Lots of Showings, Reduced Price, Still No Offers...What Can Be Done?

Dave,

I have my house on the market since January 2, 2019. Lots of showings but the potential buyers do not stay long 5 or 10 minutes then they leave. My home needs masonry work in the basement and floors are sloping. My home is 100 years old but I sunk plenty of money into the house, new bathroom, new kitchen. I reduced the price by $15,000 and still no offers. The feedback is too small, sloping floors. I asked my listing agent if she knows any contractors as I want to unload my home asap. I want to relocate and I am not getting any offers at all. What can be done?

Linda     

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Linda,

I am going to break this down almost line by line. There is a lot of meat on this bone, so let’s get right to it!  First, patience is the one thing this time of year requires. Remember that you listed in what is traditionally considered the slowest (from a sales perspective) time of year and it is always hard to interpret showing traffic and feedback so moving with a bit of caution might be prudent. “Lots of showings” is somewhat relative and can depend on your definition of “lots”, but nationwide statistics on the number of showings before you should have an offer is somewhere between 8 & 13 depending on the market, time of year, etc!  Clearly this is not an exact number or science, but it does provide one statistical guideline to have some guardrails that will help keep you on the road! Along that line, there really is no typical length of showings.

From years of experience I would say that the average showing is somewhere around 20 minutes, but keep in mind that is an average, meaning some look quicker and some take longer! As a Realtor, everyone loves the buyer who is a quick looker, but some people need to look in and under every nook and cranny, even if they know they are not interested! Much depends on how large the home is etc. I have seen statistics and studies over the years that indicate that a buyer will internally “know” if the house is a contender within a minute or two, which shows that the final determining factor has a lot to do with having a gut feeling. All that to say that 5-10 minutes is probably a bit light. I even wonder if they are there long enough to get to the basement to see the area in need of masonry work? 

“Regardless of if they are making it to the basement or not they are bailing quickly and the reason is most likely the sloping floors. They should be aware of the size before they come to see and the fact that you have had showings tells me that the sloping floors are expediting their exit.”

Regardless of if they are making it to the basement or not they are bailing quickly and the reason is most likely the sloping floors. They should be aware of the size before they come to see and the fact that you have had showings tells me that the sloping floors are expediting their exit. These two issues are even outweighing your kitchen and bathroom updates, which I am sure makes it more disheartening.  Remember sometimes it takes patience to find the right butt for the saddle. Finding that butt can take longer when you have significant hurdles and a sloping floor would check the significant hurdle box. To overcome significant hurdles it generally takes one of three things, time, just the right buyer or price reduction(s).

Your price reduction of $15,000 is a significant move in the right direction. It’s not clear when you made the price reduction, but you need to give it at least 2-4 weeks to season and see if it brings any new buyers to the table. If this price change does not bring in serious new lookers then you will need to decide between time and money! Sounds like time is very important, so you may need to keep adjusting your price until you find the right value that makes accepting the sloping floors an attractive choice for a buyer. With every significant hurdle, there is a price that makes a buyer believe it is an acceptable risk. You will likely need to find that price if you need to sell asap. Your other option is to evaluate what needs to be done to correct the problem and get it fixed! This would significantly increase your buyer pool and appeal.

For your average buyer, the cost to correct sloping floors would loom large in the decision making process because fixing it would require cash they would likely choose to spend elsewhere and expertise that most don’t have. Fixing it would be a great option, depending on cost and timeline to correct. With every home sale there are two lines (price and time) that start off parallel and eventually meet. Adjusting your price is your quickest (notice I did necessarily say best) solution to speeding up the process! Sorry I don’t have a magic bullet, but these options should help you sort it out…best of luck!

Dave Kimbrough
The Kimbrough Team

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What happens when a home appraisal comes in low?

Dave,

We sold our home last year and during the process our appraisal went by without a hitch, actually everything went as well as we could have hoped for. However, recently it was brought up in a discussion between my wife and I—what happens if the appraisal on a home comes back less than what the buyer offered? Are the buyers able to change their offer accordingly or are they contractually obligated to continue through and purchase the home with their original offer? Like I said, the appraisal on our house was smooth as silk, but it just got us curious about what the options would have been if things had not gone so smoothly.

Thank you for taking the time to answer our question!

