Un-Real Estate

A few months ago I received a listing referral from another REW member, Ken Smith.  He sells in the northwest Chicago suburbs and I sell in the southwest area.  Sometimes our websites attract each other’s area so we trade prospects whenever we can.

The sellers sounded very nice over the phone and I was excited to actually work what at first sounded like a good referral.  These sellers were selling a home in Palos Heights, which is a very sought after southwest suburb of Chicago.  They were still listed with another brokerage.

My excitement waned as I was preparing the Comparative Market Analysis (CMA).  The house had already been on the market for over 200 days.  The original asking price was $349,900 and after several price reductions they were down to $309,900.  The automated CMA program I use came up with a market price of $289,000.

When I drove up it looked like an average brick ranch.  The only positive was that it was on a larger than average lot.  The yard was great.  And that’s all that was.

As soon as I entered the living room I saw a small house with dirty walls and worn and stained carpet.  All of the furniture was beat up and lackluster – the agents on HGTV would have a field day with this house.

The best room was probably the bathroom which was at least remodeled at some point in time.  But they had rigged up a shower curtain on the tiled wall of the bathtub.  They said they wanted to keep the wood frame of the window from getting wet.  It looked terrible.

As I viewed the small master bedroom I couldn’t believe the two queen-sized beds that were shoved together side by side.  They explained that their children ended up in bed with them every night so they decided to add another bed.  They also told me it was a cultural thing. 

The kitchen was well worn and matched the rest of the house.  I knew they weren’t going to like what I had to tell them.

I had to explain and show them why I thought their home was grossly overpriced from day one when it went on the market near $350,000.  I told them at $309,900 it was still too high.  I told them that the best asking price should be around $275,000.  And I truthfully felt that was too high because of the home’s condition.  I had the comps to back everything up.

They were building a new home and I know they paid a pretty penny for it.  So they had to sell in order to be able to close on the new place.  They said they might walk away from the new construction if they couldn’t sell and said they would lose their earnest money, which was a pretty high amount that no one would want to lose.

In my opinion, they got in over their heads.  They thought their house was worth way more than it was and banked on getting a certain amount of money from their current home to put towards the new one.  I even asked them who came up with the original asking price, them or their agent.  They skirted my question.

I told them I could not take their listing at such a high price and would only work with them if they took a large reduction.  They said they understood and they loved my presentation and marketing program but they stayed with their current agent.

They are now at $299,900 and their house has been on the market for over 300 days!  They also have it listed as a rental (at a price I also think is too high for what they have to offer). 

We complain that the news paints too dismal a picture of the real estate market but these sellers obviously haven’t read any of the doom and gloom stories.  They don’t know that there is such a glut of inventory in today’s market and it keeps getting worse.  And no one else told them that the homes that were also in their price range offered so much more.  Or maybe they just have blinders on. 

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