Expert: Dick Dennis - 8/22/2006

Question
My husband and I are selling a home in Austin, TX where the market happens to be hot right now.  Our home has been on the market for about four months while every house in the neighborhood has already sold.  One house about 8 lots down sold in a day and a half.  The house is empty and has had major renovations including new floors, counters, appliances, ceiling fans, decking. The home is multi-leveled and unique. We have lowered the price once and if we lower it again we won't even break even on the $60K plus that has gone into it in the last 9 months.  Our asking price is now well below price per SF in the area. Our realtor has presented us with a company that will move a "House Manager" into the home at no cost to us.  This house manager will be responsible for the upkeep, will keep the house in show status, will pay utilities, and maintain the lawn and pool.  This would save us over $1000 a month but we are reluctant since everything in the home is brand new.  The realtor seems to think this is our only option other than lowering the price again.  Do we sacrifice the newness of the remodeling to possibly sell the house?  Help!!

Answer
Unfortunately, Sara, you have a misconception that whatever you put into a house you are entitled to get out of it. Not so. What you spent to fix up the house is what most people will have spent if they live in the house 10-20-30 years.

In the future, remember this: Never buy a house that is the nicest and/or most expensive house in the neighborhood. And never improve your house to be the most expensive in the neighborhood. It seems that is what you have done, unless you bought an absolute run-down dump.

Houses in subdivisions usually sell within striking distance of one another. If you buy a house that is unique and a custom house where you know no one has anything similar, then you can ask whatever you feel might go.

One more thing you should know: There is only one reason why a house will not sell, and only one: The price is too high. Your price is too high because you put too much into it. If you are in a market in which everybody's house is selling except yours, that market is telling you something. You are asking too much!

There is one consolation for you. The IRS will allow you to add the improvements (but they must be improvements and not maintenance) to your basis on which you calculate any profit you make on the property.

I do wish you well.

Dick Dennis         dixiedee13@aol.com