Sarah and John, Grand Junction

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Sarah and John,

Congratulations on your smooth transaction last year! It’s always a blessing when all aspects of a sale go smooth and without any significant speed bumps. As I am sure you are aware, speed bumps are just part of the process and a low appraisal can be one of the most significant speed bumps one can encounter on the road to closing! 

Low appraisals become more common when a market gets very active and rapidly appreciating prices are hard to substantiate with past sales. It can also be an issue, like it was here in 2011 & 2012 when the large number of foreclosures cloud the data and keep an artificial lid on potentially rising market values. Luckily on the Western Slope we have been seeing very sustainable and verifiable appreciation levels and although we occasionally see low appraisals, it is the exception not the rule. When an appraisal does come in low, there are several options, but all the options generally lead to give and take from both parties involved in the sale.

Unless the buyer waives their right to an appraisal, there is an appraisal provision in every Colorado contract to buy and sell that provides the buyer an escape clause if the home they have under contract does not appraise at the contracted price. There is no contractual obligation to purchase any property that does not appraise. In fact, Colorado real estate contracts are designed with the intent to protect the consumer. Remember, if the appraisal comes back low, you still have options.

“The first most logical option would be to get a second appraisal, if both parties agree that the first one was, for one reason or another, not as accurate as it could have been. ”

The first most logical option would be to get a second appraisal, if both parties agree that the first one was, for one reason or another, not as accurate as it could have been. If the lender will allow a second appraisal, then this is a reasonable choice and both parties can hope that the value comes in at the contracted price.

The next option is to amend the purchase price down to the appraised value. This is not a very popular option for sellers, however very popular with buyers! Funny how it works out that way. On the flip side, the next option is to keep the agreed upon purchase price and have the buyer make up the difference between the appraised price and purchase price in cash at the time of closing. Funny how this is a very popular option for the seller, however not very popular with buyers. Another option, and by far the most popular, is they meet in the middle. Say the appraisal comes in $6k low, the seller lowers the price $3k and the buyer brings an extra $3k to the closing table to bridge the gap and get the deal to the closing table. 

Ultimately a low appraisal generally comes down to how bad the buyer wants to buy and how bad the seller wants to sell and thus the reason that the “meet in the middle” option is the most popular! There are far too many scenarios to go over here, as a low appraisal can have other, more far reaching impacts.  More often than not it just takes everyone coming to the conclusion that a win/win is better than a loss!  Count your blessings and I hope this gives some simple insight into a complicated and very unwanted situation!  

Dave Kimbrough
The Kimbrough Team

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Fix Your Home's Quirky Layout Before Selling?

Hello Dave,

We removed 2 walls in our bungalow as it was quite dark. Now we are selling and the layout seems to be putting buyers off, my agent tells me to leave things as they are as someone will love it, but I need to sell fast and not sure if I should replace the stud walls. The bedroom doors also open into the living area which is a privacy issue. 

Thanks so much,

Susie

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Susie,

Shoot…it’s hard when you make changes to your home that you are confident will make it better only to find out that you actually might have made things worse. If your feedback has been consistent that the change you made is now a hindrance to the house selling, then you might consider putting the walls back up. Before you make any hasty decisions, make sure that the layout feature that is putting buyers off is indeed the wall removal and not the fact that the bedroom doors open to the living area! I have seen it time and time again, if the master bedroom is visible from the living area when the bedroom door is open it is a major buyer turn off. A “funky” floor plan is worse than a floor plan that shows dark, but identifying exactly what is causing the hesitation is crucial. The last thing you want to do is fix the wrong problem! Regardless of the floor plan quirk that is holding the house back, often times it is hard for a buyer to see how to fix the problem. Actually, even if the buyer can identify it, they do not have the expertise or know anyone who can make the changes for them to make the home more livable. Obviously, as your agent suggested, you always have the option to just wait it out, rather than fixing the problem.

