you’re still not undercutting your neighbor, but that guy’s a slob. Did you see the orange paint in his living room? Hasn’t redecorated since Fonzi was on TV. Plus, you’ve installed the best aromatherapy system on the block. One whiff of “ocean breeze” and “fresh laundry” and buyers will be racing for the contracts.

Stage 3/You’re Going to Make Me Work for This, Aren’t You?: Six months pass. Neither you nor your neighbor has sold. You drop the price to $249,999. Your realtor insists on the $999 trick: Make the house look desirable. Cancel the Toyota SUV purchase. Settle for an electric scooter.

Stage 4/Will Somebody Please Kill Me Now?: You drop your home price to $234,900. It’s the cheapest house on the block. The buyers finally make an appearance but demand you knock off another $15,000. You accept an offer just to be done with it. They nitpick you to death, insist you fix every jiggly doorknob or else void the contract. The buyer’s smile at closing contrasts with your frown. You blame your realtor. It’s all her fault. But the scooter ride home is invigorating.

--James Thorner

Comments

[Sandra]

To some extent, I agree with you. My parents live in S. Tampa and the prices of houses down there are still crazy (my husband says the entire peninsula has a drug problem). But, with that said, houses in parts of Carrollwood are just sitting on the market...despite the fact that the asking prices seems very reasonable for what you would be buying (4/3 pool home for $229K).

Always offer your home for sale "as is", with the buyer having the right to inspect home and walk away from deal in a few days if home isn't satisfactory. Do give potential buyer a seller's property disclosure. If inspection shows problems, seller can always offer to renegotiate and do any repairs.

Don't get caught with a contract putting seller in awkward position of being obligated to do repairs. A wiseguy buyer can hijack seller and pick him to death with repair expenses approaching closing.

As-is, shmas-is. 9:07 - Not the best advice.

Unless your home is a total wreck, never offer your home as is, particularly in a downward market where time is money. As-is contracts afford the buyers time to shop around for a better deal while tieing up your house. Should something more favorable come up, they can cancel, collect their deposit and offer Mr/Mrs. Selller a tissue for toying with their emotions, forcing them to make arrangements and removing their house off the market with a contract - effectively blocking other potential buyers. It's a lay-away weasle contract that heavily favors buyers. Note, as-is contracts typical have some sort of language allowing the buyer the ability to cancel at their SOLE discretion. Don't like the color of your door - cancel! The standard contract gives buyers up to two weeks to cancel - a lot of time.

Rather, negotiate a dollar amount in repairs, like $500, that keeps the buyers bound to the sale, and anything beyond that is up for re-negotiation.

These days, it's better to part with $500 dollars for repairs, then to part with capable buyers.

Repairs, by the way, are only things that affect the working condition of the home, and are spelled out on the contract. Cosmetic issues, age-related issues like older windows, disclosed & obvious faults - are all exempt from nickeling and diming.

8:05...An "as is" contract should be written with a deadline to complete inspection, and buyer either accept or reject house--two weeks from acceptance date is ample. Two weeks is only period seller's house would be "off market" then. No different than purchase being conditional on mortgage approval by a deadline date.

Repair caps in "standard" contracts are typically percentages of selling price, which means seller can be on hook for several thousand dollars. Firm dollar caps such as $500 or $1000 make more sense, but seller can kiss that $500 or $1000 goodbye because any buyer can find something needing that amount for repairs.

"Working condition" is a can of worms. What is the difference between "working condition" and "good working condition"? I'd rather avoid getting into that debate. I'd rather tell a buyer he can do a thorough inspection by 2 week deadline, and take the house or walk away then. If the buyer accepts the house at that point, I expect him to close subject to terms and conditions of contract with deposit subject to forfeit.

[James]

I wish people would lower their prices after time. This is all I see:

Stage 1: price home at high comp price of the past three years.

Stage 2: wait until market recovers.

I think that the St Pete Times should do a story on homes that have been on the market the longest. Sure, you will annoy the clueless Realtor "marketing" the home, but come on - there are places that have been on the market for 3+ years with no price discount!

[Booba Kastorsky]

The longer the sellers keep their rediculously inflated prices the long the pain on the market will last.
One of the basic marketing rule says if you are selling something you must clearly know your potential buyer.
Trying to cell an average house in the neighborhood with $30,000 median household income for $300,000-400,000 is crazy and stupid!
Especially now, when all of those "smart" CEOs with MBAa from Harward and PhD in economy "suddenly" figured out that giving half a million zero down jumbo mortgages to strawberry pickers that cannot read even on their native Spanish is risky and they finally stopped that stupid practice!
I must agree with the opinion that "the entire peninsula has a drug problem" :)
I just want to add most of the country had "drug porblems" and was partying too hard for too long.
The sobering will be long and painful....

