Expert: Dick Dennis - 5/27/2007

Question
QUESTION: My husband and I put our house for sale one year ago June.  We made two very big mistakes:  1. Overpricing  2. Listing with a 3% realtor.

We are now listed with Prudential, have lowered the price substantially, and are going to incur a loss if we lower it much more.

The house is in mint condition.  My husband works in construction, and did beautiful, quality interior work.

The MLS # is 4912599.  We are in NJ.  Can you please give me your opinion on why our house isn't selling?  Do you know of some type of relief that we can get?  Pa has some kind of "Act 91" but we're in NJ?

What more can we do???

ANSWER: You are not the only one who has had to accept a loss, Sharon, if that is what you wind up doing. We are in a very bad market for sellers. So, the question is: DO YOU REALLY NEED TO SELL? Keep this in mind: if your present Realtor does not have a stable of buyers waiting for a house (and I guarantee he/she doesn't) then you must rely on other Realtors to like the house well enough to show it to THEIR buyers. Just one thing. Those Realtors ALSO have sellers who are having trouble moving their houses. What needs to be done, nobody is willing to do. And that is EVERYBODY should take their properties OFF the market. Sounds crazy I know, but that is the only way to balance the supply and demand. Banks are stuck with a big backlog of foreclosures they are trying to move. They are willing to take a loss on most of them. What buyers there are around are hovering around like vultures to pick off a steal, a bargain here and there. Why should they buy your house when they can get a house for peanuts from a bank?

Since there are so few buyers, there should only be just a few sellers. When you force the buyers to buy to the point that they must bid on the houses they want, then you have turned the market around. But, like I said before, it's just not going to happen. Everybody will say, "Well, let the other guy take HIS house off the market. I really gotta sell mine."

Plus, the Realtors out there are still out there looking for listings to sell, believe it or not. It is their life blood. So all the houses sit.

I recommend reducing the house supply by one. I wish you well.

Dick Dennis

---------- FOLLOW-UP ----------

QUESTION: Dick,

Thanks for your quick reply. We are in another house now, that actually needs some work.  Should we move back into the 'nice' house that we have for sale, and try to rent the house we're in?  Or, should we try to rent out the 'nice' house we have for sale, hoping that renters won't destroy it??

Do you see the market changing anytime soon???  We looked it up and the Wall Street Journal and others are saying the market is changing.  Is it really, or is this baloney?

My dad said the Federal Reserve has to lower the interest rates.  Why isn't everybody inundating their office with demands of lowering it?  I'll start an email campaign if you think that might work; maybe you can also  (remember reading the quote about a few dedicated people changing things???)
ANSWER: I hope I am wrong, but I don't see the market changing for two years or until the banks have sold off their inventories. That's what basically happened in the early 1990s. If the so-called experts are not IN THE MARKET, then I would take what they have to say about it with a grain of salt, WSJ or any other. As for which house you should live in, I would suggest living in the one that best helps you financially. Rent the other one out. But you have a Realtor of whom you should be asking these questions. Don't you think?

Dick Dennis

---------- FOLLOW-UP ----------

QUESTION: Yes, we do have a realtor, but two heads are better than one - and they have been unable to sell our house, so I'm looking for all the advice I can get.
ANSWER: Not necessarily, Sharon. I do appreciate your asking me some very vital questions, but you should allow your Realtor the opportunity to do his/her job . . . his/her way. You signed up with him/her because you were satisfied of the work and expertise that he/she offered. You just have to be patient, Sharon. But you must allow just one head to do the job in this case. If he/she needs help, his/her broker/manager should be able to offer it. I do wish you well.

Dick

---------- FOLLOW-UP ----------

QUESTION: Dick,

Unfortunately, sometimes people are in lock-step together, and for one or more reasons, they don't step out and think away from the crowd.  In my case, I asked another realtor that was recommended to me by my attorney, to review why the house wasn't selling.  He asked me the address of the property, pulled it up on the MLS, and said "there's your problem, your pictures are terrible".  I told the realtor, and she refused to listen, but only blew it off and said "it 's just one realtor picking on another".  I thought she would know, so I accepted her explanation.  THEN, my husband decided to look it up last week.  Lo and behold, HE said "The pictures are TERRIBLE".  So I called the realtor and told her that I had told her MONTHS AGO that another realtor had stated that the pictures were bad, and that my husband pulled them up, we looked at them, and they ARE bad!  I asked her who she hired to take the pictures, and it was a person who worked at their office!!!  I was angry as heck!  She quickly said that "they own their own business" - but I don't think they were objective; it was 'one of their own'.  See what I mean???
ANSWER: With all due respect to you and your husband, the words in the listing information work to sell the property faster than any pictures. Listings WITHOUT pictures sell fast when the words describe the property and the validity of the price. I'm not siding with the Realtor, Sharon, but it strikes me that you are very impatient. You admitted you screwed up in the first place when you first listed the property a year ago. Once that happens, ALL THE REALTORS do not bother to look at your listing any more because they know the property is overpriced. Then when you start to lower the price, still less and less Realtors and their clients bother to look at your property because NOW they think there is something wrong with it. Besides, there are lots more listings on the market with more appealing prices. That's why it is so necessary to start off with a good and reasonable price. By the way, not to demean the work your husband did with the property, I hope you did not include the cost of the work your husband did in the "loss" you will suffer if you lower the price some more. Buyers expect certain things in a house. And if you offer something that perhaps in which most buyers are not interested it still is not going to sell the house if they just don't like it. You like it and you did a nice job. But you don't know what the buyers like when you did the work. With all due respect to that attorney, that doesn't make him an expert in photography. Far from it. Many of them don't even know much about real estate. 38 years told me that. I wish you well.

Dick Dennis

---------- FOLLOW-UP ----------

QUESTION: Dick,

We DID screw up, and are paying for it.
Since you've been in real estate for 38 years, what do you think is the best route for my husband and I to go now?

I talked to our realtor, and we raised the 3%, and offered a $1500 bonus to any agent who brings in a buyer.

Since you have a lot of experience, what should we do now that we screwed up?  How do we get out from under a bad initial mistake?

Answer
Have your Realtor take you around to other listings, the more recent the better, that are in your category. When you have decided what is the average price for those homes that are similar to yours, make sure your new listing price is BELOW ($5,000 or more) their prices. THEN offer a $5,000 BONUS to the agent who brings the successful buyer, but only if the purchase price is the new listing price. Make sure your agent tells other agents about it. Maybe have the agent have an AGENTS' OPEN HOUSE. She would know how to handle that.

You asked.

Dick Dennis