“I understand your agent’s perspective and advice as I always say, “there’s a butt for every saddle” and if you wait long enough, you will eventually find the right butt and that butt will love it! ”

I understand your agent’s perspective and advice as I always say, “there’s a butt for every saddle” and if you wait long enough, you will eventually find the right butt and that butt will love it! Sometimes waiting is not the best option, especially if you can easily correct the issue and make the property more sellable and “now ready.” This time of year waiting takes on a whole new meaning, especially for those who wish to sell quickly, since we are headed into the winter months. As we creep closer to the holidays, patience can start to take on a whole new meaning and playing the “waiting game” can be a bit of Russian roulette. A house that shows dark is not a good thing, especially in a bungalow where space is at a premium. In smaller spaces it is always a best practice to try and have it show as bright as possible! One, cost effective, way to add more natural light to dark spaces is by adding solar tubes. A solar tube can bring lots of natural light to any dark area at a very affordable price. If you decide to put the walls back, then adding solar tubes may be an effective answer to your “dark” problem. 

Regardless of what the problem is, you are doing the right thing by listening to your feedback and proactively trying to correct the problem. Identify the real problem. Get it fixed. Add a solar tube. Watch it sell! Best of luck! 

Dave Kimbrough
The Kimbrough Team

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Will my neighbor's "stuff" impact my land's property value?

Dave,

I own a 20-40 acre lot, zoned agricultural, in Mesa County. There are parcels surrounding my land which have RV's, outbuildings, and various stuff that is somewhat hard to look at. Would those variables affect the value of my land?

Thank you for your professional reply,

Ronald, Area Withheld

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Ron,

Welcome to Western Colorado! One of the charming things about our area is the eclectic collection of properties that neighbor each other in the more rural areas of our valley, but one of the not so charming things about our area is the eclectic collection of properties that neighbor each other when one or more of those properties more closely resembles a junk yard or antique farm implement graveyard than an agricultural property with a residence. All kidding aside, there is a relatively high level of likelihood that it will negatively impact your property value. 

Part of what makes (and has made) Grand Junction and Western Colorado charming is the mix of not only property types and styles but also the potential mix of the socioeconomic status of our neighbors. In my opinion that mix is wonderful and unique, because the lack of socioeconomic segregation that is created by neighborhoods forces us to become neighbors and many times friends with people who may or may not be the same or live a similar financial lifestyle. As Grand Junction continues to grow, this hodgepodge aspect is becoming much less acceptable and frankly not very desirable by many. Before we get into the potential negative impact these properties may have on your home, let’s exhaust positive options to mitigate their potential impact. 

There may be things you can do to minimize the eyesore aspects of your neighbor’s properties! Maybe you can plant a row of trees or large hedge. You might be able to put up a new fence or put up your own outbuilding that will help shield some of your neighbors “stuff’. Before assuming, or letting me assume for you, that your property will be negatively impacted, work on positive solutions that may partially or completely mitigate the visible issues and even potentially increase your property's value. You might also approach your neighbors and discuss with them cleaning up their “stuff” so you no longer have to look at it. My guess is they may not even realize that it does not sit well with you and if they knew, they very well may be willing to clean it up. If that fails and you find that you have few options to mitigate their “stuff” then it is likely you will see some value erosion.

Let’s face it, for most, owning a farm or “real” agricultural property is not high on the desirability scale, however more executive and well-kept estate type settings with large homes are quite desirable and this is where the mix is met with less than open arms by many. If you have properties surrounding you that have collected RV’s, broken down cars, dilapidated outbuildings, dilapidated fences, long forgotten farm implements, etc., there is little doubt that it will negatively impact your properties value, unless you find just the right “butt for your saddle.”

“If you find a buyer for your property that intends to collect RV’s, broken down cars, dilapidated outbuildings, worn out fences and long forgotten property implement tools then they are likely not to give it another thought and in this instance you will likely not have a significant, if any, negative impact on your property value.”

If you find a buyer for your property that intends to collect RV’s, broken down cars, dilapidated outbuildings, worn out fences and long forgotten property implement tools then they are likely not to give it another thought and in this instance you will likely not have a significant, if any, negative impact on your property value. It may take longer to find that “right” person, but ultimately there lies the theory that would provide you an alternative to the negative property value impact of less than slightly neighbors.

Again, look for proactive and positive options to minimize the impact, but my guess is that if you can’t find ways to mitigate, there will be some negative impact on your properties value! I am hopeful you can find a way to work this out to your favor. Thanks for the question and best of luck.

Dave Kimbrough
The Kimbrough Team

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