[Tom]

The best way to REALLY sell the house is to sell. What are the barriers for YOUR MARKET to buy? Its usually price price and price. If you list your house at the lowest price of its recently sold comparables, you should get some offers. If you don't sell, a broker will buy it, UNLESS the price is too high for the market. Put yourself in the buyers shoes. You know this is s declining market. You are worried how much YOU will lose even at the "low" price. These prices WILL DROP more. Do YOU want to be "upside down on a mortgage"?

[Bobo]

I agree that prices need to drop, but let's be honest...there are some neighborhoods that are not "entry level" neighborhoods. Buyers simply can't expect a home on Bayshore Blvd. to sell for $250K. Why does it seem that buyers have to have everything...now? I bought my first house for $67K, sold it, bought another (higher priced, better neighborhood) and I have kept moving up from there. I agree with Sandra, why are some houses (great price, great house) just sitting on the market?

A problem for sellers in Sandra's neighborhood of Carrollwood is that the houses there are now 25 years old. It's a buyers' market, and folks can get brand new inventory homes from desperate builders for the same price.

[Sandra]

I would rather have my neighborhood than a new development. It may be older, but I have double the lot size and wonderful trees all around. I also have lake access, three parks, tennis courts, etc. Most of the developments are much farther away from town, also.

[Keith]

Hahaha! Lower your house prices, that's all there is to it. All the comments above that talk about how to have a $500 limit to the buyer for repairs...Hahahaha! I will nitpick you to death or I WILL NOT BUY and you will be screwed. It's high time you all get off your high horse and get real. You are all going down and rightfully so!

[Kathryn]

Houses are sitting on the market because of the subprime Mortgage mess, huge inventory, property Insurance mess, and Property tax disgrace!! There are houses priced correctly and buyers unable to get approved for a mortgage. Realtors do not understand this market, failing miserably, and buyers want something for nothing!! Florida has gone down hill and has been heading there for a long time. We need new state representation and builders to stop building and ruining what little is left of any land within this destroyed by human stupidity state!!

[david]

"There are houses priced correctly"

The houses are not priced correctly. We still have 2 to 3 years of depreciation to go.

[Kathryn]

Yes, there are houses priced correctly!! Our taxes and house prices are pennies compared to living up North, so where are the buyers from up North??? The answer is, they cannot get reasonable property Insurance!!!!!

[david]

"Realtors do not understand this market, failing miserably"

Bingo! You hit the nail on the head. I don't think most truly understand how fragile our financial system is right now. Severe corruption and stupidity has brought us to the situation we are in now, and the truly horrid part is, we still don't fully understand how bad it is.

"buyers want something for nothing"

But buyers will get it for almost nothing by the time this is over. Well pennies to the dollar anyways. Excess inventory, tighter lending standard, recession, market sentiment, and etc real estate hasn't got a chance.

[david]

"Yes, there are houses priced correctly!! "

Are those houses priced at 2002 levels? If not, no they are not priced correctly!

Keep dreaming.

[Kathryn]

Again, yes there are houses priced correctly or there would be no showings... Daily showings... Property Insurance and taxes if you reside in FL are the problem and qualifying for a mortgage... This state has been run poorly for years and yes, banks appraised homes to help buyers qualify during the housing boom and that's another reason we are in this mess!!! Realtors have no clue, and now when they should be marketing hard for their clients they say that they cannot afford to. Maybe, just maybe during the good times when they didn't even have to work for their commission they should have prepared for the hard times and put money aside to market hard now!! Again they have no clue what to do and that's just unacceptable.

[Matt]

Part of the problem is also the banks who drag there feet, I am one who is looking to move to the Tampa area. On 2/10 a saw a short sale house in NPR that dropped to 170,000, I had my agent put in a offer of 140,( cash sale )since it was empty. There agent called 2/11 and stated the bank would look at it as to low, I changed the offer to 160, they raised the asking price to 180. A week later they called and asked if we could close in 10 days, our agent told them to put down 15 days in case the inspection could not be scheduled in 10 but we would shoot for the 10 days.Still no answer.

[Kathryn]

This is a mess for both buyers and sellers. I agree the banks are also the cause and I will never feel sorry for them